Remarks by Ambassador Michael Froman at Columbus Mayor Michael B. Coleman’s Small Business Conference
October 9, 2014
“You know how lucky you are to have someone like Mayor Coleman at the helm of the city. He has been a great leader among mayors all over the country, mayors all over the country look to him for leadership on all sorts of issues, and no issue more than what he has done for small businesses, with export strategy, with the Global Connect effort, and I am very pleased to be here to be part of this.
“One of the most famous authors to call Columbus his home is James Thurber. And James Thurber once described this city as 'a town in which almost anything is likely to happen, and in which almost everything has.'
“And even if you’re not familiar with Thurber, you may be familiar with some of his work, including 'The Secret Life of Walter Mitty,' a short story about a man who clearly had some big daydreams.
“That story was recently made into a movie for a second time, and it grossed $180 million at the box office, two-thirds of which came from international sales.
“Today, you don’t need Thurber’s creativity, or Walter Mitty’s imagination to understand how important international trade is to Ohio.
“Now there is a company that I just visited this morning up in Cleveland called Jet Incorporated, I went there with Senator Sherrod Brown, and we met the employees there. They make wastewater treatment equipment. Thirty-two employees, and they sell their product in thirty-three countries all over the world—in Mexico, East Africa, the Philippines. And as they increase their sales, they are hiring more people, creating more good-paying jobs right here in Ohio.
“Here in the Columbus area, there’s John Sydner of TechColumbus, an incubator for local tech companies who have worked with customers in Mexico, the Middle East, the European Union, and elsewhere.
“There’s Davenport Aviation, which opened its doors in 2009 and has grown every year since by selling aircraft parts, supplies, and equipment to customers from Colombia to Cape Verde. As their business has boomed, they’ve expanded from two to nine employees, and they have plans to add another three or four jobs next year.
“And these are just three of the 300,000 American firms that export, 2,000 of those firms are here in Columbus.
“And thanks to, in part to Columbus businesses like these, U.S. exports have hit record highs--$2.3 trillion last year. Here in Columbus, $5.7 billion, in Ohio, $50 billion.
“Those exports support terrific jobs here at home. Now, small businesses make up almost 90% of the 16,000 Ohio exporter companies here, and they account for one quarter of the state’s exports.
“And breaking records is a great thing, but you may be asking yourself, ‘Why should I bother to export?” It’s not just so you have more sales; we know that exports lead to bigger and more productive businesses – both in terms of profits and in terms of personnel.
“By supporting more well-paying jobs, it helps to strengthen communities, and build more successful companies.
“According to a study by the Global Connect Initiative, one in 14 jobs in this region is tied to exports, and these jobs pay wages that are 69% higher than the average. Global Connect also found that export-related jobs accounted for 70% of the net job growth in the Columbus region between 2003 and 2010. And that’s particularly helpful for Ohio’s manufacturing workers, one in four of whom– 25 percent of all the manufacturing workers in this state– owe their jobs to exports.
“That story is replicated all over the country. Nationally, U.S. exports support 11.3 million jobs, here in Ohio, it is a quarter million jobs. Since 2009, the increase in exports has accounted for one-third of our total economic growth during this recover, and added 1.6 million new jobs.
“And even though we’ve got 300,000 companies across the country who export, 98% of which are small- and medium-sized businesses, only 1% of small- and medium-sized businesses export. Just think about that. 98% of companies that export are small- and medium-sized businesses, but right now only 1% of small- and medium-sized businesses export, and most of them export to just one other country. So the potential is huge. If we can get more and more small- and medium-sized businesses engaging in global markets, expanding their export markets, it’s a great opportunity to unlock opportunity here for jobs, for growth, and for strengthening the middle class here in the United States.
“But to take advantage of that opportunity, we’ve got to knock down the barriers that are preventing our small- and medium-sized businesses from exporting. And make sure that our workers and our businesses are given equal opportunity to markets overseas.
“And again, the Global Connect market assessment found that businesses exporting from Columbus faced a whole series of international barriers, “complex procedures, insufficient free trade agreements, and too many restrictions on exports.”
“Through President Obama’s trade agenda, we’re working to knock down these barriers and level the playing field for American workers and businesses of all sizes. This trade agenda that the President has launched is by far the most ambitious trade agenda in recent American history. It is all focused on unlocking opportunities for all businesses, including small- and medium-sized businesses in places like Columbus.
“Our first effort is the Trans-Pacific Partnership. This is a negotiation between the United States and 11 other countries in the Asia Pacific region. More than half of Ohio’s exports go to these countries, and collectively these countries are responsible for 40 percent of the world’s economic output.
“Through TPP, we’re not only opening for exports, but we’re also working to level the playing field for American workers and American firms. And that’s why we’re very focused to bring down tariffs and bring down non-tariff barriers. We want to make sure that we raise labor and environmental protections, that we raise protections of intellectual property, that we take on new issues that are affecting global competition. A lot of our private firms have to go against state-owned enterprises in other counties, those are companies that are owned by foreign governments. We want to make sure that when companies owned by foreign governments compete with our private firms, they do so on a commercial basis, that our firms have the same opportunities to compete and win.
“One of the biggest issues right now in the global trading system is how to integrate the internet into the global trading system and making sure that the internet stays open and free, and that there is a free flow of information and data across borders. That is particularly important for small- and medium-sized businesses who are often engaging with the international markets through their presence on the internet, so that is a major focus of our TPP negotiations as well.
“At the same time, we are negotiating with the European Union something called the Transatlantic Trade and Investment Partnership, and that’s already a very deep and broad economic relationship, and yet there is still more that we can do. We’ve got tariffs, we’ve got non-tariff barriers and we have two well-regulated markets, but we get to our regulations in slightly different ways. We both care about safety, health, and the environment, but the way that we get there, those differences create barriers to trade.
“Again, I was just with this company Jet Incorporated in Cleveland this morning, and he was talking about the differences in standards in the U.S. and European market that is preventing them from exporting abroad to Europe. And those are the kind of things we are working on, how to bridge some of the differences in our regulatory regimes without lowering our health, environmental and safety standards.
“In terms of small businesses, what this trade agreement is focused on is lowering tariffs, to make sure that we are keeping cost competitiveness for our small businesses; reducing customs paperwork, cut out a lot of that red tape; making it quicker for our goods to be released from customs, all of which make small- and medium-sized businesses more competitive, make our customers more happy and more loyal, create opportunities for us to expand operations here as well.
“Now, as I look back on the country itself, we are very much on the economy heading in the right direction. Those of you who remember, very painfully, five years ago, we were losing 800,000 jobs a month. And now we are gaining about 200,000 jobs a month on average. And we are rebuilding manufacturing—the United States has increased manufacturing jobs by over 700,000 in the last five years. Unemployment has gone from 10% down to 5.9% now nationally, and the Mayor was telling me it’s about 4% here in Columbus.
“We’re seeing great progress on all economic fronts, but we know there is further to go, and there is much more work to be done, and we’re committed to very much fulfilling that agenda.
“The U.S. again has achieved the number one status as the place to invest. We’ve got the world’s most attractive consumer market. We’ve got strong rule of law. We’ve got a skilled workforce. We’ve got an entrepreneurial culture. Now we’ve got abundant sources of affordable energy, and we know that here in Ohio, being the epicenter of that.
“When you take all those advantages that the United States has as a place to invest, when you layer on top of them these trade agreements that we’re negotiating, the Trans-Pacific Partnership with the Asia Pacific and the Transatlantic Trade and Investment Partnership with the European Union, it positions the United States to be at the center of a web of agreements that will give us unfettered access to over two thirds of the global economy.
“That means the U.S. becomes the production platform of choice.
“I get this all the time from companies, whether it’s American companies bringing back production to the United States, or foreign companies expanding or making new investments in the United States. And they say that they want to make things here, grow things here to serve the U.S. market, but also, based on our trade agreements, sell them all over the world.
“That’s the great opportunity we have in front of us. We see our trade policy, our interest to open markets all around the world as a key part of our investment policy, of attracting investment to the United States, to more job creation here.
“We just saw some figures this week from the IMF, the International Monetary Fund, that our manufacturing exports are up in this country, 6% so far this year, simply based on the fact that we’ve got competitive energy prices, and we’re opening markets abroad.
“Eighty years on, I think James Thurber would be proud of what Columbus has become. And I certainly look forward to working with all of you, and the Mayor and his team, to make sure that we can deliver on our promise of making things happen here in Columbus. Thanks very much for letting me come, and I wish you all good business and best of luck.”