Under Secretary of Commerce For International Trade Francisco SÁnchez
American Chamber of Commerce Hanoi
Wednesday, March 7, 2012
As prepared for delivery
It’s good to be back among so many friends and partners.
I know I saw some of you a few days ago at the Asia-Pacific Council of American Chambers of Commerce in Japan.
And I recognize many of you from last year, when you were kind enough to host a similar luncheon while I was here with our Education Trade Mission.
I thank you for inviting me again so we can keep this conversation going.
At the outset, I want to thank your Chairman, Hank Tomlinson, for all his outstanding work and leadership.
I also want to recognize your Executive Director, Adam Sitkoff, for his service and contributions.
And I want to thank all of you — the members and supporters of the American Chamber of Commerce in Hanoi — for all your work to strengthen the commercial ties between the United States and Vietnam.
When this organization was founded in 1994, there was still a lot of anxiety between our two countries because of the history we share.
As a result, there was too much misunderstanding and too little collaboration. But thanks in large part to your leadership — this story has changed.
The Vietnamese people and the American people have come to realize that we have a lot in common, that we share similar hopes for our children and our futures. And, I’m glad to be here today to talk about ways we can shape this future together.
That’s why I want to focus my remarks on building:
- building new partnerships for progress;
- building American businesses by expanding access to opportunity;
- building a stronger Vietnam infrastructure with the help of U.S. products and services; and
- building stronger bonds of trust here in Vietnam by leveling the playing field and ensuring that all can compete.
Now I know you know a lot about this kind of work. You are making a difference here.
I don’t think it’s a coincidence that the poverty rate in Vietnam dropped from 58 percent in 1993 to just 12 percent in 2009, roughly the time period this AmCham has been existence.
And you’ve also made a great impact back home. You’ve done such great work to help U.S. companies succeed in Vietnam and around Southeast Asia.
This is good news for American businesses, American jobs and growth in the American economy — important work at this moment in history.
As all of you know, President Obama took office in the midst of the worst financial crisis since the Great Depression.
4 million jobs had been lost in the six months before he took office in 2009. Another 4 million disappeared in the first six months of his Presidency — before his policies could be put into place.
We were on the verge of collapse. But President Obama didn’t accept this fate for the country or the global economy. Instead, he has taken bold actions to get us back on track.
These measures include passing tax cuts 17 times for small businesses. They also include supporting the American auto industry, which is now back and getting stronger.
And the good news is that these actions are producing results.
The United States has enjoyed 23 straight months of private sector growth. This growth has translated into 3.7 million new jobs. Across the nation, people are finding new jobs, new opportunities and new hope.
Obviously this is progress that all of us in the Administration are pleased with. But we aren’t content. And we won’t be until every person who wants a job can find one.
In doing this work, we are focused on more than just recovery. Instead, we want to build a stronger economy.
We don’t want to go back to the old days, where growth was fueled by bubbles that can’t sustain.
There is a story in Michael Lewis’ book The Big Short, which is about the financial crisis. The story takes place a few years before the collapse. It’s about one of the main characters, and a moment he knew something was wrong in the market.
It’s when his former nanny told him she and her sister owned six townhouses in New York City. After they bought their first one, its value soared, and lenders suggested they refinance.
They did. They took out $250,000 dollars. And they bought another townhouse. Then its value rose. And they did the same thing, over and over, till they had six homes.
Of course we all know how the story ended — not well.
We don’t want to go back to those days where growth was fueled by actions like this. Instead, the President has put forth a plan for an economy built to last.
It’s built on:
- American manufacturing;
- American energy;
- skills for American workers;
- and a renewal of American values.
And when President Obama unveiled this plan during his recent State of the Union, he put a special emphasis on exporting.
That’s because when U.S. businesses produce their products, we’ve got to make sure they can sell those products. This means accessing markets all over the world. In this 21st century economy, boosting U.S. exports is essential for our long-term competitiveness.
It’s just plain math. If you look at the world outside of the United States, you’ll find:
- 95 percent of the world’s customers;
- 85 percent of the growth over the next 5 years, according to the IMF;
- And, roughly 80 percent of the world’s purchasing power.
It’s just good business for more American companies to be selling more of their goods and providing more of their services in more markets across the globe.
This leads to more sales, more revenue and more jobs. That’s why President Obama launched the National Export Initiative during his 2010 State of the Union address.
As all of you know, the goal of the NEI is to double U.S. exports by the end of 2014.
Recently, we got the final data for 2011. There was a record $2.1 trillion in U.S. exports. And we’re proud to report that we’re on track to achieving the President’s NEI goal.
Our success in Vietnam has been a key part of this progress. In fact, Vietnam is what we consider a “next-tier” market, which basically means that we believe that it’s full of promise.
And we want to turn that promise into mutually beneficial outcomes. Thankfully, we are moving in the right direction.
Since the U.S.-Vietnam BTA took effect, bilateral trade has increased from $1.5 billion in 2001 to nearly $22 billion in 2011.
In particular, U.S. exports to Vietnam grew almost 17% last year to roughly $4.3 billion. That’s nearly quadruple the number in 2006.
So that’s the good news.
The unfortunate news is that we’ve haven’t reached our full potential. There is room to do so much more.
Consider that U.S. exports still only account for about 4% of Vietnam’s 2011 total imports. This isn’t enough, considering our respective economies and our improving relations. In contrast, China’s exports represented nearly a quarter of Vietnam’s imports in 2010.
We can be doing more. We should be doing more. That’s why I want to focus the rest of my talk on two questions:
What are the obstacles we need to eliminate?
What are the opportunities we need to seize?
Let me start with the obstacles.
As we all know, the trade channels between the United States and different areas in this region could be wider and fairer.
After all, none of the American businesses we represent can reach their full potential in the international markets:
- if an unequal playing-field prevents fair trade and competition;
- if trade rules don’t cover emerging technologies like Facebook intermittent blocking, for example;
- and, if regulations are too confusing and complex to understand, such as the licensing process.
That’s what makes the Trans-Pacific Partnership such an important effort. As you know, Vietnam is a key part of this initiative.
TPP is an ambitious, high-standard trade agreement that seeks to address new and emerging trade issues and 21st-century challenges.
Working with our colleagues at the Office of the United States Trade Representative, we have been committed to addressing traditional trade issues involving goods and services, as well as rules on intellectual property and technical barriers to trade. We have also proposed a chapter on state-owned enterprises.
Additionally, we aim to go beyond liberalization achieved in previous U.S. free trade agreements by negotiating new areas that address cross-cutting trade issues and the development of regional production and supply chains.
And, we are making progress. As you all know, a TPP framework was agreed to in Honolulu at the APEC Leaders’ meeting in November.
It was a landmark accomplishment.
The agreement identified five central features that nations around the world are already viewing as a new standard for trade agreements:
- expanding market access by removing all the tariffs and other barriers to trade;
- enacting a fully regional approach to maximize the development of production and supply chains across the region;
- easing the regulatory challenges facing businesses — especially small- and medium-sized concerns — by promoting coherence and removing unnecessary red tape;
- ensuring that new industries — like clean technology and the digital economy — are addressed;
- and, establishing a living agreement that allows us to address developments that arise in the future.
We want all of our trading partners to be innovators, and to experience the growth that results from strong legal systems, robust IP rights and open market economies.
We want to set high standards for our trade agreements and for our trading relationships around the world.
In addition, the International Trade Administration’s advocacy center continues to make the case to governments around the world that U.S. products and services are good for their economic development, and American companies must be given a fair shake.
We will continue to support small- and medium-sized companies, and welcome your suggestion in this effort.
We will continue to fight for access so that we don’t see big projects like the two nuclear power plants go to others without a competitive bidding process.
We will continue to work with senior officials here until your businesses — and other U.S. companies in international markets — get a fair chance success.
We are making some progress.
I know Deputy Prime Minister Ninh visited Commerce Secretary John Bryson last month in Washington. I am encouraged by DPM Ninh’s vision of restructuring State investment, reforming SOEs, and restructuring the financial sector.
If properly implemented, Vietnam’s new policies will create a level playing field for all. And that will benefit both parties.
American-made products and services represent quality and excellence. We know that they serve as assets for global growth.
There are great needs here in Vietnam. U.S. companies have great products.
It’s just plain common sense and business sense to match the supply with the demand.
That’s what I mean by seizing opportunities. For example, as Vietnam prepares for the rest of the 21st century, it’s got some clear infrastructure needs — from water to power to transportation.
American companies can help meet these needs. Both American companies and Vietnam as a whole will benefit.
It’s a win-win. And, that’s always the sign of a great partnership.
And in the end, I know that strengthening commercial ties is a goal that we all share, in both the public and private sectors, and in both the U.S. and Vietnam.
That’s why I look forward to working with all of you and others throughout the country.
Together we can open new doors of opportunity, wide enough for all stakeholders to move ahead.
Together we can ensure that the U.S. – Vietnam relationship is defined by collaboration and cooperation, not misunderstanding or mistrust.
Together we can resolve our differences, eliminate all the obstacles and seize all the opportunities that we have.
In short, together, we can generate new opportunities for U.S. businesses here in Vietnam, help Vietnam achieve its ambitious and admirable development goals, and sharpen America’s competitive edge in the 21st century.
That’s why I look forward to our discussion today. And, I also look forward to our work tomorrow and beyond to build a strong, more prosperous U.S. – Vietnam relationship.
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