Under Secretary of Commerce For International Trade Francisco SÁnchez
U.S. Commercial Service
Trade Winds Asia Luncheon
Monday, May 13, 2013
Seoul, South Korea
As prepared for delivery
Thank you very much, Jim (Sullivan), for that kind introduction and for all your work to link U.S. businesses to opportunities here in South Korea.
Of course, I want to extend this thanks to the entire team at the Department of Commerce. Every day, they are doing great work on behalf of American businesses and workers. And they’ve done an outstanding job of organizing this business development forum.
And of course, I want to thank all of you who are participating in Trade Winds Asia. As I said at this morning’s opening session, you are a part of history. This is the largest U.S. trade mission ever made to South Korea.
Clearly, this is a signal that there are tremendous opportunities for American firms to compete and succeed here. And in the larger picture, our presence here reflects the importance of the commercial relationship between the United States and the Asia-Pacific region in the 21st century economy.
That’s because we are coming together at a unique moment in history. We are living in an increasingly connected world. Because of technology, the competition is no longer across town — it’s across the globe.
Case in point is a study that eBay did of its users. It found that in 2011, the Asian businesses that used the site – many of which were small businesses – shipped 140 million parcels to the U.S, the UK and Australia. 140 million!
In other words, with a few clicks of some buttons, an American consumer has a range of buying options, from Houston to Hong Kong. So as consumers go global, it’s critical that American businesses go global as well.
That’s why, throughout my tenure as Under Secretary for International Trade, I’ve been encouraging entrepreneurs and executives to look further. Look further than just the customers in their neighborhood. Look further than just the possibilities in their region. In short, look further by reaching out to the 95 percent of the world’s consumers that live outside our borders.
By reaching more consumers, a business can increase sales, hire workers and expand operations. And that’s good for the American economy. Recognizing the important role that exports play in enhancing America’s growth and competitiveness, President Obama launched the National Export Initiative in 2010 with the goal of expanding U.S. exports and supporting an additional two million jobs by the end of 2014.
Three years in, we are having great success. Last year, U.S. exports reached a record $2.2 trillion dollars. This growth was widespread with 29 states experiencing record exports.
And for the nation as a whole — jobs supported by exports grew by 1.3 million between 2009 and 2012, more than 60 percent toward the NEI’s jobs goal. The bottom line is this: the world wants what America makes. And U.S. businesses are winning with exports.
As we look forward, it’s clear that a key to our future success is helping firms explore all the opportunities in the Asia-Pacific region. As you all know, it’s a dynamic market that’s transforming rapidly.
Income levels are rising. Hundreds of millions of people have made the transition from living in poverty to the middle class. And U.S. businesses have played — and must continue to play a part in this growth.
To help make this happen, President Obama has initiated unprecedented high-level engagement throughout the Asia-Pacific. As part of his trade team, I’ve traveled more to this region than any other during my time Under Secretary.
And we are doing all this because, as the President Obama has said, the Asia Pacific is:
- where the United States engages in much of our trade and our commerce;
- where our businesses invest and where we attract investment to our shores; and
- where we buy and sell many of our goods and services — work that supports millions of jobs for our people.
And through these economic partnerships, we are making an impact on both sides of the ocean:
- helping people find work and opportunity;
- building stronger firms; and
- fueling economic development.
That’s why we are committed to deepening engagement with the region. And all of us here today are on the frontlines of this effort. All of you represent dozens of U.S. companies that are offering quality goods and services in a variety of fields.
We have a real opportunity to work together and get these products to buyers in thriving markets like South Korea. South Korea is a great success story.
As President Obama said earlier this week when hosting President Park at the White House, South Korea has had extraordinary progress over these six decades, “from a recipient of foreign aid to a donor that now helps other nations develop; from the ashes of war, to one of the world’s largest economies.” And I couldn’t agree more.
That is why I’m so glad that we have strengthened our partnership with an historic agreement.
As all of you know, a little more than a year ago, the United States – Korea Free Trade Agreement took effect.
And I’m happy to report that it’s living up to its promise of creating opportunities and providing benefits for American businesses and workers. Last year, we saw considerable gains in U.S. exports to South Korea.
Private sector services grew nearly 9 percent to $18 billion. Transportation equipment exports jumped 24 percent. Passenger vehicle exports grew 48 percent. Orange juice exports to Korea rose an incredible 130 percent.
I could go on and on, but the point is clear: progress is happening in a wide-range of industries. And we’re committed to continuing this progress by ensuring that the entire agreement is implemented. Doing so will open even more doors to opportunity. By 2016, over 95 percent of Korean tariffs on exports of U.S. industrial and consumer goods to Korea will have been eliminated.
Estimates are that when fully implemented, the Trade Agreement will increase U.S. goods exports by $10 billion and support tens of thousands more American jobs. So my message to American business has been simply this: be a part of this growth.
Be a part of the growth here in Korea, where there is a great need for quality products in sectors ranging from medical equipment to defense. Be a part of the growth in Japan, where there are needs from transportation to energy. Be a part of this growth in Hong Kong, where there is tremendous demand in areas like financial services and environmental technologies.
In short, be a part of the U.S. economic engagement with the Asia-Pacific region. My team at the International Trade Administration — comprised of staff located in more than 100 U.S. cities and 70 countries — stands ready to help businesses.
We are out there promoting exporting, providing trade counseling, identifying potential buyers and organizing export promotion events. And we’ll help you every step of the way.
In some cases, this simply means breaking into a new market. In other cases, it means coming to the aid of a company that is encountering a government-imposed market access barrier when trying to operate overseas. In these instances, our Trade Agreements Compliance program gets to work.
When companies come to us, our experts work to address the trade barriers in areas ranging from intellectual property rights to licensing. We do it free of charge. And we’re making a huge impact.
Since the launch of the NEI, our Trade Agreements Compliance program has initiated more than 700 market access and compliance cases in more than 100 countries. We’ve successfully removed hundreds of specific non-tariff barriers. And we remain firmly committed to this work.
By raising awareness and ensuring a level playing field. we can increase U.S. exports and strengthen the American economy.
Something else that’s sure to boost U.S. exports is the Trans-Pacific Partnership. As many of you know, the TPP will be an ambitious, next-generation, Asia-Pacific trade agreement.
This week, the 17th round of negotiations will take place in Lima, Peru, and all the members of the President’s trade team will work with partners to address traditional trade issues involving:
- goods and services;
- rules on intellectual property; and
- technical barriers to trade.
In addition, we are going beyond the liberalization achieved in previous U.S. free trade agreements. We want to negotiate new areas that address cross-cutting trade issues, including:
- the development of regional production;
- regulatory coherence; and
- supply chains.
We are making progress, which is important because its potential is great.
The current TPP countries represent a $1.7 trillion trading relationship for the United States. That’s 45 percent of U.S. exports. And once negotiations are complete, we will have an incredible opportunity to take this engagement to the next level, generating great benefits for American businesses.
And I look forward to working with you to make the most of this promise by increasing the amount of U.S. exports flowing out to global markets.
I also want to work with you to increase the investment coming into the United States. It’s no secret to business leaders like you that investment fuels economic growth. When we attract or expand foreign direct investment — we put more people to work, which creates more customers for American businesses and strengthens the American economy as a whole.
The good news is that the United States has long been a leader in attracting FDI. We’ve got a number of attractive qualities, including:
- a robust consumer base;
- intellectual property rights protection; and
- an open economy.
Qualities like these have made it a very attractive destination for investment. Unfortunately, historically, many foreign investors have been frustrated by the fact that the United States didn’t have a one-stop shop or a national program to engage with.
Well, that changed in 2011, when President Obama created SelectUSA. And through this effort, our message has been this: that the United States is open for business. We are working with current and potential foreign investors every day to help them explore investment opportunities in the United States.
Obviously, the Asia-Pacific region is a source of great possibilities for this effort. And Korea is a key player. The total stock of FDI from Korea to the United States is valued at roughly $18 billion, ranking Korea among the top 20 largest — and fastest growing sources of FDI in the United States.
And we encourage this investment because 30,000 U.S. workers are employed because of these dollars. These subsidiary companies hold almost $50 billion in U.S. assets, and contribute nearly $9 billion in U.S. exports.
That’s why we view such investments as a win-win situation. On one hand, Korean firms have access to the largest, most transparent and most dynamic market in the world. Meanwhile, U.S. communities, businesses, families and workers are benefiting in the form of new job and other economic positives.
To build on this progress, the Department of Commerce is hosting the inaugural SelectUSA Investment Summit later this year. It will take place in Washington, D.C. — from October 31-November 1.
The two-day conference will connect investors — both foreign and domestic — with U.S. Economic Development Organizations to support business investment in the United States.
If you are interested in participating, I urge you to reach out to my office.
Together, we can expand investments between the United States and the Asia-Pacific region. And together, we can collaborate in a number of ways to help your businesses compete and succeed in the 21st century economy.
That’s why I’m so glad to be a part of Trade Winds Asia. It’s a chance for such a diverse group to come together, talk together and ultimately work together. And I look forward to succeeding together for many years to come.
Once again, my thanks to all the organizers, sponsors and attendees of Trade Winds Asia for making this such a great event.
I wish you all a very productive and enjoyable conference.
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