Under Secretary of Commerce For International Trade Francisco SÁnchez
"10th Annual International Soucring, Customs and Logistics Integration Conference"
American Apparel and Footwear Association
Thursday, March 22, 2012
New Orleans, Louisiana
As prepared for delivery
Good morning and thank you.
It’s truly an honor to be a part of this 10th Annual Conference, especially in this great city.
I love New Orleans because of its history, its culture and, of course, its people.
I continue to be amazed by the resiliency and strength of this city as it rebuilds after Hurricane Katrina.
And I’m so happy to be here with friends and partners to talk about expanding opportunities, putting more people to work, enhancing the competitiveness of the U.S. apparel and footwear industry and strengthening the American economy.
Allow me to begin by thanking Maggie Diaz for that generous introduction.
I’d also like to thank Kevin Burke and Steve Lamar for their leadership, and for inviting me to speak today.
Finally, I’d like to thank all those involved with the American Apparel and Footwear Association for the great work you do.
Your impact goes way beyond the racks and shelves of retail stores. You also make significant contributions to the American economy.
Kevin expressed this so well as part of the “We Wear” campaign. He said that: “When Americans get dressed each day, we put on more than clothes and shoes. We wear jobs, our economy, innovation, intellectual property, global markets and much more.”
And he’s right. Your work is making a difference.
As you have noted, U.S. consumers spend $340 billion every year on clothes and shoes. This economic activity benefits businesses and communities.
It also helps to employ millions of Americans. Recently I’ve had the pleasure of learning more about your great work.
For example, last summer, the Department of Commerce helped organize the first-ever “Sourcing in the Americas” forum at the MAGIC Show.
We brought together brands and retailers, and the domestic and Western Hemisphere textile and apparel industries.
By doing so, we were able to highlight the importance of sourcing in the Hemisphere through our trade agreements and trade preference partners.
Another quick example is from earlier this week. I toured Ralph Lauren’s design studios in New York City. They were such gracious hosts. It was fascinating to see all the aspects of design and production up close.
It was also great to meet with brands and retailing executives to talk about issues important to them. Like you, they had a lot on their mind.
They emphasized how important international trade is to their businesses and how increased opportunities would benefit their industry.
I also know that intellectual property theft is another big concern.
So today I want to talk about how the Obama Administration is working at the policy level to reduce the barriers to trade, and what we are doing to protect your intellectual property all over the world.
I’d like to begin by stressing how much I value the work you are doing. As Maggie said, I have the pleasure of serving as the Under Secretary for International Trade.
My job is to help U.S. businesses succeed in markets across the world.
Consider these numbers. 95 percent of the world’s consumers are overseas. And 85 percent of the growth over the next five years will be overseas, according to the IMF.
It’s clear that our nation cannot be competitive if we don’t participate in the international marketplace.
Obviously, exports play a large role in this.
President Obama launched the National Export Initiative in 2010, with the goal of doubling U.S. exports by the end of 2014.
This month marks its two-year anniversary and great things are happening.
The Department of Commerce recently reported that U.S. exports supported 9.7 million American jobs in 2011. Your industries have been a big part of this success.
The U.S. apparel and footwear industries export to more than 200 countries. And between 2010 and 2011, U.S. apparel and footwear exports grew to $5.7 billion, an increase of 14 percent.
So the story of international trade in recent years has been full of successes. But exports aren’t the whole story. As you have demonstrated, imports also help sustain jobs.
Good things happen when packages of your products arrive from overseas into domestic stores. Those products are unpacked and put on sale. And when consumers purchase them, it benefits the American workers:
- who design your clothes and shoes;
- who handle production;
- who transport and distribute the merchandise;
- who market the products;
- who work in the stores and so many more.
So I thank you for your work. And I appreciate your support of the NEI.
I know that you wish that it also included U.S. companies that produce their goods overseas. However, I think we can all agree that an increased focus on trade that benefits the American economy — in whatever form — is good for businesses and people.
In fact, I dare say that it works miracles. Let’s go back to last fall.
That’s when a miracle took place in Washington, DC. Democrats and Republicans actually came together to pass important legislation.
What sparked this miracle? The trade agreements with Korea, Panama and Colombia.
There is a clear recognition that increasing opportunities to export benefits jobs and the economy — and by extension that these trade agreements are good for America.
For example, the U.S. – Korea Trade Agreement recently took effect. As a result, U.S. businesses have more opportunities to sell their products in the 12th largest economy in the world.
Just last week, in a variety of sectors, U.S. companies had to pay a tariff rate to sell their goods and services in Korea.
Today, many of these same companies can enter the market duty-free. Almost 80 percent of American exports of industrial products to Korea will be able to enter without getting taxed.
The costs of doing business will drop. The potential for profits will grow. Opportunities for U.S. businesses to succeed in Korea will expand.
This is estimated to support tens of thousands of additional American jobs. It will also increase U.S. goods exports to South Korea by as much as $11 billion.
I don’t have to tell you what kind of impact it will have for companies like yours.
Ninety-eight percent of Korea’s tariff lines, accounting for approximately 73 percent of U.S. textile and apparel exports to Korea by value, receive duty-free treatment immediately.
And virtually all footwear exports to Korea are duty free immediately as well.
I know the agreements with Panama and Colombia will also have positive benefits for the American economy when they take effect.
And we’ll continue to use policy as a tool to help American businesses. One example is the Trans-Pacific Partnership.
I know that AAFA was recently a participant in the 11th round of TPP negotiation talks in Australia.
As all of you know, the TPP is a 21st century agreement that will enhance trade and investment among the nine participating countries. After many talks, significant progress was made late last year.
Five central features were identified. Nations around the world are already viewing this framework as a new standard for trade agreements.
For today, I’ll call it the five “E’s”:
- 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.
So significant progress has been made. And we seek to finalize an agreement in the coming year.
This is obviously good news for you. That’s because the agreement will provide additional sourcing opportunities for you. However, I know you also have some concerns with provisions like the “yarn forward” rule. And while you may not agree with the Administration’s position, I’m here to listen to your input.
We want to continue working with you to identify particular flexibilities in the agreement on inputs not available in the TPP region. So your continued work with us is very important going forward.
I also want to let you know that I hear you when it comes to other issues like India’s recent export ban on cotton and the tariff and non-tariff barriers in Brazil, Argentina, and Turkey.
We are working on these issues with our colleagues at the United States Office of the Trade Representative.
If given a level playing-field, American businesses will be able to compete all day and every day.
But the reality is that the field isn’t always level.
As the President said recently: “We will always try to work our differences through with other countries. We prefer dialogue. But when practices are unfair, we’ll always take action.”
As part of this effort, President Obama recently launched the Interagency Trade Enforcement Center.
It’s a “whole-government” approach to getting tough on trade enforcement.
We’re going to monitor and enforce U.S. rights under international and domestic trade rules that tilt the global market against U.S. firms.
Beyond this effort, the Commerce Department is committed to fighting for you in other ways .
For example, one thing that makes your companies so successful are the ingenuity and ideas that your produce.
They are special. They are rare commodities. And we want you to know we have your back.
We will do whatever we can to protect your intellectual property rights.
One effort we just unveiled is a new and improved website called stopfakes.gov.
It’s a one-stop shop for businesses — large and small — to go to if they are the subjects to IPR theft. If you are having issues, go to the website. Reach out to us. And we’ll get to work right away.
We do all this because, as I said before, we know your impact goes beyond the racks and shelves.
We at the Department of Commerce want to give you every opportunity to succeed.
We’ll do this by:
- ensuring that your interests are protected in the international marketplace;
- eliminating the barriers that prevent you from reaching your full potential;
- and engaging you on issues in which we share common interests and common goals.
Looking ahead, there are a number of great opportunities.
For example, I’m pleased to hear that there are demands by major brands and retailers for products that are “Made in America.” Some are hosting open houses at their corporate headquarters. And others are sending sourcing executives to visit U.S. factories.
In fact, I understand that New Balance is now employing more people than ever in the U.S. making shoes.
This is obviously good news. Momentum for this is building. In fact at the MAGIC Show this summer, I understand that there will be a focus on “Made in the Americas” based on the demands of brands and retailers.
We want to partner with you on getting the word out about the importance of “Made in the USA.”
And we want to partner with you on a host of other issues that will
- maximize your opportunities;
- minimize your headaches;
- and sharpen this industry’s competitive edge.
I look forward to this work.
And I appreciate this opportunity to talk with you this morning.
I want to thank all of you with the American Apparel and Footwear Association for inviting me to be here today.
Enjoy the rest of your conference.
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