Thank you very much, Richard, and I am delighted to be here in these new headquarters. I have been often to, I guess, the mother ship in New York City, but it’s good to have an outpost of the Council right here down the street from the State Department. We get a lot of advice from the Council, so this will mean I won’t have as far to go to be told what we should be doing and how we should think about the future.

Richard just gave what could be described as a mini version of my remarks in talking about the issues that confront us. But I look out at this audience filled with not only many friends and colleagues, but people who have served in prior administrations. And so there is never a time when the in-box is not full.

Shortly before I started at the State Department, a former Secretary of State called me with this advice: Don’t try to do too much. And it seemed like a wise admonition, if only it were possible. But the international agenda today is unforgiving: two wars, conflict in the Middle East, ongoing threats of violent extremism and nuclear proliferation, global recession, climate change, hunger and disease, and a widening gap between the rich and the poor. All of these challenges affect America’s security and prosperity, and they all threaten global stability and progress.

But they are not reason to despair about the future. The same forces that compound our problems – economic interdependence, open borders, and the speedy movement of information, capital, goods, services and people – are also part of the solution. And with more states facing common challenges, we have the chance, and a profound responsibility, to exercise American leadership to solve problems in concert with others. That is the heart of America’s mission in the world today.

Now, some see the rise of other nations and our economic troubles here at home as signs that American power has waned. Others simply don’t trust us to lead; they view America as an unaccountable power, too quick to impose its will at the expense of their interests and our principles. But they are wrong.

The question is not whether our nation can or should lead, but how it will lead in the 21st century. Rigid ideologies and old formulas don’t apply. We need a new mindset about how America will use its power to safeguard our nation, expand shared prosperity, and help more people in more places live up to their God-given potential.

President Obama has led us to think outside the usual boundaries. He has launched a new era of engagement based on common interests, shared values, and mutual respect. Going forward, capitalizing on America’s unique strengths, we must advance those interests through partnership, and promote universal values through the power of our example and the empowerment of people. In this way, we can forge the global consensus required to defeat the threats, manage the dangers, and seize the opportunities of the 21st century. America will always be a world leader as long as we remain true to our ideals and embrace strategies that match the times. So we will exercise American leadership to build partnerships and solve problems that no nation can solve on its own, and we will pursue policies to mobilize more partners and deliver results.

First, though, let me say that while the ideas that shape our foreign policy are critically important, this, for me, is not simply an intellectual exercise. For over 16 years, I’ve had the chance, the privilege, really, to represent our country overseas as First Lady, as a senator, and now as Secretary of State. I’ve seen the bellies of starving children, girls sold into human trafficking, men dying of treatable diseases, women denied the right to own property or vote, and young people without schooling or jobs gripped by a sense of futility about their futures.

I’ve also seen how hope, hard work, and ingenuity can overcome the longest of odds. And for almost 36 years, I have worked as an advocate for children, women and families here at home. I’ve traveled across our country listening to everyday concerns of our citizens. I’ve met parents struggling to keep their jobs, pay their mortgages, cover their children’s college tuitions, and afford healthcare.

And all that I have done and seen has convinced me that our foreign policy must produce results for people – the laid-off auto worker in Detroit whose future will depend on global economic recovery; the farmer or small business owner in the developing world whose lack of opportunity can drive political instability and economic stagnation; the families whose loved ones are risking their lives for our country in Iraq and Afghanistan and elsewhere; children in every land who deserve a brighter future. These are the people – hundreds of millions of them here in America and billions around the world – whose lives and experiences, hopes and dreams, must inform the decisions we take and the actions that follow. And these are the people who inspire me and my colleagues and the work that we try to do every day.

In approaching our foreign policy priorities, we have to deal with the urgent, the important, and the long-term all at once. But even as we are forced to multi-task – a very gender-related term (laughter) – we must have priorities, which President Obama has outlined in speeches from Prague to Cairo, from Moscow to Accra. We want to reverse the spread of nuclear weapons, prevent their use, and build a world free of their threat. We want to isolate and defeat terrorists and counter violent extremists while reaching out to Muslims around the world. We want to encourage and facilitate the efforts of all parties to pursue and achieve a comprehensive peace in the Middle East. We want to seek global economic recovery and growth by strengthening our own economy, advancing a robust development agenda, expanding trade that is free and fair, and boosting investment that creates decent jobs. We want to combat climate change, increase energy security, and lay the foundation for a prosperous clean-energy future. We want to support and encourage democratic governments that protect the rights and deliver results for their people. And we intend to stand up for human rights everywhere.

Liberty, democracy, justice and opportunity underlie our priorities. Some accuse us of using these ideals to justify actions that contradict their very meaning. Others say we are too often condescending and imperialistic, seeking only to expand our power at the expense of others. And yes, these perceptions have fed anti-Americanism, but they do not reflect who we are. No doubt we lost some ground in recent years, but the damage is temporary. It’s kind of like my elbow – it’s getting better every day. (Laughter.)

Whether in Latin America or Lebanon, Iran or Liberia, those who are inspired by democracy, who understand that democracy is about more than just elections – that it must also protect minority rights and press freedom, develop strong, competent and independent judiciaries, legislatures and executive agencies, and commit for democracy to deliver results – these are the people who will find that Americans are their friends, not adversaries. As President Obama made clear last week in Ghana, this Administration will stand for accountable and transparent governance, and support those who work to build democratic institutions wherever they live.

Our approach to foreign policy must reflect the world as it is, not as it used to be. It does not make sense to adapt a 19th century concert of powers, or a 20th century balance of power strategy. We cannot go back to Cold War containment or to unilateralism.

Today, we must acknowledge two inescapable facts that define our world: First, no nation can meet the world’s challenges alone. The issues are too complex. Too many players are competing for influence, from rising powers to corporations to criminal cartels; from NGOs to al-Qaida; from state-controlled media to individuals using Twitter.

Second, most nations worry about the same global threats, from non-proliferation to fighting disease to counter-terrorism, but also face very real obstacles – for reasons of history, geography, ideology, and inertia. They face these obstacles and they stand in the way of turning commonality of interest into common action.

So these two facts demand a different global architecture – one in which states have clear incentives to cooperate and live up to their responsibilities, as well as strong disincentives to sit on the sidelines or sow discord and division.

So we will exercise American leadership to overcome what foreign policy experts at places like the Council call “collective action problems” and what I call obstacles to cooperation. For just as no nation can meet these challenges alone, no challenge can be met without America.

And here’s how we’ll do it: We’ll work through existing institutions and reform them. But we’ll go further. We’ll use our power to convene, our ability to connect countries around the world, and sound foreign policy strategies to create partnerships aimed at solving problems. We’ll go beyond states to create opportunities for non-state actors and individuals to contribute to solutions.

We believe this approach will advance our interests by uniting diverse partners around common concerns. It will make it more difficult for others to abdicate their responsibilities or abuse their power, but will offer a place at the table to any nation, group, or citizen willing to shoulder a fair share of the burden. In short, we will lead by inducing greater cooperation among a greater number of actors and reducing competition, tilting the balance away from a multi-polar world and toward a multi-partner world.

Now, we know this approach is not a panacea. We will remain clear-eyed about our purpose. Not everybody in the world wishes us well or shares our values and interests. And some will actively seek to undermine our efforts. In those cases, our partnerships can become power coalitions to constrain or deter those negative actions.

And to these foes and would-be foes, let me say our focus on diplomacy and development is not an alternative to our national security arsenal. Our willingness to talk is not a sign of weakness to be exploited. We will not hesitate to defend our friends, our interests, and above all, our people vigorously and when necessary with the world’s strongest military. This is not an option we seek nor is it a threat; it is a promise to all Americans.

Building the architecture of global cooperation requires us to devise the right policies and use the right tools. I speak often of smart power because it is so central to our thinking and our decision-making. It means the intelligent use of all means at our disposal, including our ability to convene and connect. It means our economic and military strength; our capacity for entrepreneurship and innovation; and the ability and credibility of our new President and his team. It also means the application of old-fashioned common sense in policymaking. It’s a blend of principle and pragmatism.

Smart power translates into specific policy approaches in five areas. First, we intend to update and create vehicles for cooperation with our partners; second, we will pursue principled engagement with those who disagree with us; third, we will elevate development as a core pillar of American power; fourth, we will integrate civilian and military action in conflict areas; and fifth, we will leverage key sources of American power, including our economic strength and the power of our example.

Our first approach is to build these stronger mechanisms of cooperation with our historic allies, with emerging powers, and with multilateral institutions, and to pursue that cooperation in, as I said, a pragmatic and principled way. We don’t see those as in opposition, but as complementary.

We have started by reinvigorating our bedrock alliances, which did fray in recent years. In Europe, that means improved bilateral relationships, a more productive partnership with the European Union, and a revitalized NATO. I believe NATO is the greatest alliance in history. But it was built for the Cold War. The new NATO is a democratic community of nearly a billion people stretching from the Baltics in the East to Alaska in the West. We’re working to update its strategic concept so that it is as effective in this century as it was in the last.
At the same time, we are working with our key treaty allies Japan and Korea, Australia, Thailand, and the Philippines and other partners to strengthen our bilateral relationships as well as trans-Pacific institutions. We are both a trans-Atlantic and a trans-Pacific nation.

We will also put special emphasis on encouraging major and emerging global powers – China, India, Russia and Brazil, as well as Turkey, Indonesia, and South Africa – to be full partners in tackling the global agenda. I want to underscore the importance of this task, and my personal commitment to it. These states are vital to achieving solutions to the shared problems and advancing our priorities – nonproliferation, counterterrorism, economic growth, climate change, among others. With these states, we will stand firm on our principles even as we seek common ground.

This week, I will travel to India, where External Affairs Minister Krishna and I will lay out a broad-based agenda that calls for a whole-of-government approach to our bilateral relationship. Later this month, Secretary Geithner and I will jointly lead our new strategic and economic dialogue with China. It will cover not just economic issues, but the range of strategic challenges we face together. In the fall, I will travel to Russia to advance the bi-national presidential commission that Foreign Minister Lavrov and I will co-chair.

The fact of these and other meetings does not guarantee results, but they set in motion processes and relationships that will widen our avenues of cooperation and narrow the areas of disagreement without illusion. We know that progress will not likely come quickly, or without bumps in the road, but we are determined to begin and stay on this path.

Now our global and regional institutions were built for a world that has been transformed, so they too must be transformed and reformed. As the President said following the recent G-8 meeting in Italy, we are seeking institutions that “combine the efficiency and capacity for action with inclusiveness.” From the UN to the World Bank, from the IMF to the G-8 and the G-20, from the OAS and the Summit of the Americas to ASEAN and APEC – all of these and other institutions have a role to play, but their continued vitality and relevance depend on their legitimacy and representativeness, and the ability of their members to act swiftly and responsibly when problems arise.

We also will reach out beyond governments, because we believe partnerships with people play a critical role in our 21st century statecraft. President Obama’s Cairo speech is a powerful example of communicating directly with people from the bottom up. And we are following up with a comprehensive agenda of educational exchanges, outreach, and entrepreneurial ventures. In every country I visit, I look for opportunities to bolster civil society and engage with citizens, whether at a town hall in Baghdad – a first in that country; or appearing on local popular television shows that reach a wide and young audience; or meeting with democracy activists, war widows, or students.

I have appointed special envoys to focus on a number of specific challenges, including the first Ambassador for Global Women’s Issues and an ambassador to build new public-private partnerships and to engage Diaspora communities in the United States to increase opportunities in their native lands. And we are working at the State Department to ensure that our government is using the most innovative technologies not only to speak and listen across borders, not only to keep technologies up and going, but to widen opportunities especially for those who are too often left on the margins. We’re taking these steps because reaching out directly to people will encourage them to embrace cooperation with us, making our partnerships with their governments and with them stronger and more durable.

We’ve also begun to adopt a more flexible and pragmatic posture with our partners. We won’t agree on every issue. Standing firm on our principles shouldn’t prevent us from working together where we can. So we will not tell our partners to take it or leave it, nor will we insist that they’re either with us or against us. In today’s world, that’s global malpractice.

Our diplomacy regarding North Korea is a case in point. We have invested a significant amount of diplomatic resources to achieve Security Council consensus in response to North Korea’s provocative actions. I spoke numerous times to my counterparts in Japan, South Korea, Russia and China, drawing out their concerns, making our principles and redlines clear, and seeking a path forward. The short-term results were two unanimous Security Council resolutions with real teeth and consequences for North Korea, and then the follow-on active involvement of China, Russia, and India with us in persuading others to comply with the resolutions. The long-term result, we believe, will be a tougher joint effort toward the complete and verifiable denuclearization of the Korean Peninsula.

Cultivating these partnerships and their full range takes time and patience. It also takes persistence. That doesn’t mean procrastinating on urgent issues. Nor is it a justification for delaying efforts that may take years to bear fruit. In one of my favorite observations, Max Weber said, “Politics is the long and slow boring of hard boards. It takes both passion and perspective.” Perspective dictates passion and patience. And of course, passion keeps us from not finding excuses to do nothing.

Now I’m well aware that time alone does not heal all wounds; consider the Palestinian-Israeli conflict. That’s why we wasted no time in starting an intensive effort on day one to realize the rights of Palestinians and Israelis to live in peace and security in two states, which is in America’s interests and the world’s. We’ve been working with the Israelis to deal with the issue of settlements, to ease the living conditions of Palestinians, and create circumstances that can lead to the establishment of a viable Palestinian state. For the last few decades, American administrations have held consistent positions on the settlement issue. And while we expect action from Israel, we recognize that these decisions are politically challenging.

And we know that progress toward peace cannot be the responsibility of the United States – or Israel – alone. Ending the conflict requires action on all sides. The Palestinians have the responsibility to improve and extend the positive actions already taken on security; to act forcefully against incitement; and to refrain from any action that would make meaningful negotiations less likely.

And Arab states have a responsibility to support the Palestinian Authority with words and deeds, to take steps to improve relations with Israel, and to prepare their publics to embrace peace and accept Israel’s place in the region. The Saudi peace proposal, supported by more than twenty nations, was a positive step. But we believe that more is needed. So we are asking those who embrace the proposal to take meaningful steps now. Anwar Sadat and King Hussein crossed important thresholds, and their boldness and vision mobilized peace constituencies in Israel and paved the way for lasting agreements. By providing support to the Palestinians and offering an opening, however modest, to the Israelis, the Arab states could have the same impact. So I say to all sides: Sending messages of peace is not enough. You must also act against the cultures of hate, intolerance and disrespect that perpetuate conflict.

Our second policy approach is to lead with diplomacy, even in the cases of adversaries or nations with whom we disagree. We believe that doing so advances our interests and puts us in a better position to lead with our other partners. We cannot be afraid or unwilling to engage. Yet some suggest that this is a sign of naiveté or acquiescence to these countries’ repression of their own people. I believe that is wrong. As long as engagement might advance our interests and our values, it is unwise to take it off the table. Negotiations can provide insight into regimes’ calculations and the possibility – even if it seems remote – that a regime will eventually alter its behavior in exchange for the benefits of acceptance into the international community. Libya is one such example. Exhausting the option for dialogue is also more likely to make our partners more willing to exert pressure should persuasion fail.

With this in mind, I want to say a few words about Iran. We watched the energy of Iran’s election with great admiration, only to be appalled by the manner in which the government used violence to quell the voices of the Iranian people, and then tried to hide its actions by arresting foreign journalists and nationals, and expelling them, and cutting off access to technology. As we and our G-8 partners have made clear, these actions are deplorable and unacceptable.
We know very well what we inherited with Iran, because we deal with that inheritance every day. We know that refusing to deal with the Islamic Republic has not succeeded in altering the Iranian march toward a nuclear weapon, reducing Iranian support for terror, or improving Iran’s treatment of its citizens.

Neither the President nor I have any illusions that dialogue with the Islamic Republic will guarantee success of any kind, and the prospects have certainly shifted in the weeks following the election. But we also understand the importance of offering to engage Iran and giving its leaders a clear choice: whether to join the international community as a responsible member or to continue down a path to further isolation.

Direct talks provide the best vehicle for presenting and explaining that choice. That is why we offered Iran’s leaders an unmistakable opportunity: Iran does not have a right to nuclear military capacity, and we’re determined to prevent that. But it does have a right to civil nuclear power if it reestablishes the confidence of the international community that it will use its programs exclusively for peaceful purposes.

Iran can become a constructive actor in the region if it stops threatening its neighbors and supporting terrorism. It can assume a responsible position in the international community if it fulfills its obligations on human rights. The choice is clear. We remain ready to engage with Iran, but the time for action is now. The opportunity will not remain open indefinitely.

Our third policy approach, and a personal priority for me as Secretary, is to elevate and integrate development as a core pillar of American power. We advance our security, our prosperity, and our values by improving the material conditions of people’s lives around the world. These efforts also lay the groundwork for greater global cooperation, by building the capacity of new partners and tackling shared problems from the ground up.

A central purpose of the Quadrennial Diplomacy and Development Review that I announced last week is to explore how to effectively design, fund, and implement development and foreign assistance as part of a broader foreign policy. Let’s face it. We have devoted a smaller percentage of our government budget to development than almost any other advanced country. And too little of what we have spent has contributed to genuine and lasting progress. Too much of the money has never reached its intended target, but stayed here in America to pay salaries or fund overhead in contracts. I am committed to more partnerships with NGOs, but I want more of our tax dollars to be used effectively and to deliver tangible results.

As we seek more agile, effective, and creative partnerships for development, we will focus on country-driven solutions, such as those we are launching with Haiti on recovery and sustainable development, and with African states on global hunger. These initiatives must not be designed to help countries scrape by – they are a tool to help countries stand on their own.

Our development agenda will also focus on women as drivers of economic growth and social stability. Women have long comprised the majority of the world’s unhealthy, unschooled, and underfed. They are also the bulk of the world’s poor. The global recession has had a disproportionate effect on women and girls, which in turn has repercussions for families, communities, and even regions. Until women around the world are accorded their rights – and afforded the opportunities of education, health care, and gainful employment – global progress and prosperity will have its own glass ceiling.

Our fourth approach is to ensure that our civilian and military efforts operate in a coordinated and complementary fashion where we are engaged in conflict. This is the core of our strategy in Afghanistan and Iraq, where we are integrating our efforts with international partners.

In Afghanistan and Pakistan, our goal is to disrupt, dismantle, and ultimately defeat al-Qaida and its extremist allies, and to prevent their return to either country. Yet Americans often ask, why do we ask our young men and women to risk their lives in Afghanistan when al-Qaida’s leadership is in neighboring Pakistan? And that question deserves a good answer: We and our allies fight in Afghanistan because the Taliban protects al-Qaida and depends on it for support, sometimes coordinating activities. In other words, to eliminate al-Qaida, we must also fight the Taliban.

Now, we understand that not all those who fight with the Taliban support al-Qaida, or believe in the extremist policies the Taliban pursued when in power. And today we and our Afghan allies stand ready to welcome anyone supporting the Taliban who renounces al-Qaida, lays down their arms, and is willing to participate in the free and open society that is enshrined in the Afghan Constitution.

To achieve our goals, President Obama is sending an additional 17,000 troops and 4,000 military trainers to Afghanistan. Equally important, we are sending hundreds of direct hire American civilians to lead a new effort to strengthen the Afghan Government, help rebuild the once-vibrant agricultural sector, create jobs, encourage the rule of law, expand opportunities for women, and train the Afghan police. No one should doubt our commitment to Afghanistan and its people. But it is the Afghan people themselves who will determine their own future.

As we proceed, we must not forget that success in Afghanistan also requires close cooperation from neighboring Pakistan, which I will visit this fall. Pakistan is itself under intense pressure from extremist groups. Trilateral cooperation among Afghanistan, Pakistan, and the United States has built confidence and yielded progress on a number of policy fronts. Our national security, as well as the future of Afghanistan, depends on a stable, democratic, and economically viable Pakistan. And we applaud the new Pakistani determination to deal with the militants who threaten their democracy and our shared security.

In Iraq, we are bolstering our diplomacy and development programs while we implement a responsible withdrawal of our troops. Last month our combat troops successfully redeployed from towns and cities. Our principal focus is now shifting from security issues to civilian efforts that promote Iraqi capacity – supporting the work of the Iraqi ministries and aiding in their efforts to achieve national unity. And we are developing a long-term economic and political relationship with Iraq as outlined by the US-Iraq Strategic Framework Agreement. This Agreement forms the basis of our future cooperation with Iraq and the Iraqi people, and I look forward to discussing it and its implementation with Prime Minister Maliki when he comes to Washington next week.

Our fifth approach is to shore up traditional sources of our influence, including economic strength and the power of our example. We renewed our own values by prohibiting torture and beginning to close the Guantanamo Bay detention facility. And we have been straightforward about our own measure of responsibility for problems like drug trafficking in Mexico and global climate change. When I acknowledged the obvious about our role in Mexico’s current conflict with narco-traffickers, some were critical. But they’re missing the point. Our capacity to take responsibility, and our willingness to change, to do the right thing, are themselves hallmarks of our greatness as a nation and strategic assets that can help us forge coalitions in the service of our interests.

That is certainly true when it comes to key priorities like nonproliferation and climate change. President Obama is committed to the vision of a world without nuclear weapons and a series of concrete steps to reduce the threat and spread of these weapons, including working with the Senate to ratify the follow-on START agreement and the Comprehensive Test Ban Treaty, taking on greater responsibility within the Non Proliferation Treaty Framework and convening the world’s leaders here in Washington next year for a nuclear summit. Now we must urge others to take practical steps to advance our shared nonproliferation agenda.

Our Administration is also committed to deep reductions in greenhouse gas emissions, with a plan that will dramatically change the way we produce, consume and conserve energy, and in the process spark an explosion of new investment, and millions of jobs. Now we must urge every other nation to meet its obligations and seize the opportunities of a clean energy future.

We are restoring our economy at home to enhance our strength and capacity abroad, especially at this time of economic turmoil. Now, this is not a traditional priority for a Secretary of State, but I vigorously support American recovery and growth as a pillar of our global leadership. And I am committed to restoring a significant role for the State Department within a whole-of-government approach to international economic policy-making. We will work to ensure that our economic statecraft – trade and investment, debt forgiveness, loan guarantees, technical assistance, decent work practices – support our foreign policy objectives. When coupled with a sound development effort, our economic outreach can give us a better form of globalization, reducing the bitter opposition of recent years and lifting millions more out of poverty.

And finally, I am determined to ensure that the men and women of our Foreign and Civil Service have the resources they need to implement our priorities effectively and safely. That’s why I appointed for the first time a Deputy Secretary for Management and Resources. It’s why we worked so hard to secure additional funding for State and USAID. It’s why we have put ourselves on a path to double foreign assistance over the next few years. And it’s why we are implementing a plan to dramatically increase the number of diplomats and development experts.

Just as we would never deny ammunition to American troops headed into battle, we cannot send our civilian personnel into the field underequipped. If we don’t invest in diplomacy and development, we will end up paying a lot more for conflicts and their consequences. As Secretary Gates has said, diplomacy is an indispensable instrument of national security, as it has been since Franklin, Jefferson and Adams won foreign support for Washington’s army.

Now all of this adds up to a very ambitious agenda. But the world does not afford us the luxury of choosing or waiting. As I said at the outset, we must tackle the urgent, the important and the long-term all at once.

We are both witness to and makers of significant change. We cannot and should not be passive observers. We are determined to channel the currents of change toward a world free of violent extremism, nuclear weapons, global warming, poverty, and abuses of human rights, and above all, a world in which more people in more places can live up to their God-given potential.

The architecture of cooperation we seek to build will advance all these goals, using our power not to dominate or divide but to solve problems. It is the architecture of progress for America and all nations.

More than 230 years ago, Thomas Paine said, “We have it within our power to start the world over again.” Today, in a new and very different era, we are called upon to use that power. I believe we have the right strategy, the right priorities, the right policies, we have the right President, and we have the American people, diverse, committed, and open to the future.

Now all we have to do is deliver. Thank you all very much.