Assistant Secretary of Commerce and Director General Suresh Kumar
U.S. and Foreign Commercial Service
World Trade Center Association
Monday, December 13, 2010
New York, New York
As prepared for delivery
Thank you very much for your introduction, Kofi. I am pleased to be here today with you all the representatives of the World Trade Center Association and what I consider our extended family and partners. Your work with American companies is extremely important to us – it builds robust trade relationships and helps grow U.S. exports. The brochure for your prosperity through trade program highlights “charting your path to success” Instead I’d like to spend our time together “charting our path to success” – and achieving our goal of Win-Win solutions and shared success.
Events like these provide an opportunity for communication and collaboration between the Department of Commerce and partners like you throughout the United States and beyond. As the world recovers from one of the sharpest economic declines, we must work together to create opportunities to connect exporters and buyers, while recognizing that growing U.S. export transactions is not only good for the U.S. economy but also for the economies of our trading partners. When the United States exports, jobs are created here in the U.S. and abroad.
Tonight, I would like to share some thoughts about the Obama Administration’s short and long term economic recovery strategy, which serves as a catalyst for significant change across our economy; and where exporting fits into this strategy. This approach enhances our competitiveness, creates sustainable jobs and builds a stronger America while providing superior technologies, products and services to consumers across the world.
This Administration’s overarching policy aims to transform the U.S. economy and lay the foundation for sustainable long term success. By investing in emerging technologies, we help create new market sectors like renewable energy. Through education programs we are developing skills that will help sustain innovation and build a competitive advantage. And through commercialization initiatives such as the National Export Initiative, we help connect innovative products and services to global markets. We do this while creating jobs today and making the investments that help generate greater employment as we help companies expand their global footprint to reach more customers worldwide.
As Assistant Secretary and Director General of the U.S. & Foreign Commercial Service, I lead a team of 1,500 trade professionals in 109 offices across the U.S. and 127 cities in 79 countries. Day in and day out we connect U.S. businesses with qualified global buyers; we advocate for business in public procurement projects worldwide; and we level the playing field for U.S. businesses by removing non-tariff barriers through various commercial diplomacy initiatives. The Commercial Service is a key implementing agency of the President’s National Export Initiative and is committed to enhancing U.S. competitiveness.
The National Export Initiative has sharply defined goals: 1. double exports over five years and 2. support millions of jobs. By helping U.S. companies export to more markets and encouraging more U.S. companies to export, we create well paying jobs here at home U.S.
Competing in international markets makes us more innovative and cost-effective. A recent Brookings Institute study shows that exports spawn ancillary industries in urban centers that enhance competitiveness.The U.S. has always offered solutions that have been well received in the international marketplace for their quality; the NEI helps commercialize and scale exporting into a larger strategy of economic transformation.
U.S. enterprise has always been amongst the most inventive in the world: the motorcar, the computer, the internet and GPS were all invented in the USA. When we have innovated we have prevailed. And that is why this Administration places so much emphasis on innovation on building and owning the markets of tomorrow even as we vigorously compete for market share in today’s markets. American products improve lives and livelihoods globally and because of our inventiveness, consumers around the world value a cache of “Made in the USA” more than one made elsewhere.
The NEI is part of the Obama Administration’s overall framework for long-term economic growth. Over the last 18 months, this Administration has set out a vigorous economic recovery plan. The recession that met the incoming Administration was the worst downturn any of us has seen – and it affected all aspects of the economy – including global trade.The Administration took tough and game-changing measures to stimulate the economy in the face of the crisis that will continue America’s role as an economic leader.
Although private sector employers have added jobs for eleven straight months, unemployment still remains unacceptably high and facilitating exports is a way of creating more employment.
The President is calling on leaders in Congress, American businesses and the private sector to work with him to accelerate job creation and make America more competitive in the 21st century.
The most important contest we face as a nation is not between Democrats and Republicans, but between America and our economic competitors around the world. And so it is critical that we make the investments necessary to stay competitive in the 21st century by rebuilding our economy on a new, stronger foundation for growth and simultaneously assisting American companies to export our product and services to the 95% of consumers who live outside our borders.
The Administration’s two-pronged recovery strategy – with focus on short-term relief and at the same time encouraging long-term, lasting transformation – has been consistent from the start of the Administration, with the passage of the Recovery Act.
The President has proposed that all American businesses should be allowed to write off all the investment they do in 2011; he’s proposed a bigger, permanent tax credit for companies for all the research and innovation they do here in America; and he’s made a substantial commitment to innovation by setting the goal of investing a full three percent of our GDP into research and development.
While our country faces a difficult fiscal situation, we cannot cut back on investments in areas that have the biggest impact on our economic growth. With the Recovery Act, the Administration made the largest investment in research and development in our nation’s history. It helped craft a larger change: to reinvent what we make, consume, market and sell; and to reinvent government support, focusing on self-sufficiency, sustainability and innovation.
As part of the Bill, the Department of Energy began the Advanced Research Projects Agency-Energy (ARPA-E), a fund created to finance breakthrough energy technologies, and to accelerate transformational technological advances in areas that industry is not likely to undertake independently because of high risk. Through this and other programs, the federal government is acting as a partner in innovation, and encouraging competition among ideas for grant monies.
We are also investing in our infrastructure. In October President Obama announced this Administration’s commitment to build the best airports, rail systems and roads, and expand our Smartgrid capabilities and broadband services. While countries such as China spend about nine percent of its GDP on investment in infrastructure, the U.S. only spends two percent.
Hand-in-hand with innovation through R&D and investment in infrastructure is a targeted focus on creating and funding sustainable solutions for the future. Two of the six long-term economic investment goals of the Recovery Act focus on energy efficiency and renewable energy. This Administration has made sustainable growth a priority.
To continue to lead in the global marketplace, we must produce and market the most innovative and technologically advanced products in the world. And that global leadership is dependent on how we educate our students today – especially in science, technology, engineering, and math. In an era where most new jobs will require some kind of higher education, we have to keep investing in the skills and education of our workers. That’s why the President has called for America to once again have the highest proportion of college graduates in the world by 2020.
To meet this goal, we’re making college more affordable for millions of students; we’re making an unprecedented investment in community colleges; we’re reforming K-12 education from the bottom-up and investing in the expansion of early childhood education for our youngest children.
The Administration’s focus on innovation, infrastructure, sustainability and education reflects market-driven, competitive approaches, allowing the best ideas to rise to the top and development of an economic policy that makes sure that the United States is the best place to do business and to innovate.
At the core of this strategy is a connection to the marketplace, which is where exporting comes in. The Administration recognizes that increasing global trade is imperative to provide new opportunities for growing American companies. All of the pieces of the economic recovery feed innovative and sustainable solutions – and these solutions must have access to international markets to thrive and improve.
Exporting must play a larger role in the U.S.’s economic prosperity. The pre-crisis drivers of U.S. economic growth - domestic consumer and business spending - continue to falter. These cannot be the only drivers to sustain our economy in the future.
To move forward, U.S. businesses must expand their global reach to new markets. As part of the strategy to ensure that the U.S. economy moves forward in its recovery, President Obama launched the National Export Initiative. We made a significant contribution to the goal of doubling exports just last week by finalizing a trade agreement with South Koreathat will boost our annual exports there by $11 billion, which will support at least 70,000 American jobs.
Today, exports support nearly 10 million jobs in America, including almost 7 million manufacturing jobs. Exports as a percentage of our GDP were 11 percent in 2009, but the U.S. is still far behind countries like Germany where exports account for 40 percent, or Canada at 30 percent or even China where 25 percent of its GDP comes from exports. Doubling U.S. exports is not only possible but necessary if we are to stay globally competitive and secure our economic future.
Through the NEI, we will connect businesses with global consumers and market opportunities. Less than 1 percent of America’s 30 million companies export, and of those companies that do export, 58 percent export to only one country. Clearly we can, and must, do more to ensure that U.S. businesses capture the full potential of economic opportunities that exist internationally. The NEI is off to a great start. Exports are up about 18 percent compared to where they were a year ago – and manufacturing exports are up 20 percent.
At the same time, expanding global trade through the National Export Initiative provides world consumers access to American products, services and technologies that can improve lives and livelihoods. In the 21st Century economy – technological development, innovation, global trade, and domestic job creation are interdependent. Doubling our exports in five years is both an attainable goal and the right thing to do, not only for the U.S., but for the world.
We have the technology, the skilled labor force and the most open markets in the world that are the incentive for inward investment, our Invest in America program that allows worldwide participation in our innovation-driven economy.
The Commercial Service leads U.S. federal efforts to attract Foreign Direct Investment or FDI through our Invest in America program. Invest in America promotes investment into the U.S. by focusing on outreach to foreign investors, assisting foreign firms that encounter problems due to a federal rule or regulation, and by providing contact information to foreign investors for all 50 states.
Inward investment plays an important role in the U.S. economy, supporting over 5.5 million jobs, and nearly 20 percent of our exports. In 2009, the U.S. attracted $130 billion of FDI, more than any other single country in the world.
Inward investment in itself is a key innovation driver, funding nearly 15 percent of annual research and development expenditures. The virtuous cycle, U.S. innovation in specialized industry sectors, such as green technology, manufacturing and health IT create demand for foreign investment and lead the way forward in growth of exports; inward investment then funds additional R&D and innovation. International engagement – whether through exporting or foreign inward investment, is inextricably linked to our innovation economy.
The Obama Administration’s vision to rebuild our economy differently – to “change the game” by focusing on innovation and competition;sustainability; education; and international engagement – is laying the foundation for a strong sustainable economy in the United States. Innovation and exporting are inextricably linked; they ARE the drivers for sustainable American economic growth. I am thrilled to be working with the private sector and through the support of some 326 World Trade Centers across 92 countries, we will help U.S. Enterprises engage in the international marketplace. I look forward to our continued collaboration to help U.S. companies connect with global markets and to substantially scaling up our engagement in our mutual goal of creating jobs and improving lives and livelihoods worldwide.
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