Assistant Secretary of Commerce Nicole Y. Lamb-Hale
Manufacturing and Services
2012 Diverse Manufacturing Supply Chain Alliance National Education and Training Conference
Wednesday, March 7, 2012
Delray Beach, Florida
As prepared for delivery
Good evening. I would like to thank David Burton for that kind introduction and the Diverse Manufacturing Supply Chain Alliance for inviting me to speak here today. I would also like to acknowledge and recognize Joe Anderson, the Chair of our U.S. Manufacturing Council, one of the Obama Administration's private sector advisory committees, who will be presenting to you tomorrow and Jay Williams, the Director of the Office of Recovery for Auto Workers and Communities, from whom you heard this afternoon.
It is wonderful to be in a room full of manufacturers and service providers. It’s like being home. When I practiced law in Detroit before joining the Obama Administration in 2009 my clients were companies like yours. So, it’s extra special for me to be here with you today.
I'd like to cover three areas in my remarks this evening: 1.) the Obama Administration’s National Export Initiative; 2.) what we are doing at the International Trade Administration to help U.S. manufacturers to export; and 3.) finding more ways that we can work together to increase the competitiveness of America’s exporters.
But first let me review a bit of history with you. In 2009, when the President took office, the nation faced a historic economic crisis. Bear Stearns and Lehman Brothers collapsed. The financial system was in trouble. This sent a ripple effect throughout the entire economy.
The automotive industry, an industry near and dear to me being from Detroit, was on the verge of collapse. Communities all over the United States — like many in my home state of Michigan — were devastated by foreclosures. Streets were lined with storefronts covered with “Going Out of Business” signs. It was indeed an uncertain time.
In fact, in the six months before President Obama took office, 4 million jobs were lost. Another 4 million jobs were lost before his policies were put into place.
But, under the President’s leadership, we are now moving in the right direction.
A lot of good things are happening.
We’ve had 23 straight months of private sector growth. In total, this growth has resulted in 3.7 million jobs. Manufacturing is leading our recovery. American manufacturing is creating jobs for the first time since the late 1990s. The American auto industry is back. Indeed, GM is the number one automaker again. These are positive signs. But, make no mistake; we know that the work we've begun is not finished. There is still a long way to go.
And, as we look ahead, we’ve got to build a stronger and healthier economy. We can’t go back to the old days when growth was fueled by financial bubbles. Instead, we’ve got to build an American economy that's built to last.
That was President Obama’s message in his State of the Union Address in January.
An economy built to last is built on the foundation of American energy, skills for American workers, a renewal of American values, and a renewal of American manufacturing. Let's focus on American manufacturing.
Why is a renaissance of American manufacturing essential to the foundation of an American economy built to last? Because, in two simple words: manufacturing matters.
Manufacturing matters because manufacturing supports good, stable jobs for millions of Americans. Manufacturing matters because it creates more economic activity than any other sector. It matters because manufacturing accounts for nearly 60% of our nation’s exports.
Manufacturing matters because it is responsible for 70% of the private-sector R&D in this country; and it matters because we need manufacturing to sustain an industrial base that can make the things we need to guarantee our nation’s security in an uncertain world.
And American manufacturing matters because American made products are synonymous with quality and value and our products are and will continue to be in demand all over the world. U.S. businesses have to be ready to seize this opportunity by selling their goods to customers abroad. Exporting in today’s business environment is an essential tool for U.S. manufacturers. In the words of our new Secretary of Commerce, John Bryson, we need to “build it here and sell it everywhere.” And why should we sell what we build everywhere, and not just in our domestic market? Because 95% of the world’s customers live outside of our borders. So, looking at the math, the logic is crystal clear – for a business to fulfill its maximum potential, it has to go where the customers are. U.S. businesses must sell their products and services in international markets.
To that point, I want to share a story with you of which I wrote in a recent Op-Ed article in the Chicago Tribune that illustrates the importance of exporting.
Quality Float Works, Inc., a member of our U.S. Manufacturing Council with Joe Anderson's company, TAG Holdings, is a small U.S. manufacturing company located in Schaumburg, Illinois. Founded in 1915, Quality Float Work’s products are found in everything from gas pumps to aircraft carriers.
Following the September 11th tragedy, Quality Float Works recognized that product and market diversification were necessary for the company to survive. In 2003, Quality Float Works developed a product that could be used in the water purification process around the world. That innovation, together with increased marketing efforts abroad, opened up new international markets for the company. Today, Quality Float Works exports to more than 40 countries. And Jason Speer of Quality Float Works will tell you that exporting was key to his company's survival during our recent economic downturn.
We need more companies like Quality Float Works. You may be surprised to know that only 1% of U.S. businesses export – yes 1%
Given where the customers are, more needs to be done. President Obama recognizes this. That’s why 2 years ago, in his State of the Union address, he launched the National Export Initiative, commonly known as the NEI, with the goal of doubling exports by the end of 2014. And, as Assistant Secretary for Manufacturing and Services in the International Trade Administration, it’s my job to help make it happen.
When the NEI was announced there were some naysayers, but we’re on the track to meet our NEI goals. Exports need to grow15% annually to achieve the NEI goal. We are already seeing the positive results of the NEI and its impact on our economy. Cumulative exports over the past twelve months compared to the level of exports recorded in 2009 have been growing at an annualized rate of 15.6% a year, a pace greater than the 15% required to double exports by the end of 2014. Exports of goods and services over the past twelve months exceeded $2.1 trillion, 33.5% above the level of exports in 2009.
Now, what is the NEI?
The NEI is the first Presidentially led, whole of government approach to increasing our nation’s exports. The President has established five pillars of the NEI which are:
Improving advocacy and trade promotion;
Increasing access to export financing;
Removing barriers to trade;
Enforcing our trade rules; and
Promoting strong, sustainable, and balanced growth globally.
With that backdrop, I’d like to tell you what ITA, and my unit, Manufacturing and Services, are doing in support of the NEI.
Manufacturing and Services, -- the unit which I lead -- is one of four units in the International Trade Administration, otherwise known as ITA. Our mission is to “advance the international competitiveness of U.S. industries by leveraging our in-depth sector and analytical expertise in the development and execution of trade policy and promotion strategies”. Our vision is "U.S. Industries succeeding internationally."
In this regard, the Manufacturing and Services unit is uniquely positioned to leverage the power of the U.S. Government to help you enhance your ability to compete globally.
We employ more than 150 industry experts and economists who understand, monitor and advise policy makers on the drivers of U.S. industry’s competitiveness.
Now I want to focus in particular on 3 pillars of the NEI: improving advocacy and trade promotion, removing barriers to trade, and enforcing our trade rules, and the work that ITA is doing to support them.
Pillar 1 – Improving Advocacy and Trade Promotion
Trade promotion and advocacy for U.S. businesses are two key components of our NEI strategy.
We are approaching trade promotion in much the same way as the global product managers in your companies do – strategically. The foundation of our efforts is our sector/market strategies. Developed in partnership with industry and agencies across the federal government, we have developed and are implementing strategies in sectors where U.S. products are globally competitive, in markets with great demand for U.S. products and where U.S. government support can be impactful. Thus far, we are developing strategies for 12 countries including Brazil, India, and China, and 32 sectors including aerospace, auto parts, and building products. Based upon these strategies, we have developed trade promotion activities, including trade missions.
In fact, since the implementation of the NEI, Commerce has coordinated 77 trade missions to 38 countries with more than 1,000 companies participating. Participating companies have secured more than $1.25 billion so far in export sales as a direct result of these trade missions. Trade missions are in addition to the day-to-day services we offer U.S. companies in our domestic and international branches, such as tailored matchmaking and consulting services, international company profiles, and international partnership searches.
With respect to advocacy, in 2011, ITA’s Advocacy Center helped U.S. companies win 49 overseas projects worth $29 billion, with U.S. export content of more than $20 billion, supporting more than 111,000 jobs.
Advocacy can take many forms. For example, in the fall of 2010, the Department of Commerce convinced the Chinese Government to eliminate local content requirements on wind turbines at the U.S.-China Joint Commission on Commerce and Trade.
Previously, China required that wind turbines installed in China meet a minimum 70 percent local content requirement, which prevented U.S. companies – both large and small – from taking advantage of the fast-growing Chinese wind market.
By successfully eliminating this trade barrier, U.S. companies now have access to the fastest growing wind market in the world, allowing U.S. companies to sell component parts, large turbines, and innovative wind turbine designs.
So, please keep our ability to advocate for you in mind, especially if your company is interested in expanding into new markets and faces issues that we can take directly to a foreign government and help “level the playing field” for you.
Pillar 2 – Removing Barriers to Trade
We are deeply committed to opening the markets that matter most for U.S. industry. Through advocacy and trade diplomacy we also work on behalf of individual U.S. companies to persuade governments to provide equal access and honor trade commitments.
In some priority markets we use “dialogues” through high level government meetings such as the India Trade Policy Forum, Transatlantic Economic Council, and bilateral forums with China.
For others, we have utilized high level interactions between business leaders through dialogues such as the U.S. Brazil CEO Forum. These dialogues and working groups are important tools for ensuring a level playing field for U.S. exporters and service providers.
Pillar 3 - Enforcing Our Trade Laws
As we work to open new markets, we must ensure that our exporters have the opportunities they have been promised in existing trade agreements. Robust enforcement is both a short-term and long-term priority and an effective way for the Federal Government to help increase exports.
We are committed to redoubling our efforts to rigorously monitor and enforce existing free trade agreements to help ensure a level playing field for U.S. exporters.
Addressing unfair foreign trade practices is a critical priority for the Commerce Department. For example, ITA's subsidies enforcement activities directly benefit U.S. manufacturers by preventing or remedying the harm that foreign government subsidies can cause to U.S. manufacturers. In FY2011, ITA monitored over 700 foreign unfair trade practices, including foreign government subsidies, and took steps to address almost 200 of those practices. Consistent with this focus, in his January 24, 2012, State of the Union Address, President Obama called for the creation of a new trade enforcement unit that will significantly enhance the Administration’s capabilities to aggressively challenge unfair trade practices around the world. In fact, just last week on February 28th, President Obama issued an Executive Order announcing the establishment of the Interagency Trade Enforcement Center (ITEC). The Center will serve as the primary forum within the Federal Government to coordinate matters relating to the enforcement of U.S. trade rights under international agreements and enforcement of domestic trade laws. The newly-created ITEC will be located within USTR and will coordinate with the Departments of State, Treasury, Justice, Agriculture, Commerce, Homeland Security, National Intelligence and other agencies as the President or the USTR may designate. The ITEC Director will report to the USTR. The Center’s Deputy Director and a Commerce official will be detailed to the ITEC and report to the Director.
I have mentioned many policies and programs that the Department of Commerce leads. But understand that the Obama Administration appreciates that by themselves, these policies and programs will not create jobs. In order to be successful, we need to stimulate a new wave of private sector investment and innovation that will help our mature industries adapt and our new industries grow.
That’s why we’re doing everything we can to revitalize American manufacturing without interfering in private enterprise. We’re not interested in picking winners and losers. We don’t intend to substitute our judgment for yours.
That’s why events like this one are so important. Without us, your businesses would be at a definite disadvantage in the global marketplace; without you, our programs would be worthless. So we need to work together—private sector and public sector, business and government—to revitalize American manufacturing. Because although we may have our differences, I can tell you for sure there’s one thing we all agree on: manufacturing matters and is the key to an America built to last.
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