Under Secretary of Commerce For International Trade Francisco SÁnchez
“From Colombia to Korea: Opening New Doors of Opportunity in Global Trade”
University of Miami
Center for Hemispeheric Policy
Thursday, November 17, 2011
As prepared for delivery
Good afternoon and thank you all for that warm welcome.
I want to thank Dr. Purcell for those kind words … and for her distinguished leadership of the Center for Hemispheric Policy.
Allow me to also thank the entire Miami University family — including all the organizations supporting this event.
It’s always great to be back in my home state of Florida.
I appreciate the opportunity to join you today.
And, I thank you for having me — just a few days after my alma mater — Florida State University — beat the Hurricanes on the football field.
Obviously, this fills me with great pride.
However — out of respect — I promise not to dwell on our victory.
Instead, I’ll take another approach — one that’s captured by a Thomas Jefferson quote inscribed on the facade of the Commerce Department.
It says to “cultivate peace and commerce with all.”
So — in the spirit of peace — I won’t gloat about Florida State’s dominance in football.
Instead, I’m going to focus on cultivating commerce through partnerships with all of you.
And, I’m looking forward to our conversation today.
Nearly two years ago, President Obama stood before a joint session of Congress to deliver his State of the Union Address.
In no uncertain terms — he called on the nation to “seek new markets, just as our competitors are.”
“If America sits on the sidelines” — he continued — “we will lose the chance to create jobs on our shores.”
With those words — the National Export Initiative was launched — an effort to double U.S. exports by the end of 2014.
In my role as Under Secretary of International Trade, the NEI has become a big part of my job.
And, I can assure you that it’s more than a slogan.
In practice, it’s the first Presidential-led — government-wide — export promotion strategy.
We’ve worked towards our goals in a number of ways.
This includes advocacy … increasing access to credit … and the elimination of trade barriers.
And, we’ve had great success.
Exports were up 17 percent in 2010 … and supported 9.2 million jobs.
And — in the larger picture — the NEI sends a clear signal to the world that the United States is eager to strengthen our international commercial relationships.
That we are committed to keeping America competitive … and a leader in the global economy.
That we are in constant search for new doors of opportunity.
And, when we find these doors — we are doing all we can to open them so that new partnerships can begin.
It’s this work to open new doors that led us to a recent historic breakthrough.
Roughly one month ago — something extraordinary happened.
Something people said couldn’t be done.
Something they said wasn’t possible in this day and age.
President Obama sent a group of measures to Capitol Hill for consideration.
And — remarkably — Congress came together — in a bi-partisan manner — to pass them.
I repeat — Congress came together — in a bi-partisan manner — and supported the President’s proposed measures.
And, what exactly was the issue that brought all these different parties together?
Specifically, trade agreements with Korea … Colombia … and Panama.
When implemented — they will support tens of thousands of American jobs.
And help provide a level playing field in three significant international markets for U.S. firms.
So, why did bipartisanship emerge with this issue?
There was a clear recognition in Washington that these trade agreements increase opportunities for U.S. businesses and workers.
People see and know that exports impact sales.
Exports impact growth.
And, exports impact jobs for the American people.
So I commend Congress for putting progress before politics.
And, I want to give special recognition to President Obama.
He deserves a lot of credit for negotiating the best deal possible for the American people.
He worked tirelessly to get this done.
He also fought for the renewal of the Trade Adjustment Assistance program.
This helps retrain those who’ve been negatively affected by trade.
And — because of the President’s leadership — communities across the country are going to have new opportunities available to them.
Take this area, for example.
South Florida’s economy is heavily dependent on international trade.
In 2008, nearly 40,000 companies exported goods from Florida locations.
96 percent of these businesses were small and medium-sized enterprises.
Yet, there is potential to do so much more.
And, trade agreements will help achieve this potential.
Just look at history.
Let’s take the U.S.-Korea Trade Agreement, also known as KORUS.
A decade ago — the United States was the top exporter to Korea.
Now, we’re in third place.
That’s due — in large part — to new competition from China and other countries.
But, it’s also the result of the 6.2 percent average tariff that U.S. exporters to the country have had to pay.
That amounts to $1.3 billion a year for industrial goods.
On the other hand — Korean exporters to the United States only face an average 2.8 percent tariff.
Clearly, it’s not a level playing field.
KORUS will help make it fair by eliminating tariffs for more than 95 percent of U.S. exports within five years.
And — with the removal of these tariffs — the potential for U.S. companies to do business will grow because their goods and services will be more affordable.
In total — in the U.S. — the removal of barriers is expected to increase U.S. goods exports to Korea by roughly $11 billion.
And, it will support more than 70,000 quality American jobs.
Growth and jobs — that sounds like a good deal to me.
And, the other agreements will have a positive impact as well.
Colombia is the third largest economy in South America.
The trade agreement will provide significant new access to a $166 billion services market.
And, Panama is one of the fastest growing economies in Latin America — with annual growth above 5 percent expected through 2015.
The agreement helps U.S. businesses become a part of this growth.
The bottom line is that trade agreements are good for businesses and good for jobs.
That’s why we’re focused on next steps.
The trade agreements have been approved and signed — and are moving toward implementation.
The length of time this process takes varies.
The Office of the United States Trade Representative has already started to bring these agreements into force.
We are now watching as Korea’s legislature considers and votes on the agreement.
The legislatures of Colombia and Panama have already ratified their respective agreements.
And — before the agreement can enter into force — each country must demonstrate that it’s in compliance with the obligations that will take effect on the first day.
So, we are monitoring the situation.
But, it’s important to remember that once the agreements are implemented — our job isn’t done.
It’s just as important to ensure that businesses — especially small- to medium-sized firms — can take advantage of these new opportunities.
That’s why I — and the talented staff at the International Trade Administration — always appreciate the chance to raise awareness … and help companies seize the opportunities.
We want to demystify the process.
There is a lot of fear and anxiety among U.S. businesses when talking about the foreign markets.
There shouldn’t be.
Trade is good for American businesses.
And, products stamped with the words — “Made in America” — are still in demand across the globe.
And, we want to help businesses meet this demand.
I just came back from the Asia Pacific Economic Cooperation summit in Honolulu.
The Asia-Pacific region now:
- represents a market of 2.7 billion consumers …
- accounts for 44 percent of world trade …
- and represents 55 percent of global economic output.
Six of America’s 10 largest trading partners are in APEC.
America has been proud to host APEC this year.
And our goal has been to create a seamless regional economy.
And, there has been tremendous progress thanks to this collective effort.
My hope is that the Western Hemisphere comes together in a similar manner.
Our geography … mutual interests … and common values makes it a natural partnership.
We’re proud to have more Free Trade Agreements in the Western Hemisphere than anywhere else in the world.
Approximately 40% of all U.S. exports go to the Western Hemisphere.
However, there is potential to do so much more.
We need to be encouraging consistent collaboration between the private sector … academia … and government.
We need to be standardizing regulations.
We need to be supporting entrepreneurship in every way possible
Until we do, we are all leaving money on the table.
A full commitment to economic integration and competitiveness is essential.
That’s what makes next year’s Summit of the Americas event in Colombia a valuable opportunity.
The Summit represents the largest gathering of Heads of State and governments across the hemisphere.
They’ll gather to discuss common policy issues and shared commitments to enhance the competitiveness in the Americas.
And, we want to use the Summit to build on the work that we’re already doing to help U.S. businesses succeed in the region.
For example, take the Continental Manufacturing Company in Houston.
We let its leadership know that their construction equipment would enjoy duty-free status in Chile because of the FTA.
As a result, in 2010, it exported 30 mixers to the region — and that number is poised to triple this year.
These are great results for a small- to medium-sized business.
Here in Florida, there is a company called Bronz-Glow Technologies — a family-owned business that protects equipment from corrosion.
With our help — its sales have increased 5 percent since our trade promotion agreement was implemented with Peru.
Again, that’s a significant increase during these challenging times.
In addition, we’re also encouraging U.S. firms to seize opportunities in global supply chains.
If a small or medium-sized business has the best quality product at the best price — then they should get in on this action.
Let me give some quick examples to illustrate the potential.
In the United States, the textile industry employs nearly 600,000 people, with shipments of more than $50 billion a year.
And, the Americas are the largest market for U.S. textile and apparel.
In aerospace, the launch of new projects — such as Bombardier’s C Series jetliner — can create new opportunities for U.S. firms to participate in a supply chain worth billions of dollars.
In this case, the supply chain starts in Canada … goes through the United States … and ends up in Mexico — creating opportunities for companies along the way.
And, in the auto industry, there is plenty of potential.
For example — to make GM cars — some auto parts cross the border as much as seven times before final assembly.
The bottom line — behind so many of the great products we see on the shelves is a supply chain of parts from around the world.
And, to ensure that they are as competitive as possible — the Americas have to work together.
Global trade doesn’t have to be a zero-sum game.
The United States doesn’t have to lose so other countries can win — and vice versa.
That’s why we are committed to working with partners here — and across the Hemisphere — to create and strengthen mutually beneficial partnerships.
As President Obama has said — we can’t wait for these problems to solve themselves or for others to take action.
He is currently advocating for his American Jobs Act — which economists say will create nearly 2 million jobs.
While Congress stalls, the President has taken a series of actions to get our economy moving — from cutting waste — to lowering student loan payments.
As part of this work, I am committed to strengthening our commercial diplomacy in order to:
- remove trade barriers …
- increase exports …
- and open new doors of opportunity.
I look forward to working with many of you to:
- sharpen our competitive edge …
- generate growth for U.S. businesses …
- and support jobs for the American people.
Once again, my thanks to the Center for Hemispheric Policy — and all of its partners — for this chance to join you today.
It’s an honor.
Now, I’d be happy to take any questions.
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