Under Secretary of Commerce For International Trade Francisco SÁnchez
The San Antonio Chamber of Commerce
Monday, February 7, 2011
As prepared for delivery
Thank you, Richard. It is great to see you again, and I am glad the weather did not prevent you from coming. Thank you, Mayor Castro, for your continued leadership.
That was some game last night, and I understand you had a loud, Texas-kind-of-thing here at the Marriott last night. Who could you possibly have been cheering for? The Packers or the Steelers. Now, that is a heckuva choice for Cowboys fans. Being a graduate of Florida State, I am in the same situation when Florida plays Miami – like being in suspended animation.
So football season is over but spring training is just around the corner. In between now and then, we need to get some business done, and so I welcome you on your annual pilgrimage to Washington. At the heart of your trip are the economic concerns that dominate the minds of everyone else in the country.
Last year I spoke at the Free Trade Alliance meeting in San Antonio. At the time, the President had just announced the National Export Initiative as part of his economic recovery package. Fast forward one year later, and the economy is growing but needs to grow faster. One of the bright spots in the economy is the increase in exports.
Through November, exports grew nearly 17 percent compared to 2009. In total, net exports are likely to contribute between two and three percentage points to the annual rate of real GDP growth in the fourth quarter. November marked the highest monthly exports of consumer goods on record.
It is an encouraging sign as we try to dust ourselves off from the recession that began in 2007. The recovery of the global economy was led by nations with a growing global middle class forming in countries that are rapidly growing their economies. For San Antonio and the rest of the country, this growing global middle class comprises new markets that need to be incorporated in the strategic business plans of companies throughout America and within the activities of chambers of commerce such as this one.
The Brookings Institution estimates that middle-class consumption in Brazil, India and China accounts for about 8.4 percent of global middle class consumption today and could reach 26 percent by 2020. As their disposable incomes grow, these new consumers would be attracted to American goods, services and products – especially if they are innovative entries in the marketplace. And San Antonio, already an international exporter, is growing a biotech and biomedicine sector that will generate innovation as we go forward.
In many ways, San Antonio and Texas years ago pointed the way ahead. It was there along the border that international relations with Mexico began to strengthen our commercial relationship. It was an uneven beginning point and there are still challenges with NAFTA, but it heralded the next chapter of the development of the American economy in a global marketplace in which we are being outpaced by nations such as Germany.
Exports represent more than 40 percent of Germany’s GDP. Exports form only about 12 percent in our economy. Imagine the jobs and the economic activity had we seen the emergence of the global middle class coming and had we worked on developing our export platform. Now we have to adjust our economic environment to capitalize on a global economy in which we are still predominant – but with other nations growing at explosive rates.
The economy of the future requires that American businesses compete and win in the global marketplace. The global economy can no longer simply rely on American consumption. About 95 percent of the world’s consumers live outside of our borders. And their importance will only continue to grow. The IMF forecasts that 87 percent of world economic growth over the next five years will occur outside the U.S. India alone adds a population the size of Australia every year.
President Obama, of course, understands the relationship between the new global economy and its connection to the American economy, which is why a year ago he announced a National Export Initiative. This Administration continues to view the future now as it did a year ago: We must grow the domestic economy while making sure that we can do all that is possible within global trading rules to grow our international commerce with the nations of the world.
Exports are about growing bottom lines and employment in the days ahead, and in the first year of the NEI we refocused how various agencies of the federal government support American commerce. And we have taken action against those who dump their products in our markets and prohibit our entry into theirs.
We are focusing on promoting trade, counseling American companies on overseas opportunities, opening markets through trade missions and other promotional events, helping to eliminate trade barriers, and ensuring that foreign business environments are transparent and equitable.
Just a few years ago, government took unprecedented action to rescue our economy. From TARP to the Recovery Act, we moved quickly to stabilize our economy.
We now stand at an important crossroads. I believe that the NEI is a winner for all sides. The NEI contributed to the success of the past year, but it is not a one-year program. We are just getting started. Our plans for the second year are broad, but we are very specific about expressed goals.
At ITA we plan to build on our successes from 2010. In 2011, we will continue to strengthen the delivery of our services through expanding our public-private partnerships and continuing to enhance our use of technology. Last year, we significantly upgraded trade.gov and export.gov, and I urge you to promote them among your membership and your own Web site.
None of us can know that the next big success story will not come from a young freshman at UTSA who surfs your Web site and makes a connection with our Web site. In today’s world, the global marketplace extends to and from Bexar County (Bear).
To engender that kind of entrepreneurial environment, we are looking to expand our partnerships with state and local governments and are in discussions with State International Development Organizations and other partners such as chambers of commerce throughout the country on how to best leverage these partnerships.
Next month, we will report to Congress as we do annually on the National Export Strategy that we will distribute nationally so that businesses and local communities can see how exports affect their local economies. The NES will provide more detail on some of the plans I have mentioned.
San Antonio is very much a model for how cities and states should proceed, and I’d like to recognize the City for its ability to collaborate almost seamlessly among partners. From the redevelopment efforts surrounding past base closures to the mayor’s current economic development efforts to attract foreign direct investment, San Antonio leads the way.
And in my visit there last year, I learned about the San Antonio Export Leaders Program, in which I know many of you are actively involved. Helping local companies learn how to export and move to new markets is essential to the future of San Antonio, Texas and the country.
I encourage you to keep up these efforts to strengthen the export promotion pipeline. The decision to export is one fundamentally made by the owner of a small business like Stanbio, which makes diagnostic test kits. I presented them with an Export Achievement Award last year, and I am pleased to report that they continue to grow their export business.
My visit to San Antonio and a similar one to Detroit, and it inspired an internal effort within ITA to examine how we can work more closely with border communities. I do not have to tell this group about the importance of trade with our neighbors. I think we would all agree that it is simply good business to increase the export potential and opportunities for U.S. companies doing business along the shared Canadian and Mexican borders.
I am glad that many of you work closely with Daniel Rodriguez and Mike Rosales at our U.S. Export Assistance Center. We look forward to continuing our partnership with the Chamber and the City. ITA is committed to serve as a full partner with communities across the nation as they seek to incorporate and strengthen their strategic business plans with their eyes on new markets.
I know you have a full legislative agenda during your meetings here. Some of those are within the purview of ITA, most are not. But on the overarching mission of the San Antonio chamber of promoting commerce, business and trade, we are all in sync.
More is around the corner than just spring. There are many good days ahead if we keep our eye focused on how we expand and grow trade. And I will be there with you every step of the way.
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