Senior Director, Export Promotion and Trade Policy
Joseph K. Hurd III
The New England Trade Development Summit
Monday, October 17, 2011
New Bedford, Massachusetts
Welcome and Introduction
Thank you Mayor Lang for your remarks. It’s a privilege to share the stage with you, and I know that my colleagues at Commerce appreciate your leadership and all that you are doing to represent New Bedford’s interests in Washington.
A special thank you to you, Kristin, for your kind introduction. Kristin – I just wanted to say that it has been a pleasure working with you and your team, including Edward Anthes-Washburn, in the run-up to this summit. I also hear from my colleagues at the Economic Development Administration that you are a rock star, and I’d have to agree.
Is Michael Hunter, the Undersecretary for Housing and Economic Development here? Mr. Hunter, it’s good to see you, and thank you for all you are doing for the Commonwealth. Matt Morrissey? The Executive Director of the New Bedford Economic Development Council. We pay a lot of attention to the good work that your group, along with the New Bedford Chamber of Commerce – I think Roy Nascimiento, the President, is here – does. Chambers of Commerce nationwide, including here in New Bedford, represent the best of what the business community has to offer, and there is no way that we could do what we need as a nation to boost our exports and create jobs without the support of state and local economic development agencies and Chambers of Commerce.
I note that the title of today’s forum is the “Trade Development Summit”. How many of you are exporters? Manufacturers? Services companies? Looks like I am preaching to the choir somewhat. In preparing my remarks, I spent a good bit of time with our Commercial Service staff on the ground here in Massachusetts – are Jim Paul and Maryanne Burke here? I’d like to introduce them both – Jim is the director of the Boston office of the U.S. & Foreign Commercial Service, and Maryanne is an international trade specialist with the office. How many of you know Jim or Maryanne, or have worked with the Commerce Department US Export Assistance Center here in Boston? That’s good to see.
I am honored to be addressing you today -- the SouthEastern Massachusetts trade and business community. I understand that many you have taken time from work to attend this summit today, and thank you for coming.
It’s also good to be back home. I was raised just up the road in Wellesley, Massachusetts, and went to high school there. I know New Bedford pretty well – we used to swim against NBHS, even though our teams weren’t in the same sports conference. I remember one or two friendly – well, not so friendly – swim meets here back in the 1980s. I am also familiar with New Bedford’s storied history as a fishing port, and it’s great to see that the legacy that many of the families who built this city is still alive and well.
As a fellow son of Massachusetts, and a small business owner now serving in the Administration, I feel a strong kinship with each of you. No one needs to teach fishermen in New Bedford how to create jobs, and businesses are far more efficient in job creation than the federal government. But – and I hear this every city I visit – Government can and should play a role in helping create the right environment to spur job growth through providing access to information, to financing, and to international markets.
That being said, the economy has been through a lot in the last few years, and we recognize the pain that many workers and companies, particularly small enterprises, are in.
For those of you who don’t know what the National Export Initiative is, back in January 2010, President Obama announced the NEI in his State of the Union address and set the ambitious goal of doubling U.S. exports from $1.57 trillion to $3.14 trillion by the end of 2014 to support millions of jobs here at home. Helping U.S. companies become more competitive internationally is a critical step to “winning the future.”
My role, as the Senior Director of Export Promotion and Trade Policy at the U.S. Department of Commerce, is to oversee the interagency process that develops strategies to implement the NEI. 18 different export promotion agencies – it’s fun.
We’re going to have a good conversation today. We’ll spend the next 15-20 minutes talking about the NEI, the 2011 National Export Strategy, what the Administration is doing to help U.S. companies increase their exports, and what this means for New Bedford’s businesses. I’ll start off with some macro-level facts and figures to provide a little context, and then we’ll go interactive, with a little time for questions and answers. [[Keep time..]]
Last Week’s Developments
Last week was a good week for us in the international trade world. Wednesday evening marked a crucial step forward in realizing the President’s jobs plan when Congress approved the three pending trade agreements with Korea, Colombia and Panama – with bipartisan support.
The trade agreements, as well as renewal of Trade Adjustment Assistance and the renewal of expired trade preference programs, are part of this Administration’s ambitious trade agenda that opens new markets for our exports and creates opportunities for America’s working families.
This is a major win for American workers and businesses. As the agreements are implemented, we will see not only an increase of American exports that bear the proud label “Made in America,” but also the creation of tens of thousands of good-paying American jobs, and increased protection for labor rights, the environment and intellectual property rights. American automakers, farmers, ranchers and manufacturers, including many small businesses, will be able to compete and win in new markets.
Now that the agreements are passed, we intend to move quickly to work with Colombia, Korea and Panama to ensure that each country has done all that is necessary to implement the agreement and bring it into effect. We also intend to do that right, so that American businesses and workers receive the full benefits of these important agreements.
However, last week also brought some disappointment in pushing the Administration’s jobs agenda. You’ve been hearing a lot in the news about the American Jobs Act. I don’t need to repeat all the details here, but it’s important to stress that the purpose of the Act is simple: put more people back to work and put more money in the pockets of working Americans. It does so without adding a dime to the deficit. And everything in the act has been proposed before:
- TAX CUTS TO HELP AMERICA’S SMALL BUSINESSES HIRE AND GROW
- PUTTING WORKERS, INCUDING VETERANS, TEACHERS AND FIRST RESPONDERS BACK ON THE JOB WHILE REBUILDING AND MODERNIZING AMERICA
- PROVIDING ASSISTANCE TO THE LONG-TERM UNEMPLOYED
- PROVIDING TAX RELIEF FOR EVERY AMERICAN WORKER AND FAMILY
In short, Congress needs to pass this bill. The faster we get these proposals approved and implemented, the faster we can put money back in people’s pockets and get small business employees, construction workers, teachers and first responders back to work.
National Export Initiative
Now let’s talk about the NEI. There have, of course, been previous efforts by the federal government to promote exports. What sets the NEI apart is that it is the first-time the United States has a Presidential-led, government-wide export promotion strategy.
Now, the decision to export is one fundamentally made by U.S. business owners, entrepreneurs, and farmers. We can’t make that decision for businesses, but once a business is interested in exporting, we’re more than happy to help. The NEI is the Obama Administration’s commitment to serve as a full partner with U.S. businesses to promote American-made goods and services worldwide, within global trading rules.
The NEI is focused on five areas:
- improving trade advocacy and export promotion efforts;
- increasing access to credit, especially for small and midsize businesses;
- removing barriers to the sale of U.S. goods and services abroad;
- robustly enforcing trade rules; and
- pursuing policies at the global level to promote strong, sustainable, and balanced growth.
As part of the NEI, President Obama named the first-ever Export Promotion Cabinet – ensuring that export promotion would be a top issue for the top officials across the Administration. As Secretary Locke explained it, prior to the NEI export promotion may have been a some-of-the-time focus for some federal agencies, but with the NEI, now it is an all-of-the-time focus across all federal agencies. President Obama is personally engaged in this effort, as evidenced by his support for the trade agreements and Trade Adjustment Assistance.
During the first year of the Administration in 2009, we spent a lot of time soliciting input from the business community. We heard, time and time again, that U.S. companies, particularly small-and-medium sized enterprises, often face hurdles when trying to close an export sale, including lack of readily available information about exporting and market research, challenges obtaining export financing, strong competition from foreign companies and obstacles thrown up by foreign governments. This suggests an important role for the federal government.
To include the views of the business community, we reached out to the President’s Export Council, which is comprised of 20 business and labor leaders. chaired by Jim McNerney of Boeing and Ursula Burns of Xerox. The PEC has sent seven letters to the Administration with recommendations of steps the federal government on issues such as improving services exports, manufacturing exports, our transportation infrastructure, visa reform, and the like.
Why is all of this important? Consider this: 95 percent of the world’s consumers live outside the United States. Yet, only one percent of U.S. businesses – about 280,000 firms – are currently exporting. While we are happy to see so many exporters here, we want to increase that one percent figure. We also know that 58 percent of those businesses are exporting to only one market – Canada or Mexico. By helping more companies export, and by working with current exporters to get them to export to more than one country, we can help improve America’s economic base and create jobs.
Across the world, a new middle class is emerging, particularly in places like Brazil, India and China. Every two years, over 300 million new consumers – that’s one United States – enter the middle class. These new consumers account for about 8.4 percent of global middle class consumption and possibly up to 26 percent in the next 10 years. According to the IMF, nearly 87 percent of the world’s economic growth over the next five years will take place outside of the United States. As this new global middle class seeks to improve their standard of living, American-made goods and services will be in high demand. Sell more goods and services, create more jobs.
One of the NEI recommendations is for the government to focus resources on helping companies export to emerging high-growth markets like China, India, and Brazil. We’ve also identified six next tier markets: Colombia, Vietnam, Indonesia, Turkey, Saudi Arabia, and South Africa, and have developed commercial engagement strategies for these and other emerging markets. All of these markets, in addition to the EU, Canada and Mexico, are key trading partners for Massachusetts businesses, and we want to work with you all to help you start exporting to these markets.
How are we doing this? At the Department of Commerce, we are leveraging our global footprint. We operate U.S. Export Assistance Centers in 107 locations in 49 states – staffed with professionals like Jim and Marianne – ready to counsel U.S. companies about exporting. We also have commercial officers in 77 countries around the globe ready to connect companies with foreign buyers and distributors, and provide critical insight on market issues.
And, we’re seeing results. In 2010, U.S. exports of goods and services increased nearly 17% over 2009 -- the largest year-to-year percentage change in over 20 years. That trend has continued into 2011 – year to date U.S. exports are up 16% over 2010. We are well on pace to achieve President Obama’s goal of doubling exports in the next five years. To provide some context, last year the United States had $1.83 trillion dollars in exports of goods and services -- the second highest annual total on record. Over the past 12 months, we have had over $2 trillion in exports.
Massachusetts has also benefited from this wave. There is a Massachusetts Export Initiative (MEI), that’s focused on working with companies in the state’s leading technology sectors such as Biotechnology and Medical Devices, Clean Energy, Digital Industries, and Advanced Manufacturing. And our agricultural products are globally competitive – cranberries, and, yes, seafood. Last year, Massachusetts exported over $26 billion worth of manufactured goods to countries like Canada, the UK, China, Japan and Germany. This is an 11 percent increase from 2009, and so far this year, Massachusetts is on track to exceed last year’s levels. So Massachusetts businesses “get it” in terms of exports.
Let me briefly share with you some of our successes so far this year:
- Between January and June (latest figures) The Department of Commerce’s International Trade Administration assisted over 3,400 U.S. companies export for the first time or increase their exports overseas, 87% of whom were small and midsize businesses. This is over $2.7 billion of exports.
- Commerce’s Advocacy Center helped U.S. companies competing for international contracts and other U.S. export opportunities record 33 wins, worth $18.5 billion in U.S. export content, supporting an estimated 101,000 jobs. Does anyone know what commercial advocacy is?
- Commerce has coordinated 23 trade missions to 19 different countries so far this year, with nearly 475 companies participating. Over $800 million in increased exports from these missions. All of these numbers are up year on year.
- And, we recruited nearly 10,000 foreign buyers to visit major trade shows here in the United States and directly connect with U.S. companies.
- To address the critical need for export financing, President Obama signed into law the Small Business Jobs Act, which significantly expanded financing capacity and long-term support for small-and-medium sized companies looking to export. The SBA and the Export-Import Bank are the two primary export-related grant-and loan-making bodies for U.S. businesses.
- Under the Jobs Act, the SBA is providing $30 million in grants – not loans – to states, territories, and the District of Columbia, to help increase small business exporting over the next 12 months. This program is called the State Trade and Export Promotion Program (STEP). Massachusetts companies have been awarded $614,000 under the STEP program.
- This money can be used to fund participation in foreign trade missions, foreign market sales trips, subscriptions to services provided by the Commerce Department, website translation fees, design of international marketing media, trade show exhibitions, participation in training workshops, and other critical export initiatives.
- In order to apply for a grant under the STEP program, interested businesses can contact the office of the Massachusetts Export Initiative, and the contact details are on the SBA website and on export.gov. Do we have anyone from SBA here today?
- In loan activity, so far this year – it’s been a record year – the SBA has authorized over 650 loans, including 588 loans to SMEs, totaling $332 million to help companies engage in exporting.
- The Export-Import Bank: Financing provided by ExIm enables U.S. exporters to compete on a level-playing field by providing capital not available through commercial markets and minimizing international commercial and political risk. Last week, Ex-Im reported that it had set export finance records in a number of key areas for the third straight year, including overall financing that for the first time exceeded $32 billion dollars. These loans supported about $41 billion in exports by more than 3,600 U.S. companies, helping to support approximately 290,000 export-related American jobs.
- ExIm small business financing rose over 70 percent from $3 billion in FY 2008 to $6 billion in FY 2011 and is up $1 billion from last year. As part of its efforts to increase this portfolio, Ex-Im’s Global Access for Small Business initiative has held more than 20 forums across the country, reaching 4,000 small business exporters.
- Finally, the Administration has been focused on addressing barriers to foreign markets. Last year, the International Trade Administration successfully resolved some 82 trade barriers in 45 countries affecting a broad range of industries, helping to ensure U.S. companies better access overseas.
- And, of course, you just heard about the trade agreements.
While we are proud of our successes so far, we know we cannot rest on our laurels.
Partnership with America’s Seaports
Let me close by sharing with you how important America’s seaports are to the NEI’s success and how we are working together to help U.S. exporters.
Some years ago, several public service advertisements appeared on the sides of buses in Washington, D.C.. Their message: “The product you’re using today was on a vessel yesterday.”
Not everyone who saw these advertisements understood its message. But those who work for America’s seaports and shippers all did. And as someone from Massachusetts - where ports such as New Bedford, Gloucester and Boston are so important to the health and success of our economy – I understand this message very well.
For most exporters, America’s seaports are the gateway to the global economy. Over 75 percent of our merchandise exports by volume – and over 36 percent by value, the largest modal share – leaves the United States by water. And in overall terms, ocean transport carries more U.S. international merchandise trade than air cargo, trucks, railroads, and pipelines combined.
So I’d like to discuss several ways in which the Commerce department, America’s seaports, and industry associations such as the American Association of Port Authorities are working together to achieve the NEI’s goal.
One of the key parts of the 2011 National Export Strategy was to improve the nation’s infrastructure to help U.S. businesses get their goods to the global market. While people typically think infrastructure improvements are designed to benefit businesses in the heartland, improving our road and rail links are of no benefit if the seaports are the weak link in the modal chain. Over the past three years, the Departments of Commerce and Transportation have worked together to engage the seaport and freight industry. There is a Competitive Supply Chain Infrastructure Initiative. Here, the Departments of Commerce and Transportation are working with freight system users and stakeholders to identify the critical elements of a comprehensive, holistic U.S. freight policy. Our goal in developing such a policy is to achieve the seamless and facilitated goods movement across all transport modes and throughout the nation that is needed to boost our export sales and our national competitiveness.
To better understand America’s supply chain and transportation problems, Commerce and Transportation are also leading a comprehensive series of joint outreach forums to regional stakeholders. At these forums, we are gathering information on each region’s top freight movement and infrastructure issues, and on what regional stakeholders view as potential solutions. This year alone, we have held successful joint forums in Seattle, Kansas City, and New Orleans, and we look forward to further collaborative work with America’s seaports and freight stakeholders and the DOT to address these key issues.
America’s seaports provide crucial help to U.S. exporters. I know I’m preaching to the choir here – experienced port officials know their exporters’ needs, federal export promotion programs, and overseas trade contacts. They can help these exporters identify overseas markets, understand basic commercial transaction requirements, and address financing, insurance, trade documentation, and risk mitigation issues. And as we see here in New Bedford with Kristen and her team, promoting local job growth and municipal economic development is a key element of each U.S. seaport’s mission.
Recently, the International Trade Administration launched a new partnership with the AAPA to reach out to seaports and leverage our joint export resources and programs in order to help boost America’s economic and job growth. On July 19, Francisco Sánchez, the Under Secretary for International Trade, and Kurt Nagle, President of the AAPA, met at the Port of Oakland to establish our new Partnership with America’s Seaports to Further the National Export Initiative. Under this new program, interested seaports are working with Commerce and the AAPA to host exporter education workshops and webinars through which we collectively help new-to-market and small-to-medium-sized firms to become “export-ready” and share information on overseas trade leads that can lead to new direct sales by these firms in the global marketplace.
These sorts of public/private partnerships are critical if we are going to achieve the NEI’s goals, and we believe that this program represents a win/win for everyone – U.S. businesses, U.S. ports, and our nation. More information on this program will be presented at tomorrow morning’s Federal Initiatives and Trade Policies session, and is available on our Partnership program website, at www.export.gov/ports.
Let me wrap up by suggesting some steps that you can take as a Massachusetts business to contact us and start benefitting from the National Export Initiative. We have many resources to help you become an exporter, export to another country if you are already exporting, get a loan, or report a market access issue. I’ve already introduced you to Jim and Maryanne, our Commercial Service representatives in Boston, and you will hear more from them in the panels tomorrow.
If you don’t have a chance to talk with Jim or Maryanne here, go on the internet. ITA has embarked on a new marketing and communications effort that helps businesses quickly locate government resources that are available to them. Go to export.gov and www.trade.gov.
If you don’t have access to the internet, pick up the phone and dial 1-800-USA-TRADE to be routed to a location near you. As I mentioned earlier, Government can provide a platform and create policies, but it’s up to you, the private sector, to help us move the ball across the finish line.
If you want three take-aways from my speech today, consider these:
- First, The Obama Administration is committed to serve as a full partner with American business to seize the opportunities presented by the global marketplace. That’s what the NEI is all about.
- Second, The NEI is not sector or region-specific; it truly is a nationwide effort to double our exports by the end of 2014.
- And third, the NEI is an example where government agencies are working together, and with the private sector. Because if U.S. exporters win, U.S. workers win. If U.S. workers win, America wins.
I look forward to continuing to work with you all as we make our nation stronger and more competitive.
Remember: Export early – and export often.
The International Trade Administration, U.S. Department of Commerce, manages this global trade site to provide access to ITA information on promoting trade and investment, strengthening the competitiveness of U.S. industry, and ensuring fair trade and compliance with trade laws and agreements. External links to other Internet sites should not be construed as an endorsement of the views or privacy policies contained therein. This site contains PDF documents. A PDF reader is available from Adobe Systems Incorporated.