Under Secretary of Commerce For International Trade Francisco SÁnchez
Minority Economic Development Week
Wednesday , August 25, 2010
As prepared for delivery
Thank you for your introduction, David and Alejandra. I am delighted to be here. Each year, this event grows larger, and it makes perfect sense – and not only because minorities represent an increasing share of the national population. That is only one reason.
The second important reason is that Americans of any cultural background more and more understand that the changing nature of the country’s economy dictates that we unleash the entrepreneurial spirit present in all sectors of our society. The American economy itself is a subsector of a global economy that is creating a new global marketplace.
Our job, then, is two-fold: To make sure that America capitalizes on the new global market and that our minority communities are part of the new economy.In this there is happy coincidence for us in President Obama’s National Export Initiative. I know that you heard a lot about the NEI yesterday.
What I want to do this morning is paint the larger framework which is important for all of us to understand. We are vital to its success and it is vital to your success.
The NEI is nothing less than the creation of a new platform for the United States to increase its exports and, thus, to create jobs for American workers.
If you leave this conference with any one idea that should influence your strategic thinking about the future for your businesses, it is this: That unless companies participate in the world economy through exports, they will have missed out on a historic opportunity.
The last two years have been especially instructive to the country on the matter of trade. The only possible good thing that has come from the deep economic recession that President Obama inherited has been that individuals throughout the country have been forced to consider that trade is remaking the world as we know it.
We read just last week that China has surpassed Japan to become the second largest economy in the world. The Chinese, as we all know, are growing their economy through a massive trade strategy. For us, this requires that we understand where we fit in the new world and how we can identify the opportunities for our goods and services.
This moment in our history makes the Minority Business Development Agency and the International Trade Administration critically important. MBDA and ITA can bring together two of the most important realities of our world: The changing demographics of the country with the obvious international nature of the new global economy.
To do so, we must understand the context of our new world. Much of our economic growth has been internally based through domestic consumption so that the share of the GDP generated by exports in the American economy is slightly more than 10 percent. By contrast, almost half – half – of Germany’s GDP, 30 percent of Great Britain’s; and 28 percent of China’s are generated by exports.
Imagine what our economic position and our unemployment rate would be if we could increase it to 20 percent in this decade.
We were heading in the right direction before the economic downturn that began in December 2007. In 2008, U.S. exports supported more than 10 million full- and part-time jobs but then fell to 8.5 million as the recession took hold.
Despite the hits we took, we have to remember that exports as a percentage of GDP in 2008 had reached the highest levels since 1916.
Trade, then, is how we will grow the American economy and how we remain important in world affairs. Some of you might have seen news reports on the recent report by the Brookings Institution on the role metropolitan areas play in trade.
Metro areas is where increased trade creates jobs, and where do most minorities live?
We must latch on to the growth of the global marketplace. And to this end, we know that minority businesses are twice as likely to export since their roots are specific and often very direct to many of the nations of the world.
One of the directives of the NEI – that federal government agencies cooperate to push export growth within global trading rules – finds a home in the partnership that exists between MBDA and ITA. We share a memorandum of understanding which I believe is the foundation for an expansion of our efforts to promote minority business development.
And so MBDA is partnering with our Economic Assistance Center in Chicago to lead a trade mission to Mexico in January. And the ITA office in San Francisco is collaborating with MBDA to organize a supplier diversity mission to China in September.
China is a perfect example of the nations of the world seeking to make rapid strides to improve their standards of living. They and generating greater demand worldwide for goods and services. A new global middle class can be the source of growth for American companies.
Middle-class consumption in Brazil, India and China -- which together account for about 8.4 percent of global middle class consumption -- could reach 26 percent by 2020. Another way to think about the opportunity is that 95 percent of the world’s consumers live outside the United States.
These projections and new realities are the basis for my department designing specific export strategies for these three countries that can help minority-owned businesses.
Thus President Obama’s reasoning for creating the National Export Initiative is evident.
The President has set as the country’s goal the doubling of exports in five years to support two million jobs for all Americans and to increase export opportunities for the American commercial sector, and that includes minority firms.
The NEI is an effort to co-ordinate the trade promotion activities of the federal government and to protect American businesses from nations who seek to dump their products into our marketplace and, on the other hand, seek to knock down trade barriers for our companies to compete abroad.
I have set five goals as Under Secretary of Commerce for International Trade that can complement minority business development. First – By targeting emerging markets, we can identify where new opportunities lie for American businesses.
Second – Focusing on how emerging technologies -- especially green and clean technologies that can be sold abroad -- can accelerate the process of developing new opportunities.
Third -- Making sure that enterprises of whatever size that could export do so. We need to work more closely with those businesses that approach us with interest in exports to increase their capacity and we must make the possibility of exporting feasible for enterprises looking to grow their companies.
Fourth -- Making sure that we do all we can to vigorously enforce trade laws and rules so that our businesses can compete fairly around the globe.
And fifth – Being always a vigorous voice for American businesses in all sectors. The creation of new jobs here in America rests on how we constantly promote, market and support every company that can export.
Additionally, I am working with the Export-Import Bank, the Overseas Private Investment Corporation and the Small Business Administration to increase financing for export projects. I understand that later today you will meet with representatives from many of these financing agencies: The Export-Import Bank, the Overseas Private Investment Corporation, the Small Business Administration and others.
There is much work to do, but. I know that we all possess the ability to envision the new world around us as a new era of American prosperity.
The new America that is forming is not just a new demographic phenomenon. It is rather the creation of a new American economy that will redeem the investment that each of us make in the country as we prepare it -- and ourselves -- for the future that is quickly forming around us.
All of us have a stake in making sure that each of us in this room succeed. If all of us succeed, America will succeed, and there can be no greater return on investment than that.Thank you.
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