Under Secretary of Commerce For International Trade Francisco SÁnchez
SMC3 Connections 2012 Conference
Wednesday, June 27, 2012
As prepared for delivery
Thank you, John (Caltagirone), for that kind introduction.
And my thanks to the entire SMC3 team for your leadership and work.
It truly is a pleasure to join you today for a number of reasons.
First, it’s always great to be out of Washington, DC.
It is getting hot there — and I’m not talking about the weather.
Second, and most importantly, this event gives me the opportunity to say thank you.
- for all your contributions to the transportation and logistics industry;
- for linking American-made goods with buyers all over the world;
- for helping businesses succeed; and
- for fueling economic growth.
You are doing important work at an important time.
As you know, recent years have been difficult.
Five years ago this month, news broke that two Bear Stearns hedge funds were in trouble.
They had made large bets on subprime securities.
And those investments were losing big.
As a result, Bear Stearns was in trouble.
And many wondered what was in store for the financial industry and the overall economy.
Now we know the answer.
The financial system was brought to the brink of collapse.
What began as a crisis on Wall Street soon spread to Main Street.
People lost jobs.
People lost savings.
People lost homes.
People lost hope.
When President Obama took office in 2009, the economy was losing 800,000 jobs a month.
It was the worst economic crisis since the Great Depression.
That’s why the President has made the economy his top priority.
And a central part of this effort is boosting U.S. exports.
One reason why is because American-made products are the best in the world.
They are innovative and dynamic.
And they are in demand all over the globe.
Exporting helps meet this demand.
A second reason is because the times are changing.
When you and I grew up, competition for a business was across the street or across town.
Now it’s across the world.
That’s the reality of today’s economy.
Many view this as a scary development.
However — as I travel around the country — my message to businesses is to embrace this change because it’s an opportunity.
Outside of our borders, you’ll find:
- 95 percent of the world’s consumers;
- roughly 80 percent of the world’s growth through 2015, according to the IMF;
- and 80 percent of the world’s purchasing power.
So I tell businesses that exporting provides an opportunity to reach:
- more customers;
- be a part of more growth;
- and access more consumer dollars.
These are opportunities they can’t afford to ignore.
One final reason that boosting exports is a part of the President’s economic agenda is that they generate a wide-range of benefits.
I know I don’t have to tell you this.
You experience these benefits every day.
When businesses make sales in an overseas market, it means more business for your industry.
It also means more revenue for the company making the sale.
And that can be used to expand a business and hire workers.
- fuel growth;
- strengthen businesses;
- and impact jobs.
Yet just a small percentage of U.S. businesses export.
And of those that do, 58 percent export to just one market.
We can, and should, do better.
That’s why President Obama launched the National Export Initiative in 2010 with the goal of doubling exports by the end of 2014.
We’ve had great success thus far.
Last year, the total value of U.S. exports reached $2.1 trillion, which is an all-time record.
These U.S. exports supported nearly 10 million jobs at a time when people need them.
This is an increase of 1.2 million jobs since 2009.
Chicago played a big part in this success.
According to the latest data, the Chicago metropolitan area is the 7th largest export market in the United States, with merchandise shipments totaling nearly $34 billion.
And I commend Mayor Emanuel for his commitment to building on this progress and continuing the Chicago success story.
And of course, I value the role all of you have played.
You have been a big part of our export success.
Whenever a business makes a sale, that’s just one part of the story.
The other part of the story is that the product has to be made, often with parts shipped from other areas.
Then that product needs to get to its destination — safely and on time.
You make that happen.
You are playing a big role in boosting U.S. exports, and fueling our economic recovery.
And I want your industry to have even more success.
We are working towards these goals in a number of ways, all of which are guided by a motto we share at the Department of Commerce, and that’s “to build things here, and sell them everywhere.”
One of our key missions is to support U.S. manufacturing.
Throughout history, manufacturing has been instrumental in building the middle class.
It has been vital to our nation’s economic development.
And we’ve got to ensure it’s a vital part of our economic future.
Because manufacturing matters.
Manufacturing matters because it creates more economic activity than any other sector.
Manufacturing matters because it is responsible for 70% of the private-sector research and development, and 90% of the patents in this country.
Manufacturing matters because it supports good, stable jobs that pay — on average — 17% higher than non-manufacturing jobs.
Clearly, manufacturing is a key to an American economy built to last.
And it’s encouraging that, under the President’s leadership, the sector is the strongest it’s been since the 1990’s.
Manufacturing employment has risen by nearly half a million jobs over the past 28 months.
To keep the progress going, the Obama Administration is taking steps to strengthen U.S. manufacturing.
- a Commerce program that works directly with local businesses to help them become more innovative and competitive;
- the President’s proposal to drop the corporate tax rate to 28 percent — with an effective rate of 25 percent for manufacturers;
- and the President’s call for Congress to start rewarding companies who bring jobs back to America with lower taxes, and pay for it by eliminating tax incentives for those that ship jobs overseas.
A stronger manufacturing sector will strengthen your industry and strengthen the American economy.
And we want to see the sector thrive, and build as many innovative products as possible.
And once these products are built, we’ve got to sell them in markets across the globe.
You play a central role because you move products.
We are doing our part in a number of ways.
One way is by raising awareness.
At the Department of Commerce, we have tremendous resources to support businesses, specifically our talented staff located in more than 100 U.S. cities and more than 70 countries.
They know the markets and export process.
And they stand ready to help U.S. businesses.
We are also helping by increasing opportunities in the global marketplace.
Under President Obama’s leadership, there have been some significant victories.
Last year, the President signed legislation to implement three trade agreements with Korea, Colombia and Panama.
As a result, American businesses now have unprecedented access to these important markets.
The U.S. – Korea Trade Agreement went into effect in March.
On that day, thousands of U.S. tariffs on U.S. exports to Korea were eliminated.
Estimates are that this will lead to billions more in exports, and support an additional 70,000 jobs.
So the trade agreement results in more exports and more jobs.
That’s a great deal.
The same can be said for the Colombia trade agreement, which took effect in May.
American businesses have new access to the third largest economy in South America.
80 percent of U.S. exports of consumer and industrial products to Colombia are now duty-free.
And these opportunities will increase even more when the Panama trade agreement takes effect later this year.
In addition to these trade agreements, we are working to strengthen trade ties in other ways.
One area of interest is Russia.
Right now, there is an outdated law that would prevent the United States from benefiting from Russia's accession to the World Trade Organization.
The Administration has called on Congress to lift it.
If lifted, U.S. businesses will be able to benefit from the lower tariffs and increased access to Russia's rapidly growing sectors.
So Congress should take action as soon as possible.
American companies deserve every chance to succeed.
The Commerce Department works to give them that fair shot in other ways.
As we all know, American companies will always be able to compete overseas as long as the playing-field is level.
However, the sad truth is that it isn’t always level.
To address these problems, the Administration has been committed to taking action in a variety of ways.
One exciting effort is President Obama’s Interagency Trade Enforcement Center.
This is an aggressive, “whole-government” approach to getting tough on trade enforcement.
The Commerce Department plays an important role in it.
We support the Center’s work to build formal dispute settlement cases.
This compliments the work of our own Trade Agreements Compliance Program, which ensures that our partners live up to their end of the deal.
We do all that we can to provide a level playing-field for American businesses.
We’ll always have their back.
We are also doing great work to attract Foreign Direct Investment into the United States.
When investment dollars flow our way, it strengthens communities and ultimately puts more companies in a position to export.
FDI already plays a crucial role in our economy.
U.S. subsidiaries of foreign-owned firms maintain a stock foreign direct investment position in the United States of about 2.3 trillion dollars.
These companies employ more than 5 million U.S. workers, which translates to more than $400 billion in wages.
With these benefits in mind, we want more investment to come to our shores.
So the President has launched the SelectUSA initiative.
Housed in the Commerce Department, it is the first coordinated U.S. government-wide effort to promote and support business investment in the United States.
Our team spreads the word about the desirable market conditions in the American economy, including:
- a hardworking and educated workforce;
- relatively low taxes;
- and, of course, access to an incredible consumer base.
Then they assist potential investors in any way they can.
And they’re eager to do so to strengthen communities and benefit businesses.
That outcome, along with our support of manufacturing, our work to raise awareness and increase opportunities, and our efforts to attract foreign investment will go a long way in boosting U.S. exports.
And you are a key to this work.
You are working at the ground level, ensuring that U.S. products get into the hands of foreign customers.
And any disruptions to your work results in delays and extra costs that American businesses can’t afford.
That’s why we are proud to work with your industry to improve the flow of exports.
Over the past several years, Commerce has engaged with America’s carriers, logistics providers, ports and supply chain users.
You have told us that the declining state of our infrastructure is an increasing challenge.
You have said that long-term freight system deficiencies hinder our goods movement and trade flows.
Again, we can, and should, do better.
Our nation must improve the connectivity and efficiency of our supply chain infrastructure.
Doing so will achieve the seamless freight movement that U.S. exporters need to remain competitive in global markets.
In recognition of this concern, the Commerce Department has established an Advisory Committee for Supply Chain Competitiveness.
It will advise the Secretary of Commerce about your issues, and more.
The Committee will be comprised of a wide variety of interests and stakeholders, including:
- service firms;
- trucking firms;
- and ports.
We are working very closely with the Department of Transportation and other Federal agencies as part of this effort.
The Committee is a key piece of a whole-of-government approach to supply chain competitiveness that we are now developing.
More information on the Committee will be announced soon.
In the meantime, please know that we have a laser beam focus on these issues.
We recognize that the transportation and logistics industry is a key part of the work to:
- buy products.
- build products.
- move products.
- and sell products.
That’s why I want to work with you to:
- sharpen our nation’s competitive edge;
- generate growth for U.S. businesses;
- and support jobs for the American people.
Together, we can do great things.
Together, we can expand the doors opportunity.
And together, we strengthen your industry, and the nation’s economy.
So let’s get to work.
Once again, my thanks to SMC3 for inviting me to be here today.
I’d be happy to answer any questions you may have.
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