Under Secretary of Commerce For International Trade Francisco SÁnchez
American Chamber of Commerce in Shanghai
Friday, September 21, 2012
As prepared for delivery
Thank you, Ken (Jarrett), for that kind introduction.
And, my thanks to AmCham Shanghai for its work to help American businesses succeed in China.
It’s a pleasure to be a part of this dialogue with you, Under Secretary Hormats, and so many other colleagues from government.
And I appreciate this chance to talk about ways the Commerce Department is helping, and will continue to help your efforts.
As Under Secretary for International Trade, I have the privilege of representing the interests of U.S. businesses in the global marketplace.
In my view, this work is more important than ever.
When I was growing up, my family owned a small business in Tampa, Florida.
In those days, the competition was across the street or across town.
Now the competition is across the world because the rules of the game have changed.
And my message to businesses has been this: don’t view this change as an obstacle, view it as an opportunity.
80 percent of the world’s economic growth over the next five years will take place outside our borders, according to the IMF.
We’ve got to help American businesses be a part of this growth.
And of course, one market that’s become increasingly attractive for U.S. businesses is China.
During my time as Under Secretary, I’ve visited China numerous times, including a trip to Beijing roughly ten days ago.
It truly is amazing how our relationship has changed over the years.
Back in 1971 — I remember hearing the big news that the U.S.–China relationship was beginning to warm up.
The Chinese Ping-Pong team invited the American team to play some exhibition matches.
That was considered a big deal back then.
Now, it wouldn’t even make news.
So we’ve come a long way.
China has become our second largest trading partner.
And last year, our exports to China exceeded $100 billion for the first time.
More American businesses are exporting more of their products to China, which is good for jobs and the economy here at home.
These outcomes are aligned with the goals of President Obama’s National Export Initiative.
Launched in 2010, its goal is to double U.S. exports by the end of 2014.
It’s been a great success.
U.S. exports reached a record $2.1 trillion in total value last year, supporting nearly 10 million jobs.
And as we look to the future, we want to keep moving forward by:
- eliminating trade barriers;
- making sure our partners live up to their ends of the deal;
- and ensuring that all businesses have access to opportunity.
This includes small- and medium-sized enterprises, which are critical to our nation’s economy, growth and future.
We’ve got to give them every chance to succeed, and that means helping them export to markets around the world, including China.
At the Department of Commerce, we know that a key to this work is having an open dialogue with the private sector.
That’s why we’ve been proud to work with AmCham Shanghai over the years.
And we’re glad that your recent SME survey put an even brighter spotlight on many of the challenges we’ve long talked about:
- an uncertain regulatory environment;
- market access limitations;
- and cultural challenges.
I’m here to let you know that we’ve heard you loud and clear.
And we’re working to address these challenges in a number of ways.
One way is through our Trade Agreements Compliance Program, which is helping companies overcome foreign government-imposed trade barriers every day.
This program is a one-stop shop for remedying unfair situations in global markets.
When a business reaches out to us — we quickly engage foreign governments to get the barrier removed or mitigated as quickly as possible.
That’s what happened when a small Pennsylvania company came to us with their issue.
They had just won a government contract with the Australian military to provide refrigerated containers.
The company shipped their refrigeration units to China, which is where they were to be mounted on containers.
Then the final products were to be sent to Australia to fulfill the contract.
However, once in China, the containers were held in customs for weeks, for reasons that didn’t seem to make sense.
And, these delays threatened the company’s bottom line and viability going forward.
So the company reached out to us through the Program’s hotline.
And we saw that China was misapplying a certification requirement.
So we reached out to Chinese counterparts and reminded them of their obligations under the World Trade Organization.
Eventually, we obtained a commitment from Chinese authorities to rectify the unfair situation.
And the company from Pennsylvania fulfilled their contract with the Australian military worth about $8 million dollars — a huge deal for a small business, especially one that relies on exports for a majority of its sales.
Our Trade Agreements Compliance Program is doing this work every day.
Our staff stands ready to help all SMEs on issues ranging from tariffs, to customs and excessive fees.
If you need help, go to export.gov and we’ll work together to eliminate unfair barriers.
We’re also working with SMEs to demystify the exporting process.
Unfortunately, there is a misperception out there that exporting is only for the big corporations, and that’s not the case.
In fact, 92 percent of all U.S. exporters to China in 2010 were SMEs.
Like you, we know this number can grow.
That’s why we support training to help firms to both start exporting, or build on their existing efforts.
We also promote participation in major international trade shows and trade missions — like the biotech mission I led to China last year.
And our Commercial Service team staffed in China works tirelessly to link U.S. businesses here with the opportunities over there.
They provide U.S. firms with services like:
- customized market research;
- and single-company promotion to Chinese buyers.
They also have an agreement with the China Council for the Promotion of International Trade. with the goal of helping U.S. businesses export to “second-tier” markets in China, which are traditionally overlooked, but ripe with promise.
As you can see, our talented Commercial Service staff is helping SME’s make the most of opportunities in China
Again, I hope businesses reach out through export.gov to strengthen their presence in the global markets.
And building on this theme of partnership, I want to briefly highlight an important collaboration.
A few days ago, I was proud to sign a Memorandum of Understanding with China’s Ministry of Industry and Information Technology.
Our agreement is focused on the development of small- and medium-sized companies.
Although the effort has only been around for a small period of time, we have a big goal — to improve the business environment for SME’s, the very environment highlighted in your report.
I look forward to working with our Chinese counterparts on this effort.
I’d also love to hear your input, so I can voice your ideas and issues at the table.
And of course, I want to work with you in continued partnership for years to come.
Although the world has changed over the years, the importance of small businesses has not.
Today’s SME’s are:
- full of innovation;
- putting people to work;
- and a key to our nation’s economic future.
We’ve got to give them opportunities to succeed in growing markets like China.
So let’s work together to help SME’s grow, hire and prosper far into the future.
Once again, my thanks to AmCham Shanghai for your leadership and for inviting me to be here today.
Enjoy the rest of your conference.
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