Assistant Secretary of Commerce and Director General Suresh Kumar
U.S. and Foreign Commercial Service
U.S. Aerospace Suppliers Trade Mission to Canada AmCham Luncheon
Tuesday, May 3, 2011
Montreal, Quebec, Canada
As prepared for delivery
Thank you very much for your introduction, Tom. It is always a pleasure to be in Canada, and a particular delight to be leading a trade mission with 21 aerospace supplier companies seeking new business opportunities. I want to thank Ambassador Jacobson and Consul General Lee McClenny for hosting the U.S. delegation, and the AmCham and Tom Creary for its support and its continued partnership with the U.S. Commercial Service here in Montreal.
The United States and Canada share one of the richest, broadest, and deepest relationships in the world. An estimated three million people in the United States trace at least part of their ancestry back to Canada. And Canada is home to more than one million Americans. The shared U.S.-Canada border is over 5,500 miles long, and it binds together companies, employees, tourists, sports fans, and others who depend on goods and services from across our two countries.
Canada and the U.S. share the largest bilateral trading relationship in the world. Trade between our two countries is a critical part of our prosperity. The United States and Canada share a $1 trillion annual bilateral trade and investment relationship with a highly integrated supply chain. In fact, US exports to Canada are over 2.5 times that to China, four times to Japan and five times that to the UK and Germany. US exports to Canada exceed total US exports to China, Japan, South Korea and Singapore combined. Exports to Quebec alone are equivalent to our exports to India and triple our annual exports to Russia. The $1.3 billion contracts that we will sign later tonight is greater than our exports to Portugal.
US exports to Canada account for 2% of gross national income, and the growth of US exports to Canada at 21 percent last year was greater than to any of the G8 countries and also greater than the total US export growth of 17 percent. The state of our bilateral cooperation with Canada continues to to be vibrant, robust, strong and growing.
My delegation of aerospace supply firms is here to further enhance the collaboration between Quebec and U.S. firms in the manufacture and supply of high value goods – in this case the aerospace supply. We are closing over $300 million in transactions on this trade mission alone, but these types of transactions occur with U.S. and Canadian businesses daily in other sectors including IT, pharmaceutical technologies and security and defense. Industries outside the United States seek the innovative products and services that our businesses produce.
to win the future President Obama has said that “We need to out-innovate, out-educate, and out-build the rest of the world.” To win the future, we must work together to create opportunities that encourage innovation and spur growth. We must produce innovative products and technologies, we must educate and train our workers and students so that we may scale new technologies and we must connect our exporters with buyers worldwide. When the U.S. exports, jobs are created here and abroad.
The Obama Administration stands for the principles of free and fair trade and recognizes that U.S. businesses need a level-playing field to take their products and services to global markets. We are working to further open markets, remove barriers, and create the framework for U.S. businesses to increase innovation and access to this innovation to stay globally competitive.
America is at its best when it is inventive. We invented the motor car, the airplane, the computer and even the internet and GPS which we commercialized through public-private partnerships. “Winning the Future” will require continued private sector innovation. The Administration is committed to lay the foundation for future success through policy mechanisms that reduce risk, provide greater predictability and influence common standards. Global trade policies must encourage and nurture innovation by protecting intellectual property rights, and resist push for local content and indigenous innovation; these impede innovation and restrict access to technologies, products and services that can improve lives and livelihoods worldwide. There is a thin line between encouraging and stifling innovation.
When we have innovated we have prevailed. 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 share in today’s markets. American products improve lives and livelihoods globally; because of our inventiveness, consumers around the world value a cache of “Made in the USA” more than one made elsewhere.
Innovation is the foundation for sustainable competitiveness in the 21st century. It is how U.S. companies and our products and services can reach the 95% of consumers who live outside our borders.
Winning the future requires increasing investment in research and development. The Obama Administration has made a substantial commitment to innovation by setting the goal of investing a full three percent of our GDP into research and development. Nowhere is this more important than with small and medium-sized enterprises, which make up 97% of all firms in the United States.
A larger focus for U.S. businesses must be to reinvent what we make, consume, market and sell. Government must reinvent its support, focusing on self-sufficiency, sustainability, innovation and fiscal responsibility. An example of such reinvention came last year when the Administration brought together businesses, entrepreneurs, CEOs, regulators and representatives of foreign governments along with NIST to influence the development of common standards for SMART grid and ancillary products and services. Global trade is built upon a foundation of collaboration that leads to open markets and in the very special relationship that we share with Canada to building shared value and supply chains.
Global trade connects us all and we live in times of a global supply chain. We can do a lot through trade missions to build up supply chain integration through a “smart border.” President Obama and Prime Minister Harper have declared a shared vision for perimeter security and economic competitiveness through their Beyond the Border initiative.
Smart border means that goods and technologies move between U.S. and Canada, quickly, efficiently and with predictability at low cost and using the best of modern IT and security technology. It also means that regulations and standards and manufacturing processes across supply chains are congruent as possible. A joint team will review regulations with a view to eliminate unnecessary burdens on cross border trade that will lead to compatible approaches and greater prosperity on both sides of the border.
Our global leadership is also dependent on how we educate our students to help scale our innovation. America’s long-term goal to out-educate the competition and spark a new wave of American innovation will continue to create jobs for the next generation and guarantee that America can win the future.
Announced by President Obama in January 2010, the National Export Initiative aims to double U.S. exports by 2015. It is at the forefront of the Obama Administration’s short and long term economic strategy for winning the future, and serves as a catalyst to enhance our competitiveness, create sustainable jobs and build a stronger America.
Through the National Export Initiative, we help companies expand their global footprint to reach more customers worldwide. This not only helps create greater sustainable employment but also helps us become more competitive.
You are here today seeking new opportunities to expand your business overseas. There are several real and perceived barriers to exports, but American enterprise, particularly SMEs dont have to face this alone- they have the full support of the U.S. government in connecting you to global partners and markets. Last year, the U.S. Commercial Service assisted 18,000 companies export, of which 16,000 were small -and medium-sized firms employing fewer than 500 persons. As a result, nearly 5,600 companies exported for the first time or increased their exports overseas, 85 percent of which were small and medium-sized businesses. The Commercial Service helped U.S. businesses post over 12,000 export successes in 2010. Every $1 invested in the US & FCS last year returned $135 to the American taxpayer by way of facilitated exports. Last year exports grew 17% vs. 2009 which is better than the 15% compounded annual growth rate required to double exports within 5 years. Exports comprised 12.5% of U.S. GDP in 2010, up from the 11.2% recorded in 2009. Exports contributed nearly half of the 2.9 percentage point growth in real GDP in 2010. The $1.83 trillion total in exports of U.S. goods and services represents the second-highest annual total on record. Every $ invested in the US & FCS last year returned $135 to the US taxpayer.
The Administration’s focus on innovation, education and commercialization reflects market-driven, competitive approaches that make sure that the United States is the best place to do business and to innovate.
The Administration recognizes that increasing global trade provides opportunities for growing America’s SMEs. 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 - can no longer be the only levers of an emerging and even more globally connected marketplace. The Administration works with our trading partners to provide access to new markets: those who seek access to U.S. markets must also remove barriers to trade and open their markets to U.S. products.
President Obama and Prime Minister Harper announced a business to business and regulatory harmonization initiative to open up trade between our countries further. Our governments are working together to seek private sector input into crucial reforms and initiatives that will increase efficiency, lower cost and expand the supply chain to increase our international competitiveness.
To win the future, U.S. businesses must expand their global reach to new markets. 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. With Canada as our leading trading partner, it makes sense to consider it as a top export market for U.S. business. And the U.S. Commercial Service is here to help your business identify new markets, develop market entry plans guide and assist you to secure working capital even as they assist others to navigate foreign customs and regulations.
Through our cooperative relationship, the U.S. and Canadian governments share a responsibility to promote investment into both our countries and ensure protections in intellectual property. The United States is Canada’s primary source of foreign direct investment totaling $280 billion in 2009 and supporting 1.1 million Canadian jobs. The Canadian FDI into the United States totaled $226 billion in 2009 and supported jobs in manufacturing, finance and banking sectors. While we can stimulate dialogue, serious expansion of high tech and venture capital in Canada will be dependent on IPR reform and progress on this issue must be made.
As I mentioned, exports as a percentage of our GDP is just 12.5%; whereas exports account for 40 percent of Germany’s GDP, 30 percent of Canada’s GDP – 22 percent coming from exports to the United States -- and a quarter of China’s GDP comes from exports. The IMF forecasts that 87 percent of world economic growth over the next five years will occur outside the United States. Doubling U.S. exports is not only possible but necessary if we are to stay globally competitive and secure our economic future. Because when U.S. companies export more, we produce more. When we produce more, we need more workers. And export related jobs on average pay 15 percent more than the typical wage in America.
Innovation and exporting are inextricably linked; they ARE the drivers for sustainable economic growth and help create well paying jobs.
Every $1 billion of goods and services we export supports more than 5,000 U.S. jobs. And through global supply chains such as those between the U.S. and Canada aerospace industry provide our SMEs with growth opportunities. When companies such as Pratt and Whitney and Bombardier manufacturer their products, jobs are created and the economies continue to grow on both sides of our borders.
I look forward to our continued collaboration with our partners and to working with the SMEs like the ones here today to create a vibrant, robust, and resilient American economy; an economy which produces well paying jobs at home, increases our competitiveness globally and helps America lead the way in creating global prosperity.
When you succeed, the entire American and Canadian economies succeed.
Thank you for having me here today.
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