Assistant Secretary of Commerce and Director General Suresh Kumar
U.S. and Foreign Commercial Service
2nd Annual Governor's Awards for Excellence in Global Trade
Thursday, May 12, 2011
Little Rock, Arkansas
As prepared for delivery
Thank you very much for your introduction, Patricia. This is my first visit to Arkansas and it is a pleasure to be here at the 2nd Annual Governor’s Awards for Excellence in Global Trade. I want to thank Governor Beebe for his continued commitment and vision to increasing global trade and honoring the achievements of Arkansas exporters.
I would like to make particular mention of Maria Haley and her excellent team for making today possible. Also, I want to acknowledge the Arkansas District Export Council members – particularly Graham Catlett and Dan Hendrix and all of the DEC members who have shown me a warm welcome.
We also have our representatives from the Diplomatic Corps here today – Consuls General Andrés Chao Ebergenyi representing Mexico and Paul Lynch, from the United Kingdom.
I want to welcome the student winners of the Governor's Cup Business plan competition. It's important to acknowledge the integration of entrepreneurialism and globalism in building our country's future.
As President Obama said in the State of the Union address this year, “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 the push to impose local content and indigenous innovation requirements; such requirements 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 the National Institute of Standards and Technology to influence the development of common standards for SMART grid and ancillary products and services.
Hand-in-hand with innovation through R&D, and investment in infrastructure from high speed rail systems to high speed internet, the Administration has a targeted focus on creating and funding sustainable solutions for the future that lead the global marketplace.
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.
We are here today to celebrate local Arkansas companies exporting around the globe. There are several real and perceived barriers to exports, but American enterprise, particularly SMEs, don’t 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 to 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 Little Rock U.S. export assistance center headed by Director Patricia Gonzalez and her team, Eric Johnson and Mary Hayward, can assist Arkansas companies with expanding their global exporting footprints just like the companies being honored today.
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.
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 and to win in global markets.
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 growth in 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.
This is why the trade agreements in Korea, Columbia and Panama are a priority for the Obama Administration. The U.S.-Korea trade agreement (KORUS) is ready for consideration by Congress. KORUS has already won widespread support from business, labor, agriculture, and services groups across the country. It is time to ensure the promise of KORUS is fully realized – more than $10 billion in increased exports of goods alone, supporting more than 70,000 American jobs.
With the same engagement and bipartisan cooperation as on the Korea agreement, we will continue to work to move the Panama and Colombia agreements forward through Congress. Our goal is to have all three agreements implemented by Congress this year. We will not be left behind as others secure greater market share at the expense of U.S. exporters.
I understand that there will be a Korea Free Trade Agreement event here next month. I also understand it will occur a week before the Farm Bureau takes a trade delegation to Korea. Timely passage of the Korea FTA will benefit Arkansas agribusiness.
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. And the U.S. Commercial Service is here to help your business identify new markets, develop market entry plans, and provide information to guide and assist you to secure working capital, even as they assist others to navigate foreign customs and regulations.
Private sector employers driven by small and medium-sized companies have added jobs for fifteen straight months, but unemployment remains unacceptably high. Facilitating and growing exports that create more employment has never been more important than now. The more we sell overseas, the more jobs we create in the United States. Every $1 billion of goods and services we export supports more than 5,000 U.S. jobs.
While U.S., exports as a percentage of our GDP is just 12.5%; Germany’s exports are 40 percent of GDP, Canada’s 30 percent of their GDP 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.
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 economy succeeds.
Thank you for having me here today and congratulations to today’s award winners.
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