Under Secretary of Commerce For International Trade Francisco SÁnchez
National Export Initiative Congressional Outreach Event
Thursday, August 25, 2011
Walnut Creek, California
As prepared for delivery
Thank you all for the warm welcome. Many thanks to David Bowlby for that kind introduction, and for the outstanding work that the Contra Costa Council has done to support businesses and spur healthy economic development.
It’s an honor to be here today, especially with strong leaders like Congressman Miller, Congressman McNerney and Congressman Garamendi. I always enjoy these kinds of events, when government, business and community leaders come together to push for progress.
Unfortunately, too often these days, we hear a lot of heated rhetoric about the challenges we face, and not enough about solutions. Today, as you’ve just heard, we are focused on solutions — specific proposals to further our economic recovery.
That’s why, on behalf of the Commerce Department, I want to begin by thanking all of you for your leadership and lasting contributions to this community. Your work is critical to California, and the nation, as we continue to take steps down the road to recovery.
We’ve come a long way in the years since the nation faced a financial collapse. When President Obama first took office, he made some tough decisions that pulled our economy back from the brink. More than 2 million private sector jobs have been created during the past 16 months. But too many people are still hurting. And, as the President has said, we have more work to do.
We all know that American entrepreneurs and workers have the drive, the talent, and the ingenuity to do big things — all they need is the opportunity. As the Under Secretary of International Trade, I can tell you that a lot of opportunities for businesses here at home exist with customers overseas. That’s why this administration is making unprecedented efforts to help U.S. companies enter into foreign markets.
Consider that only one percent of America’s companies export. Just one percent. This is clearly a missed opportunity, and we cannot afford to miss opportunities if America is to win the future. The President has correctly recognized that to win the global competition for jobs and industries, we need to out-innovate, out-educate, and out-build the rest of the world.
It’s time for businesses to start thinking and competing globally. Exporting is key to our economic future. That’s why, in his State of the Union last year, President Obama announced his National Export Initiative, or NEI, which mobilizes departments throughout the federal government to double U.S. exports by the end of 2014 supporting several million jobs.
The logic behind the NEI is simple: The more goods and services U.S. businesses export, the more they need to produce. And the more they produce, the more workers they need. And that means jobs.
The ideas mentioned earlier go a long way in supporting exporting efforts. In order to put our nation in the strongest position possible to access the foreign markets, we’ve got to have a solid infrastructure to transport our goods. We’ve got to bolster manufacturing to ensure that our products continue to be of the highest-quality. We’ve got to have a skilled workforce that can succeed in the global marketplace. Again, this is about out-innovating, out-educating and out-competing, which is why the contributions from these Congress Members are so valuable.
This work will be vital to the NEI’s future success, and have a tremendous impact on both bottom lines and community development. Consider the incredible start we’ve already had. Exports have been a key driver of America's economic recovery. In 2010, U.S. exports of goods and services totaled $1.84 trillion, an increase of nearly 17 percent from 2009 levels.
Here in the Bay Area, the San Francisco-Oakland metro area was the 13th largest export market in the United States, with sales totaling $10.4 billion during the first half of 2010.
And exports have been growing at a strong pace overall in the first six months of this year, up nearly 16 percent from the same period last year.
Last month, the International Trade Administration, or ITA, which I lead, reported that U.S. exports supported an estimated 9.2 million jobs in 2010, up from 8.7 million in 2009.
And these are good-paying jobs – up to15 percent more than the typical wage in America. ... Exactly the type of jobs we need a lot more of.
In the second quarter of 2011, exports accounted for 14 percent of all U.S. economic output, which is the biggest portion of our economy since the Commerce Department began tracking quarterly figures in 1947.
But there’s still plenty of room to grow.
When you consider that 95 percent of the world’s consumers live outside our borders, it’s no wonder that increasing U.S. competitiveness and job growth through exports is an all-hands-on-deck project for the Obama Administration.
Although the United States overall is a strong exporter, there is room for improvement. As I said earlier, only one percent of our companies export; and of those that do, 58 percent sell only to one market. We can and need to do better.
We know that American companies and workers produce world-class goods and services that can help meet new global demands. But we also know that our competitors aren’t simply sitting on the sidelines.
They want the jobs that will come with connecting their businesses with the consumers who are going to drive the worldwide economy for decades to come.
We can’t settle for second place. American companies can compete and win on a level playing field. And this Administration is committed to creating this level playing field so that US Businesses have a fair chance of succeeding in the international markets. As part of this work, we are providing unprecedented support to smaller businesses, which play a vital role in our economy and future.
Small and medium enterprises represent more than 99 percent of all employer firms. They’re home to more than half of all private sector employees. And they have generated 65 percent of net new private sector jobs during the past 17 years.
Through the NEI, our goal is to increase the number of small businesses entering the world market – and to increase the value of exports for small businesses that are already exporting.
The more markets a company is selling in, the more diversified the customer base is. That’s why U.S. companies that exported a lot generally held up better than companies that didn't during the recession.
Now, there are plenty of reasons why many U.S. companies don’t export. The NEI is designed to help reduce barriers to trade, and provide easy access to export resources that can boost participation in global trade.
That’s why myself and leaders from USDA, the Export-Import Bank and the Small Business Administration spent the last seven months crisscrossing the country hosting events that target small businesses and bring together representatives from all the agencies that can help them export.
It’s also why Commerce has partnered with UPS, FedEx, the Postal Service and the National Association of Manufacturers to link our services with their small- and medium-sized business customers.
The truth is that there is a wealth of programs, both at the federal and state level, to help businesses export.
At the Commerce Department, we have more than 100 ITA Commercial Service offices in cities throughout the United States, as well as offices in more than 75 countries, to help companies find and penetrate new markets, and to protect their interests abroad.
Our trade specialists work with companies – both small and large – to help them realize the benefits of exporting. Let me give you a local example. Our trade specialists here the Bay Area helped GeothermEx, Inc., a Richmond-based geothermal consulting and services firm, secure four geothermal project concessions in Greece worth $4 million.
We work closely with Agriculture, ExIm Bank, the Small Business Administration, the U.S. Trade Representative, and other NEI export agency principals to ensure that U.S. companies have the opportunities, the counseling, the financing and the championing they need to succeed in international markets.
To make the information easily available, there’s export.gov – a one-stop Web site with practical information that can help companies that aren’t exporting to start and ones that already are to find new markets.
Let me close with this: It is critical we understand that the world has changed. Competition from countries like India and China is more intense. It’s imperative that we up our game, leverage our resources, and help America’s companies, workers, and farmers sell more abroad and create new jobs here at home.
To win the future, the Obama Administration is committed to the passage of the pending Free Trade Agreements with Korea, Colombia, and Panama, these FTAs hold the promise to boost U.S. exports and support tens of thousands of American jobs.
Free trade agreements have a proven, positive economic benefit in California. Nearly 35 percent of California’s 2010 exports were to countries with which the United States has a free trade agreement. Exports to one free trade agreement partner, Chile, have increased by 272 percent since that trade agreement was enacted in 2004.
President Obama has made sure that these deals with Korea, Colombia, and Panama are fairer for American workers and businesses, hold our partners accountable to keep their promises, and also reflect core American values on key issues like the worker rights and protection.
Advancing Trade Adjustment Assistance with these pending pacts is the right thing to do – because a balanced trade agenda recognizes the tough realities of trade for some Americans, even as we seize trade’s opportunities to create jobs here at home.
America can and must do both.
This past decade saw the slowest average annual job growth since World War II, and that is still true even if you stop measuring before the beginning of the recession in 2008.
It’s easy to understand why. During the last decade, the United States has experienced increased competition from other industrialized nations. It is time, really past time, for us to flex our muscles and improve our nation’s economic competitiveness.
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