Under Secretary of Commerce For International Trade Francisco SÁnchez
The American Chambers of Commerce of Latin America
Monday, June 21, 2010
As prepared for delivery
Thank you for your introduction, Aldo Defillippi. And thank you for inviting me to attend this important gathering. Our meeting here in Lima symbolizes another pivotal moment for our hemisphere. Today, more than ever, we have to appreciate that we share mutual interests that can only be served by our mutual economic integration.
(Interactive Game with Audience on Assumptions and Shared Interests)
Whether we know how different this moment is from the past will determine if we can convert it into a new opportunity so that 10 and 20 and 30 years from now all of our hemisphere is prosperous and secure. How different is today from the past turning points of our shared experience? This question has two answers at least.
The first is that we all understand that the globe is realigning. No one of any serious standing can deny how the world is being transformed by the rise of once-dormant nations large and small. The second is that a growing middle class is fueling a global marketplace that holds promise for significant economic progress.
The change the world is undergoing is common knowledge to the man on the street whether in Los Angeles or Lima. When an owner of a company of any size in Chiclayo or a worker in any line of labor in Chicago knows that the crisis in Greece or the overheated real estate markets in the United States, England or Spain caused him or her a problem, it presents the rest of us with a vastly different moment.
This special moment affords us the opportunity to think about what is possible. I can only conclude that unless we integrate our economies, we cannot remain competitive in an increasingly competitive world that is realigning.
This is an opportunity for stereotypes to be shed, for individuals to invest and plan and for companies to look at the production and marketing opportunities that abound in our hemisphere. In the face of overwhelming challenges – from earthquakes to oil spills – and in the midst of the continued economic plight of so many millions in the hemisphere – we can be optimistic about the future.
We know already that the growth of global trade has spurred the creation of a new middle class throughout the world. And from that middle class the future can rise.
Latin America is not absent from this historic lifting-up of millions from poverty. As President Garcia described this morning, Peru is a perfect example of recent, and significant, decreases in poverty. And these new consumers are driving new economic development on a global scale.
Before I go any further, I want to give you a clearer picture of who I am so that you might know how committed I am to an agenda of progress in the hemisphere. My parents emigrated from Spain to Tampa, Florida, where I was born. Tampa is a port city on the Gulf of Mexico that at the moment is very worried about the affects of the British Petroleum oil spill. Though the spill is a disaster, it reminds us of the interconnectedness of our hemisphere.
After attending Florida State University, I managed the State of Florida Caribbean Basin Initiative Program to promote trade and investment in the region. I worked with peace teams in Medellin, Colombia. I have conducted business in all parts of the region, and was honored to participate in the negotiations of the border dispute between Peru and Ecuador. At the White House Office of the Special Envoy to the Americas, I helped promote trade within the hemisphere. Later, as an assistant secretary of transportation, I worked on open-skies agreements that facilitated cargo, tourism and business travel. So in the best tradition of Spanish family names, I easily could have free trade, business and economic development as three of my middle names. Francisco Comercio Internacional, Negocios y Desarollo Economico Sanchez, not bad, huh?
So when President Obama asked me to serve as Under Secretary of Commerce for International Trade, I readily accepted. I know that he understands that the world has become a global marketplace and is on the verge of fueling a massive increase in consumption across our hemisphere. Increasing market integration can be highly rewarding across the region.
A well-known example is Embraer. The demand for its airliners is growing around the globe, yet 60 percent of the components of these Brazilian-produced jets are American-made.
Our job is to find the thousands of Embraers in the hemisphere that can make an integrated model economy work to create jobs and improve the livelihood of millions.
The moment we face is made more opportune by the fact our economies are growing again. In this context, it is important that the American economy as well as the economies of hemisphere have started to grow again. Had we gathered in this forum last year, our anxiety over an American economy shedding jobs and on the verge of a depression would have been our topic of conversation.
Today, one of our topics of conversation is that, ten years ago, China was Brazil's 12th largest trading partner; now, it is Brazil's No. 1 trading partner. China was Colombia's 35th largest trading partner in 2000 and is now its fourth-largest.
Looking around the room, I see individuals who understand the implications of the new reality of a realigned world. I also see individuals who can appreciate the opportunity that mutual integration and the rise of the middle class within our hemisphere imply.
Though today the word ‘trade’ is defined by acronyms -- WTO, Doha, FTA’s and many more –, increased global trade and our growing interdependence are moving millions of individuals from poverty. To take advantage of the opportunities before us, we have a lot of work ahead of us. We must remain focused on the problems of low educational attainment, lagging public health, anemic transportation system and dangers to the environment. We have to understand just how far we have to go.
The rise of the middle class in many nations is the platform on which market integration can advance, for it is the new middle class that forms a powerful market that as it grows needs products and services that extend from the most basic to the most sophisticated. The rise and growth of the population of the hemisphere has made it fertile enough ground for private-sector growth and investment.
We are following our own advice in the United States on this very subject. Before the recession hit in 2007, the contours of America’s future were forming and exports made up nearly 13 percent of the nation’s GDP – the highest since 1916.
Thus President Obama’s National Export Initiative has two short-term goals: 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 within global trading rules.
To that end, we are developing and discussing how to engage in new commercial strategies for the hemisphere. We want to know where we can be in these markets in five years’ time, including the reduction of trade barriers.
I will continue to work towards resolving the outstanding issues in the free trade agreements with Panama and Colombia and assist where I can to complete negotiations on the Trans-Pacific Partnership. Our FTA with Chile, and our recently ratified FTA with our friends right here in Peru, offer prime examples of the potential benefits of such trade agreements. And, as always, we want to be more than a good neighbor, which is why we are heavily involved in helping to rebuild Haiti and to help Chile recover from the earthquake.
I would like to conclude with an invitation. A good place to continue our conversation is in Atlanta in November. There, the American Competitiveness Forum will tackle the very problems that if not solved will limit how competitive all of us can remain. We should meet there again.
We have often said that we are important to each other. Those words have never been more true. At the end of the day, you and I hold in our hands a significant part of the future of the hemisphere. The future of business in Latin America is the business of the future itself. If we do not recognize our mutual interests and the need to integrate them into a competitive model, we do so at our own peril.
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