December 10, 2009
National Conference of State Legislatures
San Diego, CA
*As Prepared for Delivery*
Thank you all for allowing me to join you here in San Diego. And thank you in particular to Representative Brent Yonts for that wonderful welcome.
For centuries, trade expeditions were long, difficult, and dangerous. Merchants could afford to transport only the most precious silks, spices, and luxury goods between continents.
In the 15th century, the search for faster, more reliable trade routes launched the Age of Exploration. Dozens of ships made their way across the Atlantic. Some found their way around the tip of South America and into the Pacific. A few went north. And in 1542, a European ship anchored in San Diego harbor for the first time.
For us here today, it is as difficult to imagine the city of San Diego as a 16th century wilderness as it would be to imagine a world without global trade.
As the Age of Exploration came to a close, trade goods became more affordable. The ships traveling between the New World and the Old carried not just luxury items, but also animal products, seeds, and tobacco. As time went on, technological advances like steam power and refrigeration fueled the stream of exports, and services joined the flow of commerce from one country to another.
Today, nearly a third of all goods produced worldwide are exported across a border. In the words of Adam Smith, man's "propensity to truck, barter, and exchange one thing for another" has gone global.
My job as United States Trade Representative is to help American farmers, ranchers, manufacturers, and service providers take advantage of job-creating opportunities in that global marketplace. The National Conference of State Legislatures has been an invaluable partner in that task since the first day I took office.
When I was sworn in as United States Trade Representative, one of my first meetings was with NCSL leaders, and for a very simple reason: we need local and state experts to help us determine what we can do to help more Americans to take advantage of trade.
You can tell us about the alternative energy company in Texas that earns profits generating electricity in Latin America. You can tell us about the company in Kansas that sells grain conveyors to China. You can tell us about the company in South Carolina that sells textile machinery to Turkey. And when you talk to us, we can make sure that our trade policy is giving them all the tools they need to succeed in the global marketplace.
Even in these difficult economic times, businesses and workers in every single state are exporting their goods and services to customers around the world. Millions of American jobs exist because of trade. Six million jobs are supported by manufacturing exports alone, and jobs supported by goods exports pay as much as 18 percent above the national average.
Last year, international trade generated nearly two trillion dollars of income for American workers, farmers, ranchers, manufacturers, and producers. That's about one in every eight dollars earned in 2008. With your help, we can continue to grow those numbers, and bring home the benefits of trade for more Americans.
As state legislators, you are often a first point of contact for our small business owners and entrepreneurs. You are not only their representatives; oftentimes you are their neighbors, friends, and sounding boards.
You are also a valuable sounding board for all of us here at USTR. We have met individually with leaders from Washington, New York, Kentucky, and Vermont, to name a few. And as our office moves forward, we will be seeking to meet with representatives from every other state across the nation.
We value the input we receive from our state points of contact and our Intergovernmental Affairs Policy Advisory Committee, which includes many state officials as well as agency and association leaders.
As a former mayor, I know that our state and local leaders understand Main Street businesses and local development better than anyone. And state policies have helped to foster growth and development in cutting edge industries and communities. Just think about the high-tech industry in Silicon Valley, or the life sciences community in Boston, or the photonics industry in Rochester, for example.
Increasingly, specialized economic clusters like these and others are producing goods and services that highlight American strengths and increase our competitiveness in the international marketplace. USTR is ready to support the development of competitive industries in your communities by opening the door to international customers and consumers.
And we know you are committed to that development as well. State policies and decisions have helped to nurture the growth of these potential economic powerhouses, and state governments are helping successful American businesses to go global.
State government agencies have hundreds of offices and on-the-ground experts in dozens of countries around the world. Just look at Florida. It has state trade offices in Canada, China, Mexico, Japan, and Germany, among others. Those five nations are our top five trading partners.
Around the world, state trade offices are working hand-in-glove with the Commerce Department's Commercial Service. Often, they share office space with federal trade officials and trade tips with federal export promotion experts. That state-federal partnership is empowering American businesses, workers, and entrepreneurs with a unique combination of international expertise and local knowledge.
I know that many of you face growing state budget deficits, and we are all trying to figure out how to do more with less. But I cannot say this strongly enough: state trade programs are invaluable resources for businesses and workers, and they play a critical role in encouraging economic recovery. As President Obama noted at the White House Jobs Forum just last week, supporting export growth is a low-cost, high-impact way to create jobs.
As the U.S. market gets back on its feet, more American businesses can prosper by selling their goods to areas of the world that have already rebounded - places like Germany, Japan, or Brazil, where consumers are once again opening their wallets.
In particular, small- and medium-sized businesses can profit from exploring international markets. And I know your state export programs are focusing on helping small businesses to make the leap to the international marketplace. Their work has not gone unnoticed. Through training programs, trade missions, export counseling, and direct trade promotion grants, the states are helping small businesses to take full advantage of USTR-negotiated trade openings.
And that work could not come at a more critical time. As we move towards a full economic recovery, small- and medium-sized businesses are likely to be the best drivers of growth and employment. Over the past 15 years, these enterprises have generated more than half of all new employment in America. Put simply, small businesses are big job creators, and we can expect that will continue to be true for the next fifteen.
Even those businesses which do not directly export can benefit from increased trade promotion. In fact, many Main Street businesses are already a part of global supply chains - their parts and products can be the raw materials for goods that end up in Asian, African, or European markets - and they might not even know it.
At USTR, we recently launched a small- and medium- sized business initiative, to help more of these vital enterprises take advantage of trade. Because small- and medium-sized exporters are more likely to grow faster, add jobs faster, and pay higher wages than their exclusively domestic counterparts.
To that end, USTR has created an agency-wide working group to ensure that our policymaking and enforcement efforts better serve small- and medium-sized enterprises. And we believe those efforts will help to create additional trade opportunities for small businesses.
There is tremendous room for growth among small- and medium-sized businesses. Right now, small businesses account for 97 percent of American exporters, but only 30 percent of American exports. And only one in every 100 small businesses is marketing their goods or services abroad. We have to work together to help them realize export-oriented growth opportunities.
Last week, President Obama visited Allentown, Pennsylvania, where he met with local leaders and hard-working Pennsylvanians. And as the President told them, if we can boost American exports by just a few percentage points, we could create hundreds of thousands of new jobs.
Over the coming months the President will meet with Main Street citizens in communities across America. He will be looking for new ideas about how Americans can work together to create jobs and revitalize the economy. Because he is committed to creating jobs and improving living standards across the country.
I know that we can do so through trade.
Here in California, businesses last year shipped $20 billion worth of exports to Mexico, another $13 billion in goods to Japan, and nearly $6 billion worth of merchandise to Germany. In total, California exported more than $144 billion of computers, electronics, machinery, and other goods. Exports of manufactured products supported one in every twenty private sector jobs in California, and nearly one in five manufacturing jobs.
And that's just right here. 95 percent of all consumers live outside America, and there are export opportunities in every state.
I know that many of you are looking for common solutions to unfortunately common problems: you want to create jobs and generate economic growth. So if you have any ideas about how we can implement trade policy in ways that will bring about a swifter economic recovery, I hope you will share with USTR.
Our office is committed to working with every one of you to ensure that we can make trade work for you, for your constituents, and for every single American farmer, rancher, manufacturer, and service provider.
We don't know what the future may hold. But to quote one of my favorite American philosophers, Yogi Berra: "If you don't know where you're going, you might not get there." So at USTR we are working towards a brighter future.
The explorers I talked about when I began these remarks couldn't know that their voyages would make history. But they set sail with big goals and bigger dreams, and they did. By working together, we can make history too.
Thank you all, I look forward to working with you.