Under Secretary of Commerce For International Trade Francisco SÁnchez
The Washington International Trade Association
Tuesday, June 2, 2010
As prepared for delivery
I want to thank Steve Lamar and James Wilkinson for this invitation. This organization -- and those of you here this morning – foster the kind of dialogue on trade that becomes more acute each day as the world changes around us.
Before I speak on President Obama’s National Export Initiative, I want to discuss the United States economy in the context of the global economy. I just returned from China on Friday. Any trip to China reminds us of the role we each bear in how the country takes advantage of the development and growth of trade.
Were we gathered in this forum last year, we would have been amidst an American economy shedding jobs and on the verge of a potential depression. Now, the economy is growing at an annualized rate of more than three percent. This is a full nine points better than when it was at MINUS 6.4 percent last year.
We have a long way to go, still, especially in light of the fact that some parts of the world’s economy turned the corner before the American economy did. Countries in Asia, such as India and China, continue to post growth of almost 10 percent per year. They are as concerned as we are about what is troubling our European counterparts at the moment, but, still, the World Bank recently reported that Latin American economies are being pulled out of recession by the economies of Asia.
The economies of other nations growing faster than ours presents us with a complex challenge that boils down to two realities:
First, we face greater competition as a country. The world is eager to reach the standards we have achieved by any means possible, and so we should expect that they will work tirelessly to pull themselves up and create new export opportunities for themselves. Yet the second reality is that this same, new world provides an enormous marketplace for America to grow our businesses.
If we adapt our thinking to these realities, we will be able to take advantage of the opportunity that, developed fully, can help safeguard how America remains a leader of the world and grows its economy.
Looking around the room, I see individuals who can process these realities and appreciate the opportunity. The very reason you joined WITA is your appreciation that societies have come into contact with each other through the course of history through trade – except that now trade has taken on a higher strategic value and is an antidote to the challenge we face.
Today the word ‘trade’ is defined by other words and acronyms: WTO, Doha, FTA’s and tariffs. But the human race has been engaged in trade since our early beginnings – it’s in our blood.
From the early days of bartering to the adventures along the Silk Road, and the tireless hunt for spices resulted in the discovery of the new world. The fruits of that trade were growth and opportunity – which holds true today.
As a result of increased global trade and our growing interdependence with the world we are witnessing a steady shift of individuals from poverty into the middle class throughout the world. This new, growing middle class presents the United States with a historic opportunity.
Our innate ability to export and feed increasing global consumption are the keys to our long-term success and, most importantly, to sustained economic growth and job creation.
To meet the challenge in part, the President created the National Export Initiative. He understands that the contours of America’s future were forming before the economic recession blew them apart in 2007. Before the downturn, exports made up 12.7 percent of the nation’s GDP – the highest since 1916. Now, with the Administration’s economic strategies beginning to pay off, you and I can concentrate on exports.
All of us know the central fact necessary to understanding how we proceed: That 95 percent of the world’s consumers lie outside the United States.
The NEI thus has two short-term goals in today’s world: To double exports in the next five years and to support two million jobs. However, the long-term purpose of the NEI is to put America on a track to take full advantage of the global marketplace.
The NEI thus will begin to reposition America’s strategic outlook, and the President formed an Export Promotion Cabinet to coordinate the way forward. In the meantime, I have implemented a 12-month plan that refocuses the degree to which the International Trade Administration works with companies that are new to exporting.
We want to give added emphasis to companies that already export and are ready for new markets. About 58 percent of the companies that export today do so to only one market. We are also moving to focus more on targeted industries and markets to accelerate exports now to create jobs in order to add momentum to the recovery.
To provide greater support to the President’s strategy, we are streamlining the way ITA manages its contacts with companies to generate closer and effective relationships.
One great step forward is growing our Office of Strategic Partnerships. Working with UPS, FED EX and the U.S. Postal Service, we are targeting their exporting clients to find new market opportunities.
By the end of this summer, we will train the entire international sales forces of these three companies on the services ITA can provide to their exporting clients. We will develop customer service management systems to enhance their exporting experiences. To further harness the potential between the public and the private sectors, we have re-engaged our Industry Trade Advisory Committees that help us develop public policies and strategies.
For the longer term, we are developing commercial engagement strategies for Brazil, India, China, Vietnam, South Africa and other nations. We have developed plans on where we want to be in these markets in five years’ time, including dealing with trade barriers. The President also supports export control reforms that envision a single export control list, a single licensing agency, a single enforcement coordination agency and single information technology system.
There is so much to be done, and meeting the growing global challenge requires more resources for us to work, within global trading rules, to support our companies.
The Administration is working with Congress on a budget request for $534.5 million; and the President is requesting a $78.5 million-increase specifically for the NEI. Still, the story of exports and international trade does not begin with ITA or the federal government. It begins in communities throughout our country.
The American economy is supported by businesses of all sizes. Economic progress in our new, interdependent world begins with ideas and innovation often in small and medium-sized businesses. Yet ask any small business owner and they will tell you that access to credit is the single most difficult barrier to launching the next successful company.
The story of trade, then, can continue with entrepreneurs who take their ideas to a bank willing to give them a chance. We need new companies to succeed, especially in light of productivity gains in so many sectors during the last few decades.
We need our local and regional banks across the country empowering our entrepreneurs, and the President has charged the Export Promotion Cabinet to work with the Small Business Administration and the Export-Import Bank and the resources of the Department of Commerce to make credit and resources more readily available.
And once a company is operational and seeking new markets, ITA, with its commercial experts in 84 countries, stands ready to help.
Export promotion and lowering trade barriers are at the core of the President’s global agenda. That includes ratifying the pending trade agreements and moving forward on the Trans Pacific Partnership.
I will continue to work towards resolving the outstanding issues in the free trade agreements with Panama, Colombia and South Korea, and on Friday, I am off to Saudi Arabia and Qatar to lead an important trade mission on public health. And not long thereafter, the American Chambers of Commerce of Latin America are meeting in Peru. That will be an opportunity for me to meet with U.S. companies and get their on-the-ground feedback on how best to continue promoting exports and developing new markets in the hemisphere.
Through our combined efforts, we will nurture America’s future. We are at our best when we innovate.
Innovation gives us something new to share with the world. You and I in our positions have to be like any business: Always moving, always creating, always eying the competition – and always investing in our people.
If we remain open to the ideas and energies of all Americans and newcomers energized by the prospect of succeeding in a county that values hard work and time, we can remain faithful to the American creed of promoting ingenuity and rewarding it with free and fair markets inside and outside our borders.
What we export of more value than anything else is transparency, open markets, good governance and the protection of intellectual property. Continuing to do so secures our place in the world.
And so I want to ask you this morning to cooperate with us in a specific way: To help us push the message that exports create jobs for the future. Each of you represents offices, organizations and institutions with important constituencies. Let us work together to distribute high and wide the materials we can send you, whether speeches, reports, white papers, videos, webinars or other tools.
You and your members can help transform hundreds of thousands of companies into exporters to sell abroad and create jobs here at home.
At the end of the day, you and I know that trade is how we can grow the economy, and we must lead for the sake of the American people. Many are still looking for work, and others are wondering what the future holds.
I think you and I know we hold part of that future. We do live in a challenging world. It sometimes vexes us, and no one by themselves can do what needs to be done to make the future better.
Government alone cannot do it. You alone cannot do it. There have been times in history when the nation has had to come together to achieve a larger, long-term goal. This is one of those moments. If we work together, we can succeed in expanding exports, creating jobs and building the America of the future.
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