A Conversation with Henry Paulson

PETER ACKERMAN:  Good afternoon.  My name is Peter Ackerman.  I'm a member of the Council's board, and I want to welcome you today to this meeting, which I think is going to be quite exciting to participate in.

Please turn off all your electronic equipment that can go beep.  And I'd like to remind everyone here that -- (laughs) -- I'd like to remind everybody here that this meeting will be on the record.

I'm going to introduce the secretary.  And then, because his time is a little constrained, I'm going to forgo my rights as presider and he's going to actually select people for Q&A from the group.

Henry M. Paulson Jr., on June 19th, 2006 was nominated by President Bush to be the 74th secretary of the Treasury.  A mere nine days later, he was unanimously ratified by the Senate and then sworn into office on July 10th, 2006 by Supreme Court Chief Justice John Roberts.

As Treasury secretary, as you know, Secretary Paulson is the president's leading policy advisor on a broad range of domestic and international economic issues.  Secretary Paulson also had an extraordinary career at Goldman Sachs, which he joined in 1974 and became a partner in 1982, then head of investment banking in 1990, then president and chief operating officer four years after that.  And then when the public offering occurred, he became the chairman and CEO.

He also had a stint in government, so prior to Goldman Sachs he was on the White House domestic staff serving as the staff assistant to the president from 1972 to '73, and just before that as a staff assistant to the assistant secretary of Defense from 1970 to '72.

The secretary is a graduate from Dartmouth and Harvard Business School.  And what impresses me the most, besides being a Phi Beta Kappa, he was all-East, honorable mention all-American football player.

So with no more introduction, I'd like to welcome the secretary.  (Applause.)

SECRETARY HENRY PAULSON:  Thank you very much, Peter.  And it's very good to be with the Council here in Washington today.  I appreciate the opportunity to talk with you about the economic power and the promise of India.

Earlier this year, Prime Minister Singh referred to India's history as an open house -- an open society, open to the free flow of ideas and scholarship.  I will travel to India next week.  I look forward to being a guest in India's house.

My objective is to pay tribute to the strong, growing partnership between India and the United States.  I hope to help the Indian government advance their economic reform agenda, which will benefit India's citizens and the world.

India is a vibrant nation whose strength lies in its commitment to equal rights and to speech, religious and economic freedoms that enrich the lives of all citizens.  India is not only the world's largest democracy; it is also a secular, pluralistic society committed to inclusive growth.

Through President Bush and Prime Minister Singh's leadership, political, economic and cultural ties between the United States and India have never been stronger.  These ties enjoy bipartisan support in both countries.  In the last few years we have launched major initiatives in areas including counterterrorism cooperation, space research, clean energy, agriculture, education and economic development.

The historic agreement on civilian nuclear cooperation is an important part of the U.S.-India relationship, and it is beneficial to both countries.  India is one of the world's largest and most peaceful states with advanced nuclear technologies and has been isolated from the rest of the world on nuclear issues.

This agreement will bring India into the nuclear nonproliferation mainstream, providing access to the technology which can help it reach its economic and environmental objectives.  The United States remains committed to this agreement.

The ties of our governments are, in some sense, catching up to the long history of personal and professional friendship among Indians and Americans.  For decades, Indians have immigrated to the United States, joined our communities, and raised their families while maintaining their cultural heritage.

Indian-Americans are physicians, engineers, CEOs, professors, teachers, entrepreneurs.  They are a vital part of the United States' economic and social fabric.  Because of this long history, the bonds among our people and our cultures will remain strong.

Prime Minister Singh is to be commended for beginning the process of transforming India into a global economic power by initiating economic liberalization in the early 1990s.  These economic reforms have continued at varying speed through the past 15 years, regardless of the party in power.

Observers do not question whether India's reforms will continue.  They ask only about the pace.  The great Indian poet, Tagore, wrote that he had become his own version of an optimist.  He said, "If I can't make it through one door, I'll go through another door or I'll make a door."  The revolution in Indian economic thinking is making doors and invigorating the Indian economy.

India is a young country with a young population that will be looking for stable, well-paying jobs to support their families.  These reforms will help provide the jobs they will need.

Through dramatic increases in mutual trade and foreign direct investment, the United States has been a partner in India's economic emergence.  In the last few years, Indian exports to the United States have more than doubled to $21 billion, while the U.S. exports to India have doubled to $10 billion.

Similarly, investment flows have increased dramatically.  Last year Indian firms invested $2 billion in the United States and U.S. companies invested about $2 billion in India.

As the Indian government has embraced greater economic openness, the creativity and expertise of the Indian workforce has been unleashed onto the world economic stage.  We share Indian policymakers' belief that market-based policies and programs will spread opportunities to all levels of society, reaching ahm adni (ph) -- the common man.

The success of India's software industry is often told, and the story bears repeating here.  Through the combination of expertise aimed at the Indian -- excuse me -- gained at the Indian Institute of Technology and through innovative thinking, Indian industry has demonstrated that it can, as the CEO of an Indian software company recently said, take the work from any part of the world and do it in any part of the world.

India's GDP grew nearly 10 percent in 2006 compared to the world average of five and a half percent.  India's economic reforms have taken root.  And by accelerating them, the government can help ensure that India's growth rate will be, as projected, at least 8 percent for the foreseeable future.  I am optimistic about India's economic prospects.

In pursuing economic growth, India and the United States share similar values and similar challenges.  We understand that the global economy is here to stay.  To keep growing and leading the world in innovation and opportunity, the United States and India must trade freely, openly, and according to the principles of the global marketplace.

Trade also brings a wider variety of lower-priced goods, and this especially benefits lower-income citizens.  I look forward to talking with the Indian government about making progress in the Doha Development Round.

Working together to successfully conclude the Doha agreement will be the single most effective thing we can do to help raise living standards in India and around the world.  A Doha agreement is within reach, and the potential is so great that we must not let it slip through our grasp.

We also understand how rapidly changing economies can lead to uncertainty, causing many to doubt that trade brings greater benefits than costs.  Together, India and the United States must resist this protectionist sentiment.

I'm committed to working to maintain an open trade and investment climate in the United States.  Both India and the United States recognize that an integrated world economy requires protecting the global financial network against those who want to harm our people and our free economic systems by financing terrorism, weapons proliferation or other dangerous illicit activity.  We will continue implementing financial systems safeguards to help ensure our countries and our citizen's security.

The U.S. and India also share the challenge of ensuring secure and clean energy supplies.  We understand that economic growth and environmental responsibility are necessary, compatible goals.  Moving forward with the civilian nuclear agreement is one part of that solution.  Working together in a post-2012 framework, the U.N. climate change process is another. 

It is in the best interests of India, the United States and the world for India to continue and even accelerate the pace of economic reform and openness.  As with any democratic transformative effort, India faces political challenges -- something the United States also knows well.  The government is to be applauded for what it has already accomplished, and encouraged to move forward.  We stand with them as a partner as they do so.  Other countries are also developing financial sophistication and global integration.  If India slows its pace now, it risks losing the ground it's already worked so hard to gain.

Now, let me talk about two areas where the United States, and particularly the Department of Treasury, want to be partners with India in advancing reform and inclusive economic growth.  First, by assisting the government's plan to finance physical infrastructure improvements, which will benefit Indian families' daily lives and fuel the economy.  Second, by supporting steps to strengthen and expand India's financial system by building an international financial center -- a so-called IFC in Mumbai.  Achieving these two goals will require a firm commitment to adopt international standards and to move forward aggressively with reforms, despite political risks.

The Indian government estimates that to further transform its economy it needs to spend close to $500 billion over the next five years to build physical infrastructure that will deliver power to cities and villages and transport people and goods to market.  Given India's fiscal constraints, it is looking to the private sector to fund up to one-third of this needed investment.  The United States wants to support this effort to attract private financing.  During my trip, I will participate in the India Infrastructure Financial Conference in Mumbai.  At that conference and afterwards, we will highlight the opportunity of India's infrastructure initiatives to U.S. businesses.

This infrastructure investment is important to helping India achieve its second green revolution, which is what Prime Minister Singh has called for.  Our private sectors must take an active role in developing sophisticated agricultural markets in India where farmers can tap modern supply chains and processing technologies to improve their productivity and to improve the lives of their families.  The government can do more to encourage this private investment by establishing more hospital investment, regulatory and financial regimes.  Capital limitations, combined with ongoing uncertainty about contract enforcement and regulatory consistency will make infrastructure investment more difficult to obtain.

Let me now turn to the expansion of India's financial sector, especially establishing a financial center in Mumbai.  In 2006, Prime Minister Singh said that it is possible for Mumbai to emerge as a new financial capital of Asia and be the bridge between Asia and the West in the world of finance.  Properly regulated, a well-functioning financial markets are critical for a balanced development and strong, inclusive growth.  This is an area of enormous opportunity for India.  Officiate markets link capital with ideas and ambition.  They are the economic lifeblood through which people find the means to rise out of poverty.  This is true in India, in the United States and around the world.

Today Indian firms in Bangalore play a key role in the back office operations of multinational firms.  In this, India has revolutionized forever the way the world does business.  The next step is for India to develop front offices in Mumbai and provide financial services to companies and investors in and across the region.  By establishing an IFC in Mumbai, India will build a financial system that will help large and small businesses.  Shopkeepers, farmers and craftsmen need access to credit, financial and insurance products, as much as the large industrial manufacturers need this access.  The Indian government has recognized this need and commissioned a report from a high-powered expert committee.  The committee's report outlined a requirement and a timetable for developing an IFC in Mumbai.  The report is bold, thorough and ambitious.  I believe it is the right path. 

A financial footprint in Mumbai makes a door through which the world can invest in India and India can invest in the world.  Equally importantly, it gives India an important stake in the rapidly growing global financial services industry.  The report identifies the needed changes to fiscal and monetary policy and to financial regulation.  It also outlines that Mumbai's own urban infrastructure must be improved.  This demonstrates the wisdom of the Indian government's emphasis on physical and financial infrastructure improvements.  Both goals must be met in order to achieve the transition that will provide inclusive growth.

India has already made significant accomplishments in developing its financial sector and the economy has responded positively.  India's stock and commodities exchanges are thriving.  Since deregulation, the asset management industry has grown and now manages over $100 billion in assets.  By reducing constraints on financial firms, India's government can foster a more efficient allocation of financial resources.  This will help free capital to finance infrastructure investment, develop new innovations in other industries and extend financial services to a larger portion of the population.  India's large and growing middle class stands to benefit from new financial products that will help them to achieve home ownership and to invest in the best possible education for their children. 

Many of the world's leading financial firms have already opened offices in Mumbai.  They're eager to do their part in building an international financial center.  I urge my Indian colleagues to move forward quickly on the recommendations of their expert committee report.  The United States will continue as a partner with India in its economic transformation.

Treasury and the Finance Ministry have led an ongoing dialogue for several years among U.S. and Indian regulators to share experiences and best practices.  We will kick off another session to help advance the Indian government's economic reform agenda.  When I am in New Delhi next week, Mumbai's development into an IFC is an important element of that agenda.  U.S. experience can help the Indian government and industry as they work to develop an IFC in Mumbai.  And the private sector stands ready to share their experiences in dealing with the development of domestic bond markets and other elements that create the backbone of a financial center. 

We understand that the Indian officials are concerned that the greater capital flows associated with a financial center can add to inflationary pressures, destabilize the domestic financial sector or add to exchange rate volatility.  For the most part, India's on the right path to reduce these risks.  India has allowed greater flexibility in the exchange rate in recent months and the appreciation of the rupee has helped to reduce inflationary pressures.  India has also taken administrative steps to adjust the pace of capital outflows and inflows.

As recent experience in the region has shown, administrative restrictions of capital flows are blunt instruments and can have unintended consequences.  They tend to inhibit efficiency and lose their effectiveness over time.  I encourage India to continue liberalizing such restrictions.  Steps abroad to deepen the domestic financial sector will also help to mitigate the risk posed by greater capital flows.

India's development plans will require additional capital, innovative financial instruments, and a commitment to financial openness.  Recent growth in India's savings base and in the number of global firms setting up shop in India suggest that all of this is possible, that India can be a significant exporter of financial flows and investment in the years ahead.  The development of Mumbai as a financial center will take some years to come to fruition.  Nonetheless, it is a path worth taking, a path that will yield benefits all along the way for India and for the global economy.

The remarkable growth brought about by India's economic reforms has proven the wisdom of those reforms and their promise for the future.  As Prime Minister Singh said, "India is an open house.  It can become more open, more integrated into the global economy."  This will bring the inclusive growth, which is India's aim:  an economy in which small -- the small farmer, the craftsman and the next Indian entrepreneur with a dream makes the door and fulfills that dream.  India and the United States have made a very good start on delivering on our new partnership, and we can do more to reach our full strategic and economic potential.  I look forward to learning from my Indian colleagues during my visit and to working with them on these and future initiatives.

Thank you, and I welcome your questions.  Thanks.  (Applause.)

ACKERMAN:  Do you want to stay up there and answer from the podium, or --

PAULSON:  Yeah.  Yeah, sounds good to me.

ACKERMAN:  Okay.

PAULSON:  So you'll pick --

ACKERMAN:  Okay, we'll take time, so -- yes.

QUESTIONER:  Mr. Secretary, I'm Teresita Schaffer.  I'm retired Foreign Service India and I now run the South Asia Program at CSIS. 

 I was very interested in -- (off mike) -- you said that you wanted to concentrate on.  And I wonder if you could say a bit more about what you see as the vehicle for infrastructure improvements.  I know there's been some sense that there was a need to find ways of insulating those who would invest in infrastructure from the vagaries of politics and -- (off mike).  Have you found -- (off mike) -- our Indian friends found ways of doing this?

PAULSON:  Okay.  Well, let me say you obviously know your topic well, and the -- I think the biggest concern on the part of foreign investors are sanctity of contracts, the way the regulatory system works, and so on.  I think this government is doing a good job of working through a number of the outstanding commercial disputes and issues out there, and we don't have -- I don't have anything that overnight will solve this problem.  But what we're going to be doing -- and this trip is built around a very big conference on infrastructure finance where you're going to -- it's going to be heavily attended by the private sector and by the government. 

And given the size of India's needs and how key this infrastructure development is for the kind of inclusive economic growth this country is going to need, I look at it -- I think -- and a fund that has been -- I think there's been some good work that's already been done.  And one of the things that I've -- you know, that I've been a small part of in attending the meetings has been this CEO forum with the CEOs of both countries.  And I think it's pretty unique the way this works because you get -- you know, you get the key government leaders in there also and, again, working on tangible steps -- sometimes very small steps.  And so we've have a number of banks come together with an infrastructure fund, again focusing on taking small and important steps.

So I think what we -- what you're going to see is you're going to see some positives come out of this and you'll see more private-sector investment, and we just have to keep building on success.  But ultimately, the question you've raised is the big question hanging over the capital markets and the investment there.

Okay, let me -- we've got plenty of time.  Let me go right to the woman right in front of me and then we'll go to this side and --

QUESTIONER:  Thank you very much.  I'm Paula Stern, former chairwoman of U.S. International Trade Commission.

And I would like to ask you to go back and discuss the flexibility of the exchange rates in India, the value of the rupee and what they have done, and invite you to contrast what the U.S. diplomacy has been there with regard to India and compare it with that of China.  And see if you can help us understand what the magic formula was that's been successful in India.

PAULSON:  Well, let me say this is about India, not about China.  I'll talk about China later.

But I would say we have -- we have, in India, a -- we've seen real exchange-rate flexibility.  And you know, when an exchange rate is in a competitive marketplace, it makes the difference.  And India has a system that allows for that and, you know, there's a fair mount of pushback and concern in India among some that are concerned with the policy there.  But you do see that the rupee has -- based upon the underlying strength and underlying economic fundamentals, it's appreciated.  That has not slowed India's growth.  And we -- and inflation seems to be -- seems to be under control, and so that's a very good thing. 

And now there's been some movement to say, "Well, we need to be concerned about capital flows and so on."  And again, I'm a big believer in market-driven means.

Now, again, as I said, China is in a different stage of development and no one has argued -- I have not argued that China is ready to have a totally market-determined exchange right now.  But they need to get the part -- point where they can have one, and -- because it's of a -- of -- as I said, an unnatural act to be as integrated as they are into the global economic system and to goods and services and not when you look at financial markets.  So what we're encouraging them to do is to move more quickly to appreciate in the short term so that you can have a currency that's more reflective of the market and send the proper market signals through their economy and around the world, and then make the kinds of changes in their capital markets they're going to need to make to get to the point where they could have a market-determined currency. 

But I tend to -- I think what's happened in India here has been -- it's been good news in terms of what they've done with the exchange rate, and I'll just be encouraging them to stay the course and not backslide.

Thank you.

Yes, we'll go -- I don't want you to think I'm only  -- I am right-handed, but I'll -- but I will --

QUESTIONER:  Thank you. Mr. Secretary.  Paul Marino (ph), EIR News.

I wanted to ask you about M-LEC, Congress and protectionism.  It seems in light of the discussion around the Master-Liquidity Enhancement Conduit that Congress is considering many bills which are of more of a protectionist nature, maybe to freeze the mortgage sector or reconstitute our chartered banks.  So Mr. Secretary, wouldn't prudence demand that we further this dialogue and offer our policies to India of a more protectionist nature for industrial development?

PAULSON:  Well, let me just say that we have protectionist sentiment everywhere in the world today, and it is -- I would say if you had to say what's sort of the number one issue that I deal with and I'm concerned about in this country and in virtually every other part in the world, it is that the lessons for the last 30 years have been those countries that have liberalized, gone to market-based reforms, opened up investment and finance have benefited.  Other have been left behind.  But we -- there is great concern today in many places that somehow or other, in country after country, they can't compete or that foreign investment will be bad or harmful somehow or that the trade will be a negative.  And of course, I believe we need to do absolutely the opposite. 

And so it's just -- it's clear, and I think we need to do a better job.  And I think policymakers need to do a better job explaining the benefits because the dislocations and the problems are very visible to everyone, and many of them have got nothing to do with trade.  They have to do with automation and technology.  And people are never saying, "Well, we think we should turn off the Internet or turn technology back."  So a lot of it trade gets blamed and a lot of this is about skills and really getting, you know, the skills that people need to compete and do well in today's world.  Yes?

QUESTIONER:  Mr. Secretary -- I don't know if this is on -- my name is Clay Swisher.  I'm a new term member.  I'm with the Middle East Institute.  Thanks for your remarks today.  It helps put into perspective an article that was in "Foreign Affairs", this latest edition by Nick Burns over at State regarding I guess the warming of U.S.-India relations, and I'm wondering if you can explain given in India's neighborhood with Pakistan the internal crisis that's happening there as well as the unresolved issue of Kashmir, what's Pakistan going to have to say about all this?  How are they going to interpret these moves?

PAULSON:  Well, again, I think what I'm -- all I can say is, you know, there's been some positive developments in a number of areas and I tend to be a glass half full rather than half empty person and so I think the fact that India and Pakistan have a constructive dialogue and that they're working together and sharing information in the counterterrorism area -- that they're talking about difficult sensitive issues like Kashmir is all to the positive, and our only position on this is that it be resolved in a constructive way and taking into account the interests of the people in Kashmir.  Okay, let me -- there.

QUESTIONER:  Secretary -- (off mike) -- you mentioned that the -- India's growth rate for the foreseeable future was growing at about 8 percent annually -- (inaudible).  What's the quid pro quo on this for the United States in terms of our growth rate here?  Do you see something there you could translate -- (inaudible)?

PAULSON:  To the -- I can't equate the -- their growth rate directly to ours but what I can say is something I see quite strongly, and I'm glad you asked the question because many people, you know, and it's part of the -- it's -- of a protectionist sentiment -- they're not understanding global economics and so there is a tendency for some people to think because India is doing well this will be bad for the U.S. and that somehow or other, you know, we're competing with them in a way in which the faster they grow the worse it will be for us, and it's exactly the opposite -- exactly the opposite. 

Right now, one of the biggest things we've got going for us we have a very -- we have a healthy economy in the U.S. but we have exceptionally strong growth outside of the U.S. and a big part of that growth is in developing countries around the world.  Developing countries are growing twice the fast -- twice as fast the major developing countries as to developed countries are and three times as fast as they did in the 1990s.  And this is helping all of us and the thing that we should be -- if people want to be concerned about something it wouldn't be that India would continue to do well -- it would be if India wouldn't do as well or some of the other major developing countries didn't do as well that would not help us. 

So again, this is a situation where for a number of years we were the engine of growth around the world.  We are very important to global growth given the size and importance of our economy but it's nice right now.  We're going through a period where our exports are growing much faster than our imports and growth we're seeing around the world is very much helping the U.S. economy today.  Yes?

QUESTIONER:  Mr. Secretary, my name is Sidney Weintraub.  I'm with the Center for Strategic and International Studies.

You emphasize the importance of trade and the Doha Round.  My understanding is that India together with Brazil recently has been reluctant to open its market, particularly to manufactured goods.  How are you going to deal with that issue when you get there?

PAULSON:  I tell you, this is an informed audience.  I will say that, and you're asking the right questions and we -- obviously Sue Schwab, you know, our trade representative, is leading that effort.  I talk with her regularly.  I had an opportunity to talk with her again this morning about it.  You are right that -- well, first of all let me say that Doha has never been more important given the protectionist sentiment around the world and given some of the issues that are going on in the capital markets, and Doha is still very much within reach.  It's not easy but it is very much in reach, and the key to Doha is going to be market access in some of the major developing countries.  You mentioned two of them -- Brazil and India -- some of the major developing countries that have been pushing the developed countries to further open their markets, which are already quite open, and have been resisting opening theirs. 

And so we need real access and, you know, with India we're not -- there's all the conversation about agriculture and subsistence farmers and everybody understands that issue but it is -- we need more movement in the non-agriculture -- in the manufacturing tariffs and in services.  And I think a very interesting lesson for India is in areas where they've either been liberalized or they never were very regulated to begin with India does great.  Look at the whole IT software area.  Look at airlines --  certain areas of the manufacturing. 

So I think part of it is for them and it's -- we have these issues at every country for them to have the confidence that they will benefit and grow as they open up markets and as they liberalize.  But you're right -- that is, seeing movement from India and Brazil and giving some market access and again, some of the countries that have had the most to gain from the global trading system and have benefited the most from it need now to be willing to buy into the system and be prepared to provide more access into their markets.  Okay.  Yes, in the front, and then I've got time after this for one more question so this'll be the last -- this one and then one more.

QUESTIONER:  Jeff Pryce, Steptoe & Johnson.  Thank you, Mr. Secretary.

I wonder if you could talk about the benefits that a bilateral investment agreement such as India has with other capital exporting countries would have for encouraging American investment in India and particularly addressing the regulatory environment issues that were mentioned and what the prospects are for negotiation of such an agreement.

PAULSON:  Well, I think -- again, a very good question.  It's one I've thought about a lot and I've had some preliminary conversations with the Indians on this and, again, to complete a deal and I think these deals have got great value because it provides -- it -- they provide protections and comfort for investors and normally countries -- but both sides have got to want to pursue an agreement like this, and normally our counterparties who are willing to sign these agreements usually do so because they either have a strong need to attract foreign investment or they are using them to help them bring about reforms -- one or the other. 

And we have -- I think the Indian government and the finance minister and others when I've talked about it they're quite willing to talk about investment and the importance of investment.  I think it is a tougher issue, some of the things that we normally ask for -- protections, intellectual property, other things that go along with these investments.

So the way I tend to think about investment is there's no country I go to -- well, maybe there's -- I can't think of any where we don't talk about investment and what we need to do. We're open for investment in the U.S., encouraging investment, talk about some of the issues and concerns some countries have around the CFIUS process or what have you and then we talk about -- I'm all the time talking about opening up for U.S. investment and for competition and investment because it's been a key to our development and to our growth, and it's one of the big keys to our success.  And so we talk about it and we talk about it in tangible steps, but to conclude a formal bet is a major undertaking and many of our trading partners aren't ready to do such a thing.  Okay.  One more -- I'm going to go way to the back.

QUESTIONER:  Secretary Paulson, Jim Moody, Merrill Lynch.

You talked about the Doha Round -- the importance of that and, of course, we all agree.  One of the strong inhibitions to raising countries out of poverty people -- countries like India and Pakistan and those areas -- is American subsidies to our agriculture that makes their agriculture less competitive.  I know that's not your direct portfolio -- agricultural subsidies -- but are you -- do you weighed (sic) or your people weighed in on those -- that topic?  Europe, of course, is much worse than we but we have a major problem vis-a-vis countries that export agriculture.

PAULSON:  Well, I would just simply say this.  People point to that all the time because there are few other areas that -- in the U.S. that -- where they can point to issues like the subsidy, and what I say and I'm -- you know, I've learned a lot about that since coming to Washington and I deal with that very directly with my counterparts because I say the U.S. has moved in showing a willingness to move.  We are quite comfortable negotiating with the tax, okay?  If we don't complete an agreement this will not have to do with the U.S. and ag subsidies and supports.  It will not. 

It will be we -- we're negotiating with them to -- in the tax and we can do what we need to do.  The key thing is going to be what I pointed to and this is not -- I'm not one for pointing fingers -- I'm never going to point a finger at one particular country but it really is -- we need to get some market access in areas where we're already open and market access in services and financial services and non-agriculture and which is where the biggest part of the global economy is.  That's where the economic growth is going to come from and that's going to benefit the countries that provide that much more than it does all the rest of us because that will help them develop strong economies that are competitive, first-rate financial services, and so on.  So anyway that's why it's not hard to get me going on that topic.  (Laughter.)  Thank you all. 

ACKERMAN:  Thank you, Secretary.  (Applause.)  Thanks so much.  Good job. 

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