Under Secretary of Commerce For International Trade Francisco SÁnchez
Remarks by Under Secretary Francisco Sánchez
The City Club of Cleveland
"Resurgence of American Manufacturing"
Tuesday, October 2, 2012
As prepared for delivery
Thank you very much, Kim (Smith), for that kind introduction, and for the great work you are doing at Pipe Line Development.
I’d also like to thank: Mike Miller, Susan Whitney, and all my colleagues from the Commerce Department for their contributions.
Please allow me to also express my appreciation to the Northern Ohio District Export Council, the International Business Network, Cleveland State University and the International Trade Assistance Center. Each played a big role in making today happen.
And of course, I want to thank all of you in the audience for joining us today. It’s a great pleasure to be here at The City Club of Cleveland, especially as it celebrates its 100th Anniversary.
Through the years — it has served as a valuable forum to debate and discuss the great issues of the day. And I appreciate this chance to talk about some of the great issues of our day: putting people back to work; helping American businesses succeed in this new global economic environment; and strengthening the manufacturing sector;
This work is important to me personally. My father was a manufacturer. He ran a candy factory in Spain, always working to make payroll; always striving to ensure the product was the highest quality, always focused on delivering those products to customers on time.
So I’ve always valued this work. And I’ve always valued the important role that manufacturers play in communities creating jobs and fueling economic development.
Every day, this is happening across our country. So when the naysayers say that manufacturing is a thing of the past, I say tell that to the Bionix Development Corporation in Toledo. Tell that to Codonics in Middleburg Heights. Tell that to Jet Incorporated in Highland Heights.
These are three manufacturing companies that I have, and will be visiting throughout the day. They are producing cutting-edge products. They are innovating. They are putting people to work.
And they are showing that manufacturing is not a thing of the past. Rather, it’s an important part of our future. And in recent years, it has helped our nation pave a road to economic recovery.
Before I continue, allow me to quickly take a step back. When the President took office in 2009, the economy was losing 800,000 jobs a month, the equivalent of filling up Quicken Loans Arena roughly 40 times. That’s a lot of pink slips.
So it was an historic crisis. And the President took bold action. He saved the auto industry — not only helping GM and Chrysler — but also the workers and smaller businesses that are involved throughout the supply chain.
He’s cut taxes for small businesses 18 times. And the President has put about $3,600 more dollars in the hands of the average family over the past few years.
So he’s put forth a whole economic agenda that’s taken our economy from ruin to recovery. As a result, the U.S. has experienced 30 straight months of private sector growth, resulting in 5.1 million jobs.
And the manufacturing sector has been a bright spot. Roughly half-a-million manufacturing jobs have been created since January of 2010.
This is important progress, for a number of reasons, namely because we can’t go back to the old ways of doing business, where growth is fueled by financial bubbles. That’s what got the economy into trouble in the first place.
Instead, we’ve got to get back to the basics: innovating, designing, building, and selling products. In essence, we need a special commitment to advanced manufacturing.
Manufacturing accounts for 70% of all private sector R&D, and over 90% of U.S. patents. And studies show that a firm’s manufacturing activity doesn’t just benefit that one company, it also leads to increased productivity in the surrounding community.
When a manufacturer is innovating, its employees will tell their friends and neighbors stories about their work and projects. So there is a transfer of knowledge. And workers in neighboring businesses apply this knowledge to their own work.
So the sector lifts up entire communities. It also creates good jobs, with good pay, and good benefits. So manufacturing makes a difference on a number of levels. So let me talk a bit about how the Administration is supporting this vital industry.
First, the president has called on Congress to end tax breaks for companies that ship jobs overseas, and has proposed giving that tax relief to companies that bring jobs back.
It’s a common sense proposal that makes economic sense for our nation. And I know that the President urges Congress to consider his proposal soon.
In the meantime, please know that we are taking action every day to support manufacturing. At the Department of Commerce, we’ve been focused on helping businesses build their products here ,and sell them everywhere.
As Under Secretary for International Trade, my goal is to help American firms reach the 95 percent of customers that live outside our borders.
Every time a business exports, that revenue comes back home. It can be used to expand operations and hire new workers. And when Americans are working, it leads to stronger families and communities.
That’s why President Obama launched the National Export Initiative in 2010, with the goal of doubling U.S. exports by the end of 2014. It’s been a great success, making an impact in neighborhoods across the nation.
More than 300 metropolitan areas recorded positive growth in exports between 2010 and 2011. In total, last year, U.S. exports reached a record $2.1 trillion in total value, supporting nearly 10 million jobs — an increase of 1.2 million since 2009.
So we are having an impact.. And to keep it going, we continue to have a special focus on trade promotion. We have staff located in over 100 cities and 70 countries that are out there every day raising awareness, identifying opportunities, and helping businesses — particularly small- and medium sized firms — navigate through the export process.
We are also expanding our partnerships with the private sector. In this time of limited budgets in government, we know we can’t reach everyone.
So we’ve initiated partnerships with the likes of USPS, UPS, FedEx, DHL and the National Manufacturers Association on something called the New Market Exporter Initiative.
Just a small percentage of U.S. businesses export. Of those that do, 58 percent export to just one market — typically Canada or Mexico. If we can get these firms to expand into two or three new markets, then we can really make progress.
Our partners help us identify companies with the potential to expand. Then we get to work in helping them reach new markets. We’ve made tremendous gains so far. And we look forward to building on these partnerships far into the future.
And when manufacturers do sell their goods overseas, we work to ensure they are competing on a level playing-field. We make trade agreements work for all Americans by ensuring that our partners live up to their ends of the deal.
In my agency, this work is done by the ITA Trade Agreements Compliance Program. It helps ensure that our trade is guided by fairness and equal opportunity.
Companies reach out to us if they are encountering challenges in the global markets. Then we take action. In one case, a U.S. manufacturer of passenger aircraft told us about a change in Russia’s tariff code.
The change granted Airbus duty-free access to the Russian market, while subjecting U.S. aircraft to a 20% duty. We raised this issue with our Russian counterparts, made our case, which resulted in a revision to the customs code, eliminating the import duty on the American company’s wide-body aircraft.
We work every day on cases like this, ensuring that U.S. businesses are playing on a level field when operating overseas. And as long as there are inequities — we will never stop.
So just to recap, we are out there:
- expanding opportunities for manufacturers in the global markets;
- establishing partnerships to support manufacturers;
- and protecting manufacturers.
We are also indirectly investing in them. Our Market Development Cooperator Program provides financial and technical assistance to non-profits, specifically those that support projects which enhance the global competitiveness of U.S. industries.
As part of this effort, the Department of Commerce recently made an award of over $165,000 to the Ohio Aerospace Institute, right here in Cleveland.
OAI intends to use the award to increase aerospace exports from Ohio-based aerospace small to mid-size manufacturers by $90 million over the next three years. This will result in hundreds of high-paying aerospace manufacturing jobs being created.
Again — this is another case where exports are making an impact on the ground for manufacturers and workers.
One final initiative I want to highlight is a major new initiative called “Make it in America. Launched by the Department of Commerce and the Department of the Interior, it’s designed to provide communities with the tools they need to attract business investment.
Commerce’s Acting Secretary, Rebecca Blank, made the announcement last week. And as she said, our two Departments are teaming up to find communities that are poised to attract a major investment, but just need a little more help to get the deal done.
Maybe the city needs a better road to an industrial site. Maybe manufacturers looking to relocate are asking for better information and technical assistance. Maybe local workers need a tailored training program to fill a particular skills gap.
If they do, communities and regions across America can write a proposal describing the additional help they need to land new investment. Then we'll select the best proposals to fund. In total, we plan to give up to 15 awards totaling $40 million through this Challenge.
We’re trying to do everything we can to give businesses both here and abroad every possible reason to believe that the smart choice is to Make it in America. After all, it is the smart choice.
America’s manufacturers prove it every day. They are innovators. They are risk-takers. They are builders. They are creators. They are employers. And they are making an incredible difference — both for the bottom line and the common good.
As I said earlier, I reject the notion that manufacturing is a thing of the past. Supporting advanced manufacturing is good for our future.
That’s why we want to give tax relief to those who bring jobs back home.
That’s why we help manufacturers reach the 95 percent of the world’s customers that live outside our borders.
That’s why we are strengthening our partnerships with the private sector.
That’s why we work to ensure that American companies are competing on an equal playing-field overseas.
That’s why we issued awards that benefit aerospace manufacturers here in Ohio — and will support hundreds of jobs.
That’s why we want to help communities by drawing new investment through the “Make it in America” challenge.
And we’ll continue to do all this work to help businesses grow and help the middle-class thrive. And we want to do it in partnership with you. What’s good for Ohio’s manufacturing sector is good for America. So let me know how we can help you.
Together, we can build a bigger, stronger and more prosperous America.
Once again — my thanks to all of you for coming out. I’d be happy to take any questions.
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