Under Secretary of Commerce For International Trade Francisco SÁnchez
Latin Builders Association Monthly Luncheon
Friday, December 2, 2011
As prepared for delivery
Good afternoon and thank you all for that kind reception.
It’s always great to be out of Washington, D.C., and back in Florida. Warm weather. Warm memories. And, a warm welcome from so many friends and partners. It’s good to be home.
I want to thank Bernie Navarro for that introduction and for inviting me today. Bernie — I know that increasing international trade is a big part of your agenda. And I look forward to working with you to achieve this goal.
I also want to thank Gilberto Neves — President and CEO of Odebrecht USA — the sponsor of today’s luncheon. I appreciate all that you are doing to strengthen the economic bonds between the U.S. and Brazil.
I also want to recognize my friend — Freddy Balsera — for helping to put this event together. And, let me also congratulate him for being nominated to serve on the U.S. Advisory Commission on Public Diplomacy. He’s most deserving of this recognition.
Finally, I want to thank the Latin Builders Association for all its valuable work. For the past 40 years — the members of this organization have: shaped skylines; built neighborhoods; and made a significant impact on the South Florida area.
And — in doing this work — you’ve established yourselves as more than business leaders. You are also community leaders. You are agents of change. And, you exemplify just how important entrepreneurship is to our country and its future.
After all, entrepreneurs often generate the best new ideas. Entrepreneurs often serve as the leaders of every new period of growth.
Quick example — according to the Small Business Administration — small firms accounted for 65 percent of the 15 million net new jobs created between 1993 and 2009. And — every day — entrepreneurs strengthen our economy and the quality of life in our neighborhoods.
So, it’s great to be here today with LBA. We come together at a critical period in history.
When President Obama took office in 2009, he inherited an economy that was on the brink of collapse. Eight hundred thousand jobs were being lost a month. It seemed as if every day brought news of another crisis in banking, in housing, or on Wall Street.
But — thanks to the President’s leadership — we are no longer on the brink. In fact, the United States has had 21 straight months of private sector growth. And — just this morning — it was announced that the U.S. added another 120,000 jobs in November.
But, the road to recovery is not finished. There is still a long way to go. Too many people are looking for work. Too many families are struggling to get from one day to the next. Too many businesses are having difficulty making payroll.
I know I don’t have to tell you about these problems. You see them every day.
That’s because the Latino community has been hit especially hard. The Latino unemployment rate is still significantly higher than the national rate. And, economic troubles have taken a big toll on our community.
Pew recently found that — from 2005 to 2009 — the median net worth of Latino households fell 66 percent — the most of any group. This is clearly a disturbing trend. And, I know that you are as concerned about these developments as I am.
That’s because no community can ever reach its full potential without opportunity. No person can ever achieve the full benefits of citizenship without economic empowerment. This isn’t just true for Latinos. It’s true for all Americans — and all citizens of the world.
Over the past year — our television screens have been filled with images of unrest and uprisings. While every situation is different — there’s no question that much of what we’ve seen has been fueled — at least in part — by dire economic conditions. Too much poverty. And too few jobs.
Take Tunisia. According to the World Bank — nearly half of recent college graduates in Tunisia couldn’t find a job 18 months after graduation. But, what we’ve seen is that the yearning for opportunity and dignity cannot be denied. And — as a result — Tunisia sparked the Arab Spring earlier this year.
While these circumstances differ from what’s occurring in the United States — the basic idea holds true here. It is common to see instability whenever economic resources are limited because: optimism is scarce; hope is denied; and the doors to opportunity are closed.
Children can’t learn if their schools can’t afford basic school supplies. Families can’t thrive if they can’t afford a roof over their heads. Communities can’t grow if its foundation is built on joblessness and homelessness — and other conditions that result from poverty.
That’s why creating jobs has been President Obama’s priority. It’s about more than just numbers. It’s about people. And, at the center of this agenda is the work to increase U.S. exports by strengthening our commercial relations with the rest of the world.
That’s where I come in. I currently serve as the Under Secretary of International Trade at the Department of Commerce. It’s a privilege to serve and give back to a country that has given so much to me.
And, I really enjoy my work because — at its core — my job is about giving American businesses new opportunities — at a time when opportunities are hard to find. And, this is important work.
Every time a firm expands into a new market, it increases their customer base, which increases the chance of sales, which increases the chance of hiring workers. In fact, every billion in exports supports 5,500 jobs. And obviously — when people are working — it strengthens local economies and fuels healthy community development.
Recognizing the importance of the export economy, President Obama launched the National Export Initiative nearly two years ago. The goal is to double U.S. exports by the end of 2014. We’ve had tremendous success.
Some quick stats: Exports were up roughly 17 percent last year; they contributed to nearly half the growth in the U.S. GDP; and, they supported 9.2 million jobs.
Now, I know I don’t have to tell you about the benefits of trade. In the first half of 2010, the Miami metropolitan area was the fifth largest export market in the United States — with sales totaling nearly $17 billion. In addition, it accounted for more than 65 percent of Florida’s merchandise exports during the same time period.
Clearly, exports are one pillar of the local economy. Another pillar is the work you do — construction. In 2010, private non-residential construction spending in Florida totaled more than $8.2 billion — a significant number, even in these challenging times.
So — in order to maximize our potential — we’ve got to find ways to bring these two pillars together. This will increase international trade, support jobs, and strengthen communities.
First, let me once again thank Bernie — and so many of you — for recognizing the importance of trade. Really, it’s all about math.
Ninety-five percent of the world’s customers live outside our borders. And, the IMF estimates that 85 percent of the world’s growth over the next five years will take place overseas. Yet — despite this reality — only 1 percent of U.S. companies export. Of those that do — only 58 percent export to one market.
And, remarkably, 7 out of 10 Americans don’t even have a passport — according to a piece I saw on CNN.
In this new environment, we can’t limit ourselves to looking inward. We’ve got to look outward. We’ve got to expand our economic imagination. And, organizations like LBA should be at the forefront of the export economy.
Your cultural ties, your bilingual skills, and your familiarity with markets overseas — especially in the Western Hemisphere — makes for a natural expansion for your businesses.
And, I realize I don’t have to tell you about the tremendous opportunities out there. I know that the members of the LBA recently participated in a Brazil trade mission with Governor Scott.
A few months ago, the U.S. Commercial Service — an arm of the International Trade Administration — hosted roughly 115 Florida companies and institutions in Sao Paulo. While we’re still waiting on final numbers — the State estimates that it will result in roughly $74 million dollars in total sales for Florida companies.
I had the pleasure of traveling to Brazil on official businesses back in October. And, the opportunities — especially for U.S. construction firms — are truly incredible.
As many of you know, Brazil has won the rights to host both the 2014 World Cup and the 2016 Olympics.
These developments — on top of strong economic growth and an expanding middle class — has pushed infrastructure to the top of the country’s priorities. Games-related investment over the next five years may reach $106 billion in infrastructure, construction, transportation systems, port improvements, and more.
Clearly, there are an abundance of opportunities for U.S. products and services to help with this development. And, I want to let all of you know that our Commercial Service team stands ready to help you identify these possibilities in the Brazilian market.
Of course, we recognize that a good partnership can only happen if the benefits flow both ways. For example, I support the concept of Odebrecht's Airport City project in Miami — and applaud all the economic benefits estimated to come from it.
And, I’m energized by the fact that the partnership between our two countries is so strong. The United States enjoys a strong commercial relationship with Brazil — representing nearly $60 billion in bilateral goods and trade in 2010.
We want to have this kind of success across the Western Hemisphere. And, again, I want to emphasize that we believe that removing the barriers that block access to opportunity is a key to this work.
That’s why we are committed to eliminating obstacles to freer and fairer trade with countries. As was the case with the three trade agreements that recently passed with Panama, Colombia and South Korea.
Now, this work isn’t always easy. For example, passing these agreements took longer than we wanted. But, they eventually passed with bi-partisan support.
There was a clear recognition that — when implemented — these agreements will support tens of thousands of American jobs, and help provide a level playing field in three significant international markets for U.S. firms.
For example, Colombia is the third largest economy in South America. The trade agreement will provide significant new access to a $166 billion services market. And, Panama is one of the fastest growing economies in Latin America — with annual growth above 5 percent expected through 2015.
The agreements help U.S. businesses become a part of this growth. The bottom line is that trade agreements are good for businesses and good for jobs.
And, as I look over the landscape — it’s clear that countries in the Western Hemisphere make for a natural partnership. We are linked by geography, common values, and mutual interests. We should work together to build a brighter future for all our peoples through trade.
From the U.S vantage point, exporting is essential to our economy especially at a time when common sense proposals — like the American Jobs Act — which in the past have received bi-partisan support — are stalled in Congress.
It’s hard to believe that a plan which independent economists say would create up to 2 million jobs would be blocked because politics are being put before people.
These proposals include giving tax breaks for small businesses so that they can hire more workers and providing relief for those struggling to pay their mortgages, which would bolster the housing market.
In addition, the President has proposed $50 billion in infrastructure investments. The President’s plan includes:
- $2 billion to modernize airports;
- $9 billion to improve rail systems; and
- $27 billion to make our highways more efficient
This effort alone is predicted to enhance our competitiveness and create hundreds of thousands of jobs across the nation and here in Florida.
Two quick examples: In this state alone, we are talking about nearly 1.6 billion in investments in transit infrastructure that could support more than 20,000 jobs as well as nearly $1.3 billion in school infrastructure to support nearly 17,000 jobs.
Yet, the American Jobs Act remains stalled in Congress.
But, the rest of us can’t sulk or retreat to the sidelines. As President Obama has said, we can’t wait for Congress to take action. That’s why he has taken a series of measures to get our economy moving — from cutting waste — to lowering student loan payments.
He’s also working to continue streamlining regulations to eliminate any unnecessary red tape facing businesses.
As part of this work to spark this economy, I am committed to strengthening our commercial diplomacy in order to remove trade barriers, increase exports, and open new doors of opportunity.
I look forward to working with many of you to sharpen our competitive edge, generate growth for U.S. businesses, and support jobs for the American people.
And, you have my commitment that we will continue to come together — in continued partnership — to bring us steps closer to that timeless goal of giving every person a fair chance to prosper and advance in life.
Once again, my thanks to Bernie — and all of you with the Latin Builders Association — for inviting me to speak with you today.
I’d be happy to answer any questions.
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