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Remarks by Ambassador Michael Froman to the Outdoor Industry Association
April 15, 2015
*As Prepared for Delivery*
Thank you, Mike. You picked a great week to have this event. As you might have heard, we expect this to be a busy week of work on trade promotion legislation, and if that’s not exciting enough, we also have the cherry blossoms in full bloom. Good timing.
I’ll say more about trade promotion authority in a bit, but let me start by pointing out that the first president to receive a version of that authority was FDR. Along with the other New Deal programs, expanding trade was part of FDR’s overall economic strategy for pulling America out of the Great Depression and setting it on a path toward global leadership.
FDR saw conservationism as complementary to those same economic goals. During the first 100 days of his presidency, he founded the Civilian Conservation Corps. It helped teach a new generation of Americans that protecting our environment is both an economic and a moral necessity.
President Obama is carrying on that tradition.
You can see that in America’s Great Outdoors Initiative, which the President launched in 2010 to expand access to the outdoors.
You can see it in the President’s “Every Kid in a Park” initiative, which starting this fall, will provide all 4th grade students and their families free admission to all National Parks and other federal lands and waters for a full year.
Having spent time the last couple of summers with my family in Yellowstone, the Grand Tetons and Yosemite, I think that we all have a deep appreciation for what a national resource we’ve developed over the last 100 years.
And you can see that in the President’s values-driven trade policy, which is based on the fact that we need economic growth that is broad-based and inclusive. We need economic growth that is sustainable.
To advance that goal, we’ve sought input and advice from the very broadest group of stakeholders. As a result, we’re joining forces with some important allies, including groups that you might not normally associate with trade. Just this morning, actually, a group of leading global anti-poverty organizations are announcing their support for President Obama’s trade agenda. The list includes The ONE Campaign, Alliance to End Hunger, Business Council for Global Development, International Youth Foundation, National Cooperative Business Association/CLUSA, Vital Voices Global Partnership, and Women Thrive Worldwide. As they put it, trade is a “key tool for promoting inclusive development and a fairer, safer, more peaceful and prosperous world.”
And that’s what I’d like to focus on today – how leading on trade advances both our interests and our values.
Now, the economic importance of trade to America’s economic well-being has never been clearer. Since 2009, U.S. exports have contributed nearly one-third of our overall economic growth.
Importantly, more exports means more good jobs. Last year, an estimated 11.7 million American jobs were supported by exports, an increase of 1.8 million since 2009. And we know that jobs related to exports pay up to 18 percent more, on average, than jobs not related to exports.
Last week, we published a report detailing how trade is benefitting communities in all fifty states, and highlighting some of the American businesses that are competing and winning in markets around the world. And there’s plenty more success stories to highlight, especially our outdoors companies.
In Seattle, for example, I visited a company called Cascade Designs. They make a variety of outdoor equipment—including the only snowshoes made in the USA. They export to more than 40 countries and estimate that 40 percent of their business is from exporting.
That’s just one of the more than 300,000 American businesses exporting goods today. And even though more American businesses are exporting than ever before, more than 95 percent still aren’t exporting goods. So, 95 percent of our businesses are missing out on 95 percent of the world’s customers.
That’s an incredible opportunity waiting to be unlocked – for jobs, for growth, and for America’s middle class. We already know that American consumers spend billions of dollars each year on outdoor recreation, supporting more than 6 million jobs in the United States. What if our outdoor gear companies had a fair chance at competing for all the untapped business beyond our borders? Imagine how many jobs that would support here at home.
But there’s even more on the line, especially where the environment is concerned. That’s because we’re pursuing the highest standards in our trade agreements, including the strongest, enforceable environmental protections in history. Take the Trans-Pacific Partnership, or TPP.
We’re negotiating TPP with 11 other countries in the Asia-Pacific, and when it’s completed, TPP will cover nearly 40% of the global economy. According to one study, TPP is estimated to grow our exports by more than $123 billion, supporting many more well-paying jobs.
But you really can’t put a price tag on a level playing field. That’s because the Asia-Pacific region is expected to grow dramatically. In 2009, there were 525 million middle class consumers in Asia. By 2030, that number will swell to 3.2 billion. That means two thirds of the world’s middle class will call Asia home. The question is, who will serve that market? Will the world’s middle class buy Made-in-America goods and services, or products made elsewhere?
TPP will give our exporters the fair shot they deserve at competing in those markets. Currently, many American outdoor companies face high tariffs in TPP markets such as Malaysia, Vietnam, and Japan.
For example, some of Cascade’s products, like water filtration equipment, face a 10% percent tariff in Vietnam. Right now, Chinese competitors making the same products don’t face any tariffs in Vietnam. To cite just one more example, Japan has tariffs up to 188% on leather footwear, such as hiking, trekking and hunting boots made by OIA members. Our goal in these negotiations is to eliminate these and other tariffs, giving your members the opportunity to expand their access to markets overseas, and in doing so, to support more good jobs here at home.
It’s no accident that TPP will benefit American workers and businesses in the outdoor industry. We’ve worked closely together to develop an agreement that will help you grow. For example, we studied the “high-performance apparel” legislation that you’ve been working on, and we tried to incorporate that approach into defining the products on our textiles short supply list. We actually created the “garment specific” short supply category to address your concerns. What this means is the prospect of lower tariffs on imports from TPP countries of many of the high performance apparel products of greatest interest to OIA and its members. That’s good for you and for your customers.
Although our TPP negotiations are still ongoing, the finish line is in sight. And let me tell you what we see.
We see an agreement that will make America’s outdoor industry even stronger by promoting regional economic integration and expanding market access opportunities for our exporters.
We see an agreement that will support more high-paying American jobs, spur growth, and strengthen our middle class.
And we see an agreement that will be historic in the precedents it sets for environmental protection.
TPP will help protect one of the most ecologically and economically significant regions of the world by establishing the toughest environmental protections of any regional trade agreement.
We’re on track to establish new commitments to combat illegal wildlife trafficking, to protect the marine environment and combat illegal fishing and harmful fisheries subsidies, and to protect our forests from illegal logging. We’re also working to ensure that countries effectively enforce their conservation laws and live up to their international commitments to protect endangered species.
With illegal wildlife trade on the rise, the need for these efforts has never been greater. In Asia, demand for ivory and rhino horn is growing along with a rapidly expanding wealthy class that views these commodities as luxury goods that enhance social status. This increased demand has triggered dramatic upticks in poaching in Africa, posing an existential threat to these species.
TPP offers an opportunity to combat this threat, share information, build capacity so that we can stem the illegal trade, collectively improve our investigations, and bring wildlife traffickers to justice.
Beyond measures to prevent wildlife trafficking, we’re also breaking new ground in protecting the world’s oceans. For the first time in any trade or environment agreement, we’ll include prohibitions on some of the most harmful fish subsidies, including those that contribute to overfishing.
That’s critical because over 1 billion people rely on fish and seafood as their primary source of protein and millions depend on the ocean’s bounty for their livelihoods. TPP partners include 8 of the world’s top 20 fishing nations, accounting for one quarter of global marine catch and one quarter of global seafood exports.
TPP will also include commitments to combat illegal or “pirate” fishing, commitments to promote long-term conservation of sharks, whales, and sea turtles, and commitments to promote sustainable fisheries management.
TPP represents a significant opportunity to step up regional efforts to protect our forests and combat illegal logging. TPP countries account for over 30 percent of global timber and pulp production. That’s why we’re using TPP to promote sustainable timber management practices and improve enforcement of conservation laws.
Importantly, all of these commitments will be enforceable. We’ve made it clear that if TPP does not have a robust, fully enforceable environment chapter, we will not close the agreement. Our TPP partners know the environment chapter must be subject to the same enforcement procedures as other obligations in the agreement, including recourse to trade sanctions.
As you might imagine, not everyone shares our commitment to the environment. Since the very beginning of the negotiations, the United States has been the strongest, loudest voice calling for higher environmental standards. And while that position hasn’t won us many friends at the negotiating table, it’s demonstrated to many important environmental and animal welfare organizations that we’re on the same team. Organizations such as the World Wildlife Fund, Oceana, the Humane Society of the United States, World Animal Protection, the International Fund for Animal Welfare, the Nature Conservancy, and others have held our feet to the fire, making sure we’re negotiating the strongest possible agreement, and we are grateful for their input and engagement.
I know there are trade skeptics out there in the environmental community, but I hope that as their members learn what’s actually in the TPP agreement, they’ll come on board. I think all of us ultimately have to consider what the world will look like, with and without TPP.
With TPP, we’ll commit some of the world’s largest consumer and export markets to the highest enforceable environmental standards.
Without TPP, the risk of deforestation, overfishing, and species extinction grows – without new regional tools to address it. If current trends continue, fished seafood supplies could collapse by 2050 and species already on the brink, like rhinos and elephants, could go extinct within decades.
With TPP, we’ll knock down barriers to U.S. exports, promoting regional economic integration and expanding market access opportunities for your companies.
Without TPP, you’ll continue to face tariffs that prevent you from getting a fair chance to compete in some of the world’s fastest-growing markets.
With TPP, we’ll support more good jobs right here in the United States, helping to spur growth and strengthen our middle class.
Without TPP, more American households will struggle with rather than shape the global economy.
I don’t think we have the luxury of not acting, of not doing everything we can to protect endangered wildlife, to address illegal logging and fishing, to reduce overfishing, to protect marine mammals and the marine environment. Sometimes, in the heat of political debate, people lose sight of the fact that we have an obligation to this and future generations – to act.
Economically and environmentally, the choice is as simple as it is consequential. And it’s clear that the first step in making the right choice is passing trade promotion authority.
As I mentioned, trade negotiating authority is one of America’s oldest bipartisan traditions, going back to FDR. But it hasn’t been updated since 2002. The world has changed a lot since then, and one of the important changes is that there’s now a solid consensus that enforceable environmental protections must be part of any high-standard trade agreement. Passing trade promotion authority is an opportunity to lock in that progress for this and future Administrations.
TPA is critical to advancing our broader trade agenda, including the Environmental Goods Agreement, which brings together a group of 17 WTO Members that account for nearly 88 percent of global trade in environmental goods. Together, we can slash tariffs on everything from wind turbines, to water treatment filters, to solar water heaters.
A successful Environmental Goods Agreement will drive demand for more Made-in-America exports, allowing more American workers and business to make environmental goods here and sell them everywhere. It will provide a powerful reminder that there’s no contradiction between economic progress and environmental protection. So the opportunity is there, and TPA will help us get it done.
Four years into his presidency, FDR took a moment to reflect on all that America had accomplished. As he told a crowd in North Carolina, “If history gives a name to the day and age in which we are living, I hope it will call this the era of rebuilding, for it is my firm conviction that unless we, in our generation, start to rebuild, the Americans of a century hence will have lost the greater part of their natural and national heritage.”
We are living in a similar moment today. We have built a solid foundation, and there’s much to celebrate about the progress we’ve made in recent years. But there is more work to be done. And it is incumbent on each of us to do what we can today – to act – so that Americans one hundred years hence can enjoy the richness that we have inherited. I look forward to continuing that project together. Thank you.