Assistant Secretary of Commerce Nicole Y. Lamb-Hale
Manufacturing and Services
Advisory Committee on Supply Chain Competitiveness
Tuesday, March 12, 2013
As prepared for delivery
I want to thank you once again for your work to improve the competitiveness of America’s supply chains, both domestically and internationally.
As you heard from Under Secretary Sánchez, this advisory committee is helping us respond to urgent business issues that affect all of you directly but also affect the entire U.S. economy. Your advice impacts and correlates with our work across a broad range of trade and investment issues that face us today.
For example, with respect to trade,
The recommendations of this Committee will be considered in developing U.S. positions in trade talks such as the TransPacific Partnership, the WTO Trade Facilitation Agreement, the International Services Agreement, and the U.S.-EU Transatlantic Trade and Investment Partnership. Those negotiations aim to produce state-of-the-art agreements that will liberalize trade across a wide range of services.
In each of these agreements, supply chain issues figure prominently. Your advice here will provide new insights into what we need to seek in the talks and in domestic policy to compete at our best.
And beyond the negotiations there is implementation – robust supply chains are critical for our economic recovery and will benefit U.S. manufacturers seeking to export their goods and make use of the provisions of recent trade agreements, such as the FTA with South Korea and the recently adopted agreements with Colombia and Panama, which provided major new areas of market access across a broad range of products and services. Moreover, improved supply chains also enhance the trade flows that have resulted from the many predecessor agreements the United States has concluded with Singapore, Chile, and the CAFTA countries of Central America and the Caribbean. With market access comes the need to ensure efficient means to deliver goods and services.
With respect to investment, a competitive supply chain is also essential to the United States both as a major investor overseas and as a leading destination for foreign direct investment. Those investing companies want to know they can rely on the timely receipt of inputs and the efficient movement of goods.
Reliable and efficient supply chains, based on strong and modern infrastructure and effective policy to improve freight movement, increase the attractiveness of the United States as a place to do business. This translates immediately into decisions about where to invest and build factories, where to hire, and how well U.S. firms can meet international pricing challenges.
Supply chain and economic growth
The importance of the supply chain in economic growth was quantified by a recent study conducted by the World Bank and Bain & Company. The report, “Enabling Trade: Valuing Growth Opportunities,” estimated that efforts to reduce problems in border administration as well as transportation and telecommunications infrastructure – that is, trade facilitation – could increase global GDP up to six times more than the value of total tariff elimination.
The report also predicted that if all countries reduced their supply chain barriers towards meeting global best practices, global GDP could increase by 4.7% and world trade by 14.5%.
That’s pretty impressive and that’s one of the reasons we consider your input so very important as we work to build international capacity and negotiate future trade facilitation elements.
Programs to expand trade and investment
Addressing the conditions that impede our competitiveness – both in infrastructure and policy terms – is crucial to our efforts to expand American trade, support millions of jobs, and promote the growth of our economy.
This improved performance is central to realizing the benefits of our recent growth in trade. Through the President’s National Export Initiative, existing and new exporters are finding new ways to enter foreign markets and expand their sales abroad.
The simple fact is that if we achieve our goals of expanding our trade flows, we need the systems and infrastructure to carry the increased traffic. Our continued collaboration with the Department of Transportation highlights our focus on bringing all resources to bear on an all of government approach to improving trade performance.
Investment and SelectUSA
Another tool at our disposal is our new SelectUSA program, to spur new investment in U.S. facilities and companies – and create more jobs for American workers.
But we cannot fully succeed in these efforts – and America’s supply chains cannot take full advantage of these emerging opportunities, at home and abroad – if we do not also act to remove the freight infrastructure and other policy impediments that slow the flow of America’s trade and commerce.
It is a central fact of modern, advanced manufacturing that the quality and reliability of the Nation’s supply chain, and the quality of the underlying infrastructure, determine in part where companies invest and hire, where they chose to do business. Supply chains affect company financials and the firms’ ability to meet global pricing. Our ability to attract inward FDI depends on finding solutions to the issues that you are considering.
National Freight Strategy
We also face the near-term challenge, through the MAP-21 programs being implemented right now, of contributing supply chain perspectives towards the creation of a national freight policy and strategy that takes into account the international trade and competitiveness issues important to the economy.
This freight policy – its national strategy and priorities and the choice and definition of performance measures – is part of the efforts here and abroad to see and treat all of these systems as integrated systems of systems, rather than silos organized around particular modes of transportation or industrial sectors with little thought for global strategic competitiveness.
We need to remind ourselves that every major trading country in the world is pursuing these issues in a strategic way. We must pay close attention to how our trade competitors are addressing these issues. The efforts of Germany and the EU, Canada, and China to strategically improve these policies to boost their competitiveness should spur our own strategic thinking on these issues.
As you continue developing your work plans for the year, please keep in mind that the Secretary is looking for your best ideas on how to help America compete– and that we will work closely with our sister Departments and agencies across the federal government to ensure that these ideas are reflected in their policies and programs.
Again, many thanks for your continuing efforts. I look forward to meeting and working with you throughout the coming year.
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