Under Secretary of Commerce For International Trade Francisco SÁnchez
Association of American Chambers of Commerce in Latin America
“Business Future of the Americas Conference”
Monday, May 14, 2012
Mexico City, Mexico
As prepared for delivery
Thank you, Jose (Orive) for that kind introduction and for your leadership.
And I want to thank the entire Association of American Chambers of Commerce in Latin America for inviting me to be here.
It gives me the opportunity to say two things.
First, it gives me the chance to say thank you.
When this organization was founded in the 1960’s, it was a time of great unrest in both the United States and Latin America.
And as always, times of crisis require bold leadership.
Well, this Association emerged to provide this leadership with regards to economic issues.
That commitment has extended into recent years, as we’ve all dealt with the aftermath of the financial crisis.
You’ve done great work to strengthen the commercial ties between the United States and Latin America.
In doing so, you’ve are helped:
- American businesses;
- American workers; and
- American families.
So, once again, I thank you.
Secondly, I want to stress what a great pleasure it has been for me, personally, to work with many of you over the years.
The Latin American market has been a passion of mine for a long time.
I’m from Florida, and had the honor of being the first director of its Caribbean Basin Initiative.
I was in the middle of the efforts to make the state a gateway to Latin America.
After that, I went on to work in the private sector, teaching negotiation strategies to clients all over the world, with a special focus on the Latin American market.
Then I went on to work for Buddy MacKay when he was Special Envoy to the Americas during the Clinton Administration.
So like you, I’ve had a long commitment to strengthening the bonds between the U.S. and Latin America.
Like you, I believe that these shared cultural and geographic ties provide a solid foundation for success and future growth.
And like you, we in the Obama Administration are determined to do all we can to realize the full economic promise of this relationship.
President Obama has said that “Latin America is more important to the prosperity and security of the United States than ever before … and it is only going to become more important to the United States, especially to our economy.”
And I can tell you that strengthening the economy is the President’s number one priority.
As all of you know, when the President took office in 2009, American businesses were facing the worst economic climate since the Great Depression.
The financial system was on the verge of collapse.
Small businesses had a hard time getting credit.
Confidence was shaken.
And anxiety was high.
4 million jobs were lost in the six months before the President was sworn-in.
In total — 8 million jobs were lost during the recession.
But the good news is that, under President’s bold leadership, we’ve come a long way since those days.
The auto industry is thriving.
General Motors is back on top.
The U.S. manufacturing sector is the strongest it’s been since the 1990’s.
And the U.S. has experienced 26 straight months of private sector growth, resulting in more than 4.2 million new jobs.
So progress is being made.
But we aren’t content.
There is still a long way to go.
And, as we look at completing the economic recovery, one thing is clear, we can’t go back to the same policies that created this mess.
We can’t rebuild our economy on the same kind of bubbles that we all know will eventually burst.
Instead, as the President has said, we need to create an economy built to last.
It’s an economy that utilizes America’s best assets: it’s people and their imagination; their ideas and talents; and their dedication and work ethic.
It’s because of these attributes that American-made products represent quality, excellence and value.
And to shape an economy built to last, we’ve got to ensure that U.S. businesses can sell these products in as many markets as possible, especially if America is going to remain competitive in the 21st century.
The numbers tell the story.
95 percent of the world’s consumers reside beyond our shores.
Ignoring them would be like opening up a retail store, and deciding to market to only 5 out of every 100 people who walk by.
It just wouldn’t make business sense.
Some additional facts:
- according to the IMF, 85 percent of the world’s growth over the next five years will take place outside the United States;
- and roughly 80 percent of the world’s purchasing power is also outside the U.S.;
Furthermore, studies show that exports strengthen businesses.
From 2005-2009 — U.S. small- and medium-sized manufacturers that exported experienced revenue growth of nearly 40 percent.
Those that didn’t export saw revenue decline 7 percent.
So the benefits of exporting are clear:
- more customers;
- more exposure to growth markets;
- more access to purchasing power;
- and healthier businesses.
And as you know, exporting doesn’t just impact bottom lines.
Every time an American-made product is sold in Latin America, people back home benefit.
Not just the business owner, but also the American worker who makes or ships the goods.
That then benefits:
- their local neighborhood businesses;
- their communities;
- their children;
- and more.
Recognizing the incredible benefits that exporting has on the American economy, President Obama launched the National Export Initiative in 2010.
The goal is to double U.S. exports by the end of 2014.
And we’ve had tremendous results.
The most recent trade numbers came out a few days ago.
They showed that over the past 12 months:
- U.S. exports have reached historic highs;
- and represent an increase of nearly 36% over the level of exports in 2009.
In 2011, U.S. exports reached $2.1 trillion in total value — an all-time record.
And, these exports are making an impact.
They supported nearly 10 million American jobs.
And the areas you are engaged in have been a key part of this growth.
Exports to the Western Hemisphere have increased 46 percent since 2009.
The Western Hemisphere is the destination for approximately 42 percent of U.S. exports — more than any other region across the globe.
We in the Administration want to see this upward trend continue.
As President Obama has said: “Latin America is a part of the world where the economy is growing very quickly. And as these markets grow, so does their demand for goods and services. The question is, where are those goods and services going to come from? We need to make sure these products are made in America. “
So the question is: how?
The most obvious way is through trade promotion.
Today, I am leading a healthcare technology trade mission of 17 U.S. companies.
Mexico is one of the world’s largest and fastest-growing medical technology markets.
It has an emerging IT healthcare sector.
And putting U.S. firms directly in touch with these opportunities will go a long way in making sales and marketing products.
But promotion alone isn’t enough.
We are also making progress through engagement.
The United States is engaged with Latin American countries on a number of fronts, including:
- participating with Brazil in a commercial dialogue and CEO forum to strengthen our $74 billion dollar trading relationship;
- working with Mexico to enhance regulatory cooperation and improve efficiency;
- partnering with several governments in Latin America to improve customs procedures; and
- looking ahead, ensuring that U.S. companies make the most of the trade agreements with Colombia and Panama.
Through this engagement, we have — and will continue to — make significant strides in creating new opportunities for U.S. businesses.
And, when these businesses pursue these opportunities abroad, we want to ensure that they are playing on level playing field.
As I said before, American-made products are the best in the world.
They’ll succeed in any market, as long as the conditions are always fair.
But, as we all know, they aren’t.
That’s why the Administration has been working to reduce the barriers to trade and investment through trade agreements.
The United States has 4 free trade agreements representing 10 countries in the Western Hemisphere.
And that number is about to grow.
At the recent Summit of the Americas, President Obama announced that the Colombia trade agreement will take effect May 15th, in other words, tomorrow.
As a result, American businesses will have new access to the third largest economy in South America.
80 percent of U.S. exports of consumer and industrial products to Colombia will become duty-free.
We are talking about a wide-range of products, from construction equipment to fertilizer.
And this circle of opportunity will expand even more when the Panama trade agreement takes effect, once current negotiations are finalized.
So good things are happening, but I want to be clear about one thing.
We know that our work is not done once a trade agreement takes effect.
That’s why we’ll continue to aggressively:
- monitor these trade agreements;
- and ensure that these agreements work for American exporters.
We’ll also continue our efforts to make it easier to do business here in Latin America.
Only six Latin American countries placed in the top half in the World Economic Forum’s Competitiveness Survey.
Five ranked in the bottom quarter.
Across this region, there is a clear need to:
- strengthen and enforce laws;
- protect property rights; and
- enhance transparency and openness in government.
And in our bilateral meetings, we continue to urge government leaders from the area to take action on these issues, which will:
- increase the confidence of doing business here; and
- attract more foreign investment, fueling healthy economic development while generating benefits for all parties.
But we also know that change can’t just come from government.
It also has to occur in the workforce.
There is increasing demand in the Western Hemisphere for workers who are proficient in:
- engineering; and
But our private sector partners tell us there aren’t enough skilled workers to meet this demand.
They tell us that the schools in Latin America are falling short in producing students that can:
- produce; and
- innovate in the workplace.
And that causes a lot of problems.
So recently, we convened a meeting at Georgetown University with leaders ranging from the academic world to the corporate world.
Over the day, we began to address these issues.
And we’ll continue to work together because in order for the partnership between the U.S. and Latin America to thrive in the 21st century, we’ve got to ensure workers here are equipped with 21st century skills.
We want to pave a path to prosperity wide enough for everyone to get ahead.
We want to give businesses every chance to succeed.
As I’ve just outlined — we’re doing this:
- through promotion;
- through engagement;
- through policy;
- through proactive government reform;
- and by educating workers.
One final approach I want to highlight is partnership.
Recently, President Obama announced the launch of the Small Business Network of the Americas.
Basically, we want to give small- and medium-sized concerns the same opportunities to succeed in the Western Hemisphere as the big corporations.
To do this, this effort connects the more than 2,000 small businesses development centers here in the U.S. with similar SME support centers throughout the hemisphere.
Working in concert, they will offer important tools ranging from:
- market analysis;
- to advice about navigating through regulatory red tape.
It will have a tremendous impact.
And today, we are continuing this theme of partnership.
After my remarks, on behalf of the Department of Commerce, I will be formalizing a partnership with member chambers of this organization to participate in our Global Buyers Initiative.
We launched this initiative last November with FedEx.
The company identifies potential buyers of U.S. goods and services, and then refers them to our commercial posts overseas.
From there, our staff works to connect these buyers with American companies who can meet their needs.
The pilot program has been a success so we are expanding it, which is why we are signing this agreement.
Working together, we can make a real difference for U.S. businesses and the American economy as a whole.
And, I’m looking forward to the ceremony later today.
I’m also looking forward to working with all of you for years to come.
There is a Mexican proverb that goes: “Tell me who your friends are and I'll tell you who you are.”
Well, as I said before, my passion has long been strengthening the economic bonds between the United States and Latin America.
I know that you share this same passion.
That’s why I’m sure we’ll continue to come together as friends and partners to increase U.S. exports in order to benefit:
- American companies;
- American workers;
- American families;
- and the economic development here in Latin America.
I mentioned earlier that this organization was formed in the 1960’s — a time of great uncertainty.
Right now, we are in another time full of big challenges.
Meeting these challenges requires the big ideas and bold leadership that you offer.
And I look forward to working with all of you to fulfill the great promise of the U.S. – Latin America relationship.
Thank you very much.
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