Assistant Secretary of Commerce Michael C. CamuÑez
Market Access and Compliance
Jobs, the Economy and Trade
Greater Washington Hispanic Chamber of Commerce
Saturday, November 19, 2011
As prepared for delivery.
Good evening ladies and gentlemen, members of Congress, the diplomatic corps, and distinguished guests: it’s a pleasure to be with you this evening to attend the Chamber’s Third Annual Embassy Celebration Dinner.
Before I begin, I would like to congratulate the honorable Congresswoman Ileana Ros-Lehtinen on her so richly deserved award and recognition for her important contributions in public service and international affairs. Congratulations Madame Congresswoman, and thank you for your service to our nation.
As an American of Latino heritage, I feel especially privileged to have the opportunity to address the Greater Washington Hispanic Chamber of Commerce. The Chamber is an important voice on issues affecting the Latino business community both in Washington and, as evidenced by the embassy turnout here tonight, throughout Latin America. The Chamber’s leadership is vital to advancing the interests of the Latino community here in the United States and, through forums like this one, to providing a critical voice on the importance of U.S. engagement in the Western Hemisphere.
I’ve been asked to share a few remarks this evening on the President’s domestic economic agenda, its relationship to our broader trade policy agenda, and how Latin America in particular fits into that framework. It’s a task I feel fortunate to take on, because these are issues I feel passionate about.
THE PRESIDENT’S LATINO AGENDA
I’d like to begin by affirming that President Obama shares the Chamber’s commitment to advancing the interests of Latinos and Latinas throughout the United States. And this is a commitment that is reflected in several ways throughout the administration. It starts with people, for as you’ve heard it said often, “People are Policy.”
Before joining the Commerce Department, [as you heard], I had the privilege of serving in the White House as both a Special Assistant to the President, where I was responsible for managing the President’s high level appointments to the domestic cabinet, as well as Special Counsel to the President in the Office of the White House Counsel. A big part of my portfolio was working closely with the President and senior White House staff to identify the most talented individuals who could best take on the high responsibility of carrying out the President’s vision for the country in the highest ranking positions throughout government, starting with the Cabinet. And I am proud to say that this administration has appointed a record number of Latinos and Latinas to a wide range of policymaking positions throughout government. In fact, you would be hard pressed to find a significant area of policy where a Latino or Latina is not involved in a senior capacity.
The President’s commitment to the Latino community extends beyond people to policy, of course, and he has taken on some of the most difficult and intractable challenges facing our community—challenges ranging from the reform of our educational system to the extension of health insurance to all Americans, especially low income children and families, as well as to fighting hard for important issues, like immigration reform, even when there has not always been strong political will in Washington to do what’s right and what’s necessary.
As we’ve developed our agenda, the Administration has worked hard to listen carefully to the Latino community to understand its priorities and its concerns. Apart from the numerous briefings held each month in the White House, the President has tasked his senior economic team to get out into our communities to engage with local business and civic leaders in an important dialogue about our policy priorities and to understand better what challenges the Latino community faces. For example, just last month I spent several days in the El Paso/Las Cruces region along the US-Mexico border attending a series of roundtables, including with the El Paso Hispanic Chamber of Commerce, and participating in one of the several Latino Policy Action Summits that are being held throughout the United States to bring Latino leaders together to discuss challenges facing our communities.
But the President’s highest priority by far—and the one that is most relevant to the Latino community, including the Latino business community—is getting the U.S. economy back on track and getting Americans back to work. The President is acutely aware of the disproportionate impact this economic downturn has had on the Latino community. The unemployment rate among Latinos is 11.3%—far higher than the national rate, and Latinos have suffered a devastating blow to household wealth, a shocking 66 percent decline according to a recent Pew study—the greatest decline in household wealth for any demographic group between 2005 and 2009.
And it’s this topic—what the President is doing to grow the economy and put America back to work—that I’d like to speak to this evening.
THE PRESIDENT’S ECONOMIC RECORD AND HIS EFFORTS TO PUT AMERICANS BACK TO WORK
As a starting point, I think it’s important and appropriate to take a moment to recall the economic world the President inherited and has since been fighting to improve. On day one, the Obama Administration took charge of an economy in absolute free fall. The economy was shedding about 750,000 jobs a month and had lost some eight million jobs since the start of the recession in 2007. Apart from the well known challenges facing the banking sector, key segments of the country’s automotive industry, which employs hundreds of thousands of Americans—indeed millions if we look at the full supply chain—were facing imminent collapse.
And faced with these unprecedented challenges, the President took decisive action. With the American Recovery and Reinvestment Act, for example, the President shored up the bottom line of America’s cities and states so that teachers and policemen could keep their jobs. The so-called federal stimulus created or saved over three million American jobs—preventing what might well have been a full blown economic depression had he not taken such decisive steps.
Through it all, the President has never lost sight of those Americans hit the hardest—middle-class and working-class Americans and, in particular, Latinos. That’s why the President has fought so hard, time and again, to ensure that the government is doing its part to make health care affordable and accessible to those who need it most; that’s why the President has insisted that we invest significantly in education to make sure our children get the preparation they need and deserve to be able to compete in a fierce new world, where the competition is no longer between students from the same town, but with students attending leading math and science academies in Shanghai, Jakarta, Cape Town and Singapore.
And that’s why the President has kept his eye so closely on the things government can do to stimulate job growth. And our approach has started with a commitment to helping small businesses, which, as you know well, are the main engines of economic growth in this country. The Administration has passed 17 different tax cuts for small businesses, which employ countless Latinos and middle-class Americans of all backgrounds. In addition to these tax cuts, the Small Business Jobs Act, which the President signed last year, significantly expanded the Small Business Administration’s resources to help SMEs gain access to desperately needed working capital.
The President has also prioritized our administration’s commitment to support entrepreneurship and innovation, making historic increases in our government’s investment in Research and Development, working hard to identify and replicate regional innovation clusters, and providing concrete economic assistance to incentivize the acceleration of entrepreneurial initiatives through programs like “Start-up America,” led by former AOL Executive Steve Case. At the Commerce department, our Economic Development Administration, led by my friend and colleague (and fellow Latino John Fernandez, the former Mayor of Bloomington, Indiana) is making substantial investments working with local business communities to support minority small business and entrepreneurship. For example, Commerce recently invested in the first bilingual incubator in downtown Fresno, California, which will provide local minority entrepreneurs the opportunity to develop and grow their ideas for new products and services. This incubator initiative is jointly supported by the Fresno area Hispanic Chamber of Commerce and private firms like Pacific Gas & Electric.
The President’s support for accelerating capital depreciation and expanding access to capital for small business constitute the largest temporary investment incentive for manufacturers in the history of the United States. And we’re starting to see the results: after twelve consecutive years of manufacturing job losses, for the first time in 2010 the economy created more than 250,000 new manufacturing jobs. We have now had 20 consecutive months of private sector job growth, which has created more than 2.8 million jobs in the last year and a half.
The disappointing news of course is that that growth hasn’t been as fast as we would have liked, and as a result, unemployment hasn’t fallen as fast as we’d hoped nor has the housing market recovered as quickly.
And even as families and businesses have worked to recover, we’ve been hit by some headwinds that have slowed things down, including rising oil prices and financial troubles in Europe and an absolute lack of consensus here in Washington that has impeded our government, collectively, from making the tough choices necessary to put us back on a path toward a stronger recovery. And this partisan gridlock is clearly affecting our markets, consumer confidence, and financial recovery.
Americans are understandably frustrated at the pace of recovery and at the ongoing high rates of unemployment. And so is the President. That’s why he has never stopped proposing new ideas to get the economy moving again. That’s why he’s fighting so hard for initiatives like the American Jobs Act.
Now I’m sure that, by now, you’ve all heard a lot about the President’s proposals under the American Jobs Act, so I won’t say a lot about them tonight. But I do want to stress that, collectively, these policy proposals reflect concrete, tangible initiatives that have, before now, enjoyed wide scale bipartisan support. They are policies that are practical and specific, and include common sense steps, including:
First, encouraging companies, especially small businesses, to hire people and expand payrolls by slashing the payroll tax in half for 98 percent of businesses, benefitting roughly 160 million U.S. workers next year—25 million of which are Latino. The President has also proposed eliminating the payroll tax for firms that increase their payrolls by adding new employees or increase the wages of their current workers—which will help 250,000 Latino-owned small businesses. It will also make reforms to improve access to capital for entrepreneurs and small businesses.
Second, providing critical aid to help states and cities avoid laying of teachers, firefighters and police while modernizing some 35,000 public schools and putting thousands of construction workers back to work building and repairing essential transportation and other projects.
Third, putting the long-term unemployed back to work by making the most innovative reforms to unemployment insurance in 40 years. Many of these initiatives build on successful state-level programs that have been championed by several Republican governors. The President’s plan will also extend unemployment insurance, preventing 5 million Americans from losing their benefits—1.1 million of which are Latinos and their families.
Finally, the President’s plan calls for extending the payroll tax cut that Congress enacted to put more money in the average American families pocket to help stimulate the economy. If Congress fails to extend the current payroll tax cut, taxes will go up on millions of Americans at a time when families are struggling to make ends meet. For example, a typical household earning $50,000 a year will see their annual taxes increase $1,000. This payroll tax cut is especially important for many Latino families whose wages are significantly below the national average and who will be hit hardest by a tax increase at a time they can least afford it.
I want to highlight one other aspect of the President’s proposals that I think is especially important for the long-term wellbeing of the United States. And that’s the emphasis he has placed on investing in our nation’s infrastructure.
Infrastructure is one of those bureaucratic words in Washington that makes some peoples’ eyes gloss over. But it’s the backbone of the U.S. economy. It’s what enables businesses to move goods and services efficiently, not just in this country but throughout the world. And it’s essential to our international competitiveness, especially today when companies rely on global supply chains and products worldwide.
It’s simple: if we can’t move our goods and people efficiently and reliably, we just can’t compete. And if we can’t compete, we can’t grow our economy and put our people to work.
The President’s plan calls for investing substantially in building our roads, railways and airports. It calls for the creation of a National Infrastructure Bank that will leverage public and private resources to invest in the most critical infrastructure projects that will ensure U.S. competitiveness in the long run.
So the American Jobs Act and the President’s agenda is not just about fixing a short term problem, but finding long-term solutions that will make important investments in our economy and will immediately put Americans back to work. In fact, independent economists have said that the American Jobs Act would grow the economy and lead to nearly two million jobs, which is why the American people support these bipartisan, common-sense proposals.
Importantly, the President has put forward a clear plan to pay for his Jobs Act, so that it won’t add to our long-term deficit problems.
The President has asked Congress to do the right thing for the American people and adopt these common-sense measures. And he is taking the case to the American people directly. In the meantime he is exercising his executive authority to do those things that are exclusively within his power to control, like directing the housing authorities to do more to help keep homeowners in their homes, to help students refinance burdensome student loans, and to help reduce and streamline federal bureaucracy and red tape through a comprehensive review of federal regulations that impede economic growth and job creation.
EXPORTS AND TRADE IS KEY TO U.S. LONG-TERM JOB CREATION
Now the President is focusing considerable attention, with good reason, on improving the competitiveness of our domestic economy, but he’s also pursuing a range of important policies on the international front to deepen our strategic trade and commercial engagement around the globe, and these initiatives are equally important to putting Americans back to work. So let me offer just a few words on these efforts, which relate most directly to my work at the Department of Commerce.
As this audience knows better than most, the world we are living in has changed profoundly. Gone are the days when we could rely exclusively on U.S. domestic supply and demand to drive the engine of our economy. Instead, today we find ourselves in the midst of intensely fierce global competition.
There have been tectonic shifts that have realigned the international economic order, and the United States cannot afford to be caught asleep at the wheel. The International Monetary Fund forecasts that almost 90 percent of world economic growth over the next five years will take place outside of the United States. Ninety five percent of the world’s consumers live outside the United States. Some 2 billion new people will join the consuming class in the next two decades. New international actors, like China, India, Brazil, Turkey, and others emerging economies, are now playing a big part in shaping international economic policy.
I see this in my travels. In my role as Assistant Secretary of Commerce, I have the privilege and responsibility for traveling the globe, working with our international trading partners—the nations many of you here represent—to deepen our trade and commercial relationships to our mutual benefit.
I see with my own eyes the powerful changes that are occurring. I see other economies making disciplined and difficult choices to invest in their people, in their infrastructure, and in their industries to ensure their place in the new global economy. And I realize why it’s so important to heed the President’s call to engage vigorously in this competition to win the future.
The strength of the U.S. is its private sector whose potency depends, in significant part, upon a vibrant global marketplace. Last year alone, the United States exported nearly $2 trillion worth of goods and services, which supported an estimated 9.2 million jobs. And these jobs, on average, pay up to 15% more than the typical wage in America.
But notwithstanding these new international realities, only one percent of our companies export. And exports make up a small percentage of our GDP—just 12.5% as compared to, say, over 30% of China’s economy and nearly 45% of Germany’s.
The President knows that we have to redouble our efforts in the international marketplace. That’s why he announced the National Export Initiative (NEI) in his 2010 State of the Union Address. The NEI sets the goal of doubling exports by the end of 2014, which will support millions of U.S. jobs.
The NEI has several key elements, including significantly expanding efforts across the government to promote U.S. exports; providing expanded trade financing and access to capital, especially for small businesses; eliminating key barriers to trade by more effectively enforcing our bilateral trade agreements and multilateral trade commitments under the WTO; and expanding US market share overseas through the negotiation of additional free trade agreements. The NEI is a government-wide effort that I am proud to help lead at the Department of Commerce, and which is already making significant gains. Exports of goods and services over the past twelve months (August 2010 – August 2011) totaled $2.03 trillion, 28.7% above the level of exports in 2009. We are well on pace to meet the President’s ambitious goal of doubling exports.
THE IMPORTANCE OF LATIN AMERICA TO OUR LONG TERM ECONOMIC RECOVERY
Let me conclude with just a few words about our commercial relationship with Latin America. The President has identified Latin America as central to our NEI goals. He recognizes the importance of Latin America to the American economy as an economic engine close to home. Total two-way trade between the United States and the region was approximately $700 billion dollars in 2010 and supported millions of jobs both in the U.S. and in Latin America. Despite the attention China gets, the U.S. exports more than three times as much to Latin America as we do to China, and our exports to the region will soon support more than two million jobs here in the U.S. To give just one statistic, each day more than a billion dollars in trade crosses the US-Mexico border, 85% of it by truck. And of course Latin America goes well beyond Mexico, which is why we are also focusing keenly on deepening our trade with our partners through CAFTA, and with Peru, Chile, Colombia and of course Brazil. The President’s trip this year to Brazil put a spotlight on this critical emerging partnership and the economic benefits that will come to both of our nations as we deepen our economic and commercial ties.
Even more promising is the as yet unrealized potential this relationship holds. Latin America, as a region, is growing rapidly—around 6 percent in 2010—and that is creating new opportunities for mutually beneficial trade that will create prosperity abroad and new jobs at home.
To ensure that these opportunities will be enhanced and solidified through tangible economic linkages, President Obama worked hard to pass the free trade agreements with both Colombia and Panama—both of which have recently been ratified by their respective governments. U.S. trade agreements with Latin America already cover nine countries and $471 billion in total goods trade. The Colombia and Panama agreements will only add to that impressive number, and we are working hard now to ensure these agreements are implemented as quickly as possible.
And of course, Latin America will continue to play a critical role in our ongoing trade agenda. I just returned from the Asia Pacific Economic Cooperation Leaders Summit, where much of the focus of attention was on the broad elements of the new TransPacific Partnership trade agreement, which will provide the framework of a free trade agreement of the Asia Pacific region. One of the most exciting elements of this new initiative is the important linkages between the United States, Latin America and the Asia Pacific region. The TPP reminds us that the future is not just in the East, but also in the South, and in the powerful synergies that will arise from the union of the two.
I mentioned earlier that my official duties take me all over the globe in support of our efforts to deepen our strategic trade relationships. I’ve already made several trips to Latin America, and I expect many additional trips because I remain very optimistic about the future I see there. The region is not without its challenges, but we are working hard together on important efforts to increase regional competitiveness and to grow the already strong trade and commercial ties the bind us. The President recognizes the promise of the region, and of its people, including the millions of Americans of Latino descent in this country whose heritage, like my own, is traced to these proud and vibrant nations and cultures. I want to thank the Greater Washington Hispanic Chamber of Commerce for once again assembling this distinguished group of leaders and diplomats from throughout the region, and for affording me the opportunity to be with you this evening.
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