Under Secretary of Commerce For International Trade Francisco SÁnchez
Presentation of Peace Through Commerce Award
Followed by Keynote Address
American Chamber of Commerce in Hong Kong
Tuesday, October 18, 2011
As prepared for delivery
Good afternoon and thank you for that kind introduction, Rob. I also want to thank your president, Richard Vuylsteke, and all those who helped organize this event today.
It truly is a pleasure to be with so many friends and partners. I’m excited to be here. That’s because progress often starts at gatherings like this.
Case in point: Last November at a similar AmCham Hong Kong luncheon. My Assistant Secretary, Suresh Kumar, sat with Fred Lam, Executive Director of the Hong Kong Trade Development Council, to sign a landmark agreement to strengthen the economic ties between America and Hong Kong.
It’s because of this groundbreaking partnership, and his decades of service, that Fred has been selected as a recipient of the Peace through Commerce Medal.
Peace Through Commerce Award Presentation
I’m proud to present this honor to him today. But before I do, allow me to say a few words about him and his work.
Let me start by saying how struck I am that today’s lunch brings together leaders — not just from Hong Kong’s business community — but also from the American chambers in Macau and Guangdong.
It’s precisely this city’s unique capacity to link people and commerce that led Fred Lam to envision the Pacific Bridge Initiative. The PBI, as we know it, is a novel framework designed to promote President Obama’s National Export Initiative, which strives to double U.S. exports by the end of 2014.
The PBI has been a win-win collaboration. It’s helped us exceed our NEI goals. And, it’s supported Hong Kong’s efforts to be the pre-eminent commercial platform for this dynamic part of the world.
Consider that in 2011, the PBI helped triple the number of export transactions done by new-to-market U.S. firms. This is a significant achievement. There’s an old saying that goes: “A wise man will make more opportunities than he finds.”
Clearly, Fred is a wise man because he’s making opportunities, helping others to break new ground and reach new heights. And, make no mistake: These are pioneering efforts.
When the PBI was launched last November, the Trade Development Council became the first statutory trade body outside the United States to promote the NEI on a bilateral basis.
Because of its success, several other trade partners are in the process of adopting similar “Bridge Initiatives” for their own regions.
In fact, I just found out that a “Morocco Atlantic Bridge Initiative” will be signed in a few weeks. See, Fred’s impact reaches as far as North Africa. For his work and more, Fred deserves a lot of praise and thanks. And, I’m so happy to recognize him today.
Now, just to give you some background, the Peace through Commerce Medal honors those who significantly promote and develop U.S. exports. This award was discontinued for a few years, but it has a storied history.
It dates back to the first Secretary of State —Thomas Jefferson — who commissioned the medal in 1790. Jefferson presented the award, then known as the Diplomatic Medal, as a gift to foreign diplomats who aided the Continental Congress during the American Revolution.
Well today, the revolution isn’t happening on the battlefield; it’s happening in the global economy — in the way we work and do business.
Our international partnerships are more important than ever. That’s why I relaunched the award this year. I wanted to recognize our partners abroad. And, Fred Lam has been a tremendous partner, which is why we are honoring him today.
In recognition of his work, it is a privilege to present this Peace Through Commerce Medal to Fred Lam. (Fred Lam Accepted the Award)
I want to begin by saying, again, how great it is to be here. This is actually my second time in Hong Kong. My first visit came after college in the early 1980’s, when I had the lucky opportunity to travel the world.
I always knew I would love it here, and that proved to be true. I have a lot of memories, including riding the Star Ferry.
But, what I remember most is the vitality and energy of the people. I saw up close how committed the people of Hong Kong were to family, community and tradition.
And, they are resilient. Even though the Hong Kong people often lacked resources, they never lacked imagination. It’s incredible to see how far their imagination and hard work has taken this city. Earlier, I had the privilege of taking a helicopter tour.
I can see why Hong Kong is called “Asia’s World City. The skyline is a symbol of innovation and possibility. The development is astounding.
In fact, I was talking with Andrew Wylegala — ITA’s Senior Commercial Officer here. He was telling me that that Hong Kong is special because:
“Where else can you have breakfast at the world’s tallest hotel, then hop into a 30-cent seat on a 100-year old tram system, then exit at the trailhead of a stunning walk along a mountain that leads to a family-friendly beach?”
Not too many places, I would guess. But, as you know, no country, business or government can ever be content with progress. The world’s economy is moving fast. Those that fail to keep sharpening their competitive edge will be left behind.
That’s why, in this challenging economic time, it’s not enough to rebuild. We’ve also got to reinvent and rethink how we do business and where we do business.
President Obama has been doing just that since he entered office in 2009, shortly after the world was crippled by the financial crisis.
In response to the crisis, the President immediately took bold steps, including:
- stabilizing the financial system
- and keeping the American auto industry from going bankrupt
The President’s actions stopped the free fall. As a result, we’ve come a long way. Roughly 2.6 million U.S. jobs have been created in the last year and a half. We’re seeing a comeback in manufacturing and new strength in the clean energy sector. And, consumer spending is rising.
But, there is more work to do. That’s why job creation remains President Obama’s top priority.
Last month, The President sent to Congress “The American Jobs Act.” Independent economists say it would create 2 million jobs by investing in infrastructure and providing tax cuts to small businesses — among other measures.
Now, why am I telling a Hong Kong audience about the “American Jobs Act?” It’s because strengthening the U.S. economy is good for all our partners because our futures are closely linked.
As others have observed — that’s why a newspaper called USA Today dedicates so much coverage to the Asian Markets. It’s because this area of the world impacts the United States and vice versa.
So, passage of the American Jobs Act would be a win for Americans, and all of our partners. That’s why, right now, the President is actively urging Congress to vote on components of the bill and put people back to work.
But, that’s not all we are doing. The Administration realizes that our job-creating efforts shouldn’t be contained to our shores. After all, 95 percent of the world’s customers live outside the United States.
Export growth means job growth, and that’s why President Obama has made the NEI a centerpiece of his jobs agenda. NEI is the first government-wide export promotion strategy with focused attention from the President and his Cabinet — and we’ve had tremendous results.
In 2010, national exports grew nearly 17 percent, reached the second-highest annual total on record and contributed to nearly half of all U.S. economic growth. It also supported 9.2 million jobs.
And, this year, we’re keeping the momentum going. U.S. goods and services exports in the first eight months of 2011 are up nearly 16 percent compared to last year. Our commercial partnerships with the rest of the world have been a key to our economic recovery.
Certainly, Hong Kong has played a central role in this effort. Last year, U.S. merchandise exports to Hong Kong totaled nearly $27 billion. That’s a huge number. And, behind the statistics are real people and businesses doing great things.
Consider Fueltech — a company located in Illinois that has been awarded 9 contracts here worth over $27 million U.S. dollars. Or the sun care company from Florida that cracked 10 new markets in the last two years, all from their Hong Kong regional office.
Successes like this are happening every day. And, remarkably, there is potential to do even more.
That’s due, in large part, to the Hong Kong government’s free trade principles, rule of law and commitment to transparency. Couple that with the efficiency of your infrastructure and the energy of your people and it’s clear — Hong Kong is a place we want to do business.
It serves us well. And, we also want you to do well. That’s why we are so glad that the benefits of our commercial relationship are flowing both ways. In 2009, U.S. direct investments in Hong Kong totaled more than $50 billion, making the United States one of the largest foreign investors in Hong Kong.
And with projects like Google’s $100 million data center, and Hong Kong Disneyland’s expansion set to open soon, that footprint will only grow.
I want to emphasize that we don’t view Hong Kong, and Macau for that matter, as just a key to China. We also view it as a key to America’s future. And, we want to be a part of your future.
That’s why I’m here.
I’m proud to be leading a U.S. trade delegation of 14 American biotech companies. As many of you know, biotech is one of the most promising growth sectors. It has the unique potential to benefit both the economic health and public health of our countries.
And, with our ageing populations, there is clearly a need. The companies with me today can help fill that need. They are at the cutting-edge of development. They have new ideas. They have creative products. They have a lot to offer.
And, Hong Kong is a natural market for them. Hong Kong has a large number of qualified biotech firms. And, it’s emerging as a leading center for bio-medical clinical trials.
Excellent business infrastructure, regulatory linkages into the mainland and a growing venture capital community, all make Hong Kong a promising market and platform for U.S. firms.
Yesterday, our delegates held roughly 60 one-on-one meetings with prospective distributors, public and private buying agents and other potential business partners. You have a great market here. The U.S. companies present today have great products.
Let’s link them. Let’s match the supply with the demand. Together, by building each other’s biotech industries, we can achieve a double bottom line: Benefits for both the health and wealth of our peoples.
I urge you all to get to know one another. Let’s do business; that’s our motto — not only here in Hong Kong — but all across the Asia-Pacific region.
And lately, there’s been a lot of good news. Last week, the United States Congress approved three trade agreements — including one with South Korea.
It goes without saying: this is a big deal. In fact, it’s the most significant trade agreement for the United States in more than 16 years. Korea is our 7th largest trading partner. We want to build on this success when the agreement is entered into force.
For the United States, this agreement will:
- support tens of thousands of American jobs.
- eliminate Korean tariffs on 95% of U.S. exports of industrial and consumer goods within five years.
- and immediately eliminate Korean tariffs on over two-thirds of U.S. agricultural exports.
I’m so glad that President Lee Myung-bak was in America last week to help celebrate this milestone.
In fact, I don’t know how many of you saw this, but he and President Obama visited an auto plant in Detroit.
And, President Lee pledged to the workers that the agreement will not take away any of their jobs. Rather, it will create more jobs for them and their families.
So, it’s clear — for both countries — this represents a great opportunity to increase trade, support job creation, bolster our economies and strengthen a vital strategic alliance in the Asia-Pacific region.
Looking ahead, The United States wants to continue to strengthen our economic partnerships with the region. I want to highlight two of our big initiatives.
First, as most of you know, the United States is hosting APEC in 2011. We consider this an honor and a privilege. And, we are working diligently to make positive things happen.
Throughout the year, we’ve been guided by three major themes:
- One, to strengthen regional economic integration and expand trade, supporting jobs and growth for all parties.
- Two, to promote clean and renewable energy technologies, which have the potential to produce extraordinary growth.
- And three, to advance and expand regulatory cooperation.
In the regional context, we want to strengthen the industries of the future.
And, we want to empower entrepreneurs —especially small and medium-sized business owners — with the tools and support to succeed throughout the APEC region.
In May in Big Sky, Montana, I chaired the APEC SME Ministerial Meeting.
In this meeting, we endorsed further APEC actions to address the top nine trade barriers — including:
- lack of financing
- and complex customs procedures around the Asia-Pacific region.
At the end of our APEC host year, we will be ready to announce concrete progress on these barriers.
- the conclusion of agreed APEC-wide business ethics principles for various industry sectors
- And better avenues for small and mid-sized firms around the region to take advantage of international opportunities.
These efforts will pay significant dividends in the long-run. We plan to conclude the year on a high-note.
In Honolulu, the APEC 2011 USA Host Committee will hold a CEO summit that will assemble roughly 1500 senior executives — from the Asia-Pacific region — to address the obstacles and opportunities presented by the global economy.
And, President Obama will host an APEC Economic Leaders Meeting that will provide our leaders with an opportunity to discuss expanding free trade on a regional basis. So, we’re committed to making our APEC host year a productive period for all parties.
Another top-line item on the trade policy agenda is the Trans-Pacific Partnership. TPP negotiators are seeking to conclude an ambitious, 21st century Asia-Pacific trade agreement that reflects U.S. priorities and values.
Working with our partners, we intend to craft a high-standard agreement that addresses new and emerging trade issues and challenges.
We see the TPP as the most credible pathway to Asia-Pacific regional economic integration.
We are pleased with the progress in the TPP negotiations to date.
We have already completed a number of rounds of negotiations this year.
With all the TPP partners committed to concluding the negotiations as quickly as possible, we are optimistic we’ll be able to make some announcements in Honolulu when the APEC leaders meet in November.
We are also involved in other initiatives. But I want to leave time for some Q&A. So, I’ll just close with a few of the key messages I want to leave you with.
First, we commend your government and business community.
Hong Kong has become a global beacon for:
- the benefits of free and fair trade
- for rule of law
- for intellectual property protection
- and for dynamic, private-sector driven development.
It’s an example that others should follow. We applaud your efforts and value the bonds of trust we share.
Second, we value Hong Kong as a partner. We appreciate the role that it has played in our economic growth.
Finally — even though we’ve had great success together — we have the potential to do much more. One example is the biotech sector. We want to work with you to achieve this promise.
In this 21st century global economy, it makes both business sense and common sense to work in partnership. And, this work must be guided by mutual interests and values.
As I said earlier, my first visit to Hong Kong was roughly 30 years ago; so much progress has happened since then.
And, I look forward to working in partnership with all of you to ensure that the next 30 years brings us closer to the goal of opportunity and prosperity for all.
Once again, thank you to the AmCham of Hong Kong — and all of today’s organizers — for hosting me.
I’d be happy to take questions.
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