"Next Steps on the Trade Agenda"
May 18, 2009
U.S. Chamber of Commerce
Washington, D.C.
*AS PREPARED FOR DELIVERY*
Thanks to all of you, and thank you particularly to Mr. Tom Donohue for your kind invitation to speak. I offer my greetings to the Ambassadors and friends from other nations who are here today.
I am eager to speak to the Chamber today, because there's no doubt that you appreciate the importance of trade to our economy.
In a time when some aren't sure there should be next steps on trade, you're eager to map a course for the future.
President Obama and I are committed to a robust, progressive trade agenda that takes hold of the opportunities that many of you envision for trade, while also acknowledging and including the ideas of those who want our trade policy to be more responsive and responsible to American workers and families.
Today, I've come to talk about trade tasks we're working on now... some new areas we will tackle... and frankly, a new mentality we all must embrace if any of our trade efforts are to succeed.
USTR is working diligently to carry out a trade policy that is more coherent and more resonant with the American people.
We're vigorously enforcing America's rights under existing trade agreements and seeking to resolve long-term disputes.
We're seeking to finalize the Panama free trade agreement, working to resolve outstanding issues on the Colombia and Korea agreements, and seeking a way forward on the Doha Development Round of World Trade Organization talks.
USTR is also crafting new goals for the coming months and years.
The dynamics of the world economy are changing every day. New and major players are emerging. We intend to watch and work with those regions that need our focus if America is to compete globally, and prosper.
But before I go into detail on our specific, I want to talk about what may be the most important task that we have if U.S. trade is to thrive in the next few years.
Those of us on both sides of the trade debate in this country can and should be more introspective about the battles we continually wage with one another.
I'm starting this speech with a little bit of preaching because frankly, it won't matter how hard we try to craft a new international trade agenda if squabbles here at home just bog it down.
To truly fulfill the promise of a trade agenda that works for America's working families and businesses, we're going to have to stop the name-calling that keeps us divided on trade.
Reflexive labeling of foes as either protectionists or anti-worker does little to foster the discussion of genuine concerns that need to be considered and addressed if we are to move forward successfully.
One of my favorite African proverbs may be of some value here: it simply says that two people in a burning hut don't have time to argue.
Our economy is in trouble, and the steep decline in global trade is only exacerbating the crisis here and abroad. We need to work together to get our economy back on track.
It's time to lay down our arms, come out of our bunkers, and start supporting important initiatives on their merits, not reject them for tradition's sake.
The President is working to help struggling families through health care reform, investments in education, a more balanced tax system, and incentives to build a green economy that will fuel America's economic growth in the future.
Those initiatives will make America more competitive, reduce economic inequalities here at home, and even help to balance trade by stopping the flow of dollars to petroleum producers abroad.
I would respectfully submit that this community, the business community, can play a vital role by working for these priorities just as hard as you would fight for any pending trade agreement.
A stronger health care system will free up dollars that companies - including our country's small businesses - can use to grow and expand.
A stronger education system will help to create the highly-skilled American workforce necessary to drive the innovative entrepreneurial efforts of tomorrow's economy.
These are problems we must solve if we are to keep America economically competitive, and they are necessary corollaries to a strong trade policy.
By that same token, those who may support health reform, education, and other key domestic initiatives while rejecting global trade should acknowledge the important role that trade plays in creating and sustaining better-paying jobs here at home, and take note of the improvements already being made to our trade policy as well.
U-S-T-R negotiators are focused on ensuring the rights of workers in markets abroad just as we are on protecting the rights of businesses to fair treatment.
Already, labor and environmental provisions are now core provisions in the text of trade agreements on par with commercial rights.
Protecting workers and our environment are not only appropriate elements of trade discussions, and critical to leveling the playing field of competition. They are also goals that reflect our values.
USTR is also responding to concerns about trade by vigorously monitoring and securing America's rights and benefits under international agreements.
As President Obama promised, we are focusing plenty of attention on something that's a priority for the Chamber: non-tariff barriers to trade.
Like you, we're seeking transparency and due process in our partners' trading practices from government procurement to market regulation, and insisting on strong protections for our intellectual property.
We're using all the tools in our toolbox - including consultations, negotiations, and litigation in the WTO when necessary.
My strong preference is to use direct diplomacy when we can to solve longstanding problems - and it is working.
Last week, we signed an agreement with the EU that secures significant additional access, at zero duty, to the EU market for high-quality beef produced from cattle that have not been treated with growth-promoting hormones.
This has been a 20-year dispute, in which the WTO had found that America was suffering more than $100 million in trade damage every year from the EU's refusal to take our beef.
This agreement won't fix all of that damage in the first phase, but our beef industry is getting major market access it didn't have before - and they're getting it now.
This progress proves that this administration is already changing the game on trade, and assuring that American farmers, ranchers, businesses and workers receive the benefits they deserve in the global, rules-based trading system.
We are preserving the rights of American companies and workers in these ways - and that's a trade initiative that all of us can support.
In the first weeks of this administration, President Obama also acknowledged some of the tough realities of trade and supported Congress's effort to dramatically expand access to Trade Adjustment Assistance.
That was the right thing to do, and we applaud Congress for their leadership.
But the need for a Trade Adjustment Assistance program does not change the fact that trade and trade expansion are also necessary for America's economic recovery and the world's.
Trade can be a major boon to American companies and workers, and to the country as a whole.
The numbers bear this out.
Last year, exports reached a record 13 percent of U.S. Gross Domestic Product.
More than a quarter of a million U.S. firms export goods. Ninety-seven percent of those firms are small- and medium-sized businesses who particularly need our help accessing global markets.
Three-quarters of global purchasing power and nearly 95 percent of world's consumers are outside our borders.
Obviously, one of the best ways to grow America's businesses - both large and small - is to open additional markets for their goods and services.
That's one of the best ways to support workers as well. Six million U.S. jobs are supported by the export of manufactured products alone - not even counting the trade we do in services and intellectual property.
Exporting firms tend to increase employment more rapidly, have higher productivity, and can pay as much as 13 to 18 percent more than the national average.
That's the kind of trade we can all embrace.
The Peterson Institute told us in 2005 that since World War Two, trade liberalization had increased our incomes by about one trillion dollars a year.
Eliminating remaining barriers to trade could increase America's income gains by $650 billion more today.
That's a prize worth fighting for on behalf of America's businesses, farmers, ranchers, consumers, workers, and investors.
That is why this Administration is working to finish agreements in process, and seeking new opportunities for the future to open significant markets for U.S. business and workers.
On Panama, it's no secret that we've has been working very hard with the Panamanian government in recent weeks to resolve outstanding issues so that this free trade agreement can be sent up to our Congress for consideration.
We have had very productive discussions on both labor and international tax issues and our efforts are continuing.
While it is important not to exaggerate the benefits of the Panama agreement, neither should we minimize them.
Many of Panama's products already enjoy duty-free access to American markets. This agreement will give American farmers, ranchers, manufacturers, producers, and workers reciprocal access to consumers in Panama.
At the Summit of the Americas, President Obama tasked me with conducting a thorough review of our pending free trade agreement with Colombia, and finding a way forward. That work is actively in progress.
I have had very productive meetings with Trade Minister Plata toward that end, and our USTR team is actively engaging with stakeholders here in the United States to get their perspectives.
If a U.S.-Colombia trade agreement is done well, it can provide a strong incentive for Colombia and other countries seeking to diversify their economies beyond the drug trade that plagues a number of nations across the Americas - even as we open up a significant new market for U-S exporters.
The U.S.-Korea Free Trade Agreement has the potential to bring significant economic and strategic benefits to both countries, while demonstrating the U.S. commitment to expanding our economic engagement and leadership in Asia.
I met with Minister Kim last Thursday, and we had a very candid and productive discussion about the domestic political concerns that must be addressed in both our countries so that we can proceed.
We committed to work diligently to address those concerns so that we can best determine how to move this important Agreement forward.
Our success in resolving outstanding issues will determine the pace at which we move forward with our FTAs.
In the same way that we are addressing these pending free trade agreements, USTR is taking what we've inherited in the Doha Development Round of World Trade Organization talks, and breathing fresh life into the effort.
President Obama and I are committed to a successful conclusion of the Doha round, to revive confidence in global trade and lay the groundwork for the robust trading system of tomorrow.
To date, our review of the Round has included a close look at what's been achieved, a distillation of the outstanding issues, and ongoing discussions with our trading partners to gain their perspective as well.
As many of you know, I just returned last week from my first trip to Geneva as USTR. I met with a number of our important trading partners, including groups representing the Latin American and Caribbean countries, the African and Least Developed Countries, Director-General Lamy, and counterparts from Switzerland and the EU.
In all, I met with representatives of more than half the membership of the WTO.
I was impressed by the genuine commitment of all of those with whom I met to secure a successful conclusion to this development round, not only for the survival of the least developed countries but also because of what we collectively believe Doha can do to help the world recover from the current economic crisis and set the stage for future growth.
I will share with you today what I shared with my colleagues and counterparts in Geneva.
To the United States, success at Doha means a balanced and ambitious agreement with meaningful market access gains for all involved.
The United States is very aware that this is a Development round, and quite rightly the least developed countries are not being asked to make sacrifices to complete a Doha agreement.
We do, however, see an opportunity for leadership among Advanced Developing Countries such as China, India, Brazil, and South Africa, to make the kinds of choices that are required of those who would lead in the global trading community.
And while the United States stands ready to work toward a successful conclusion to Doha, we are not arrogant enough to believe that our participation is the only factor necessary to do the deal. It will take hard work and cooperation from all the negotiators to get a good deal done.
Therefore, all 153 WTO members should be willing to consider adjustments to help put the negotiations on a more direct path to success.
This does not mean that we should start the Round over, or discard the hard work that's been done.
We should build on the progress that we've made and find the best way forward.
For the U-S, that means that we will complete our internal consultations, think about new paths to address remaining issues and build on the dialogue I began with our trading partners last week.
Some of these partners have already begun to get past some of the stale arguments of the recent years, to explore new ideas to move toward agreement.
A successful conclusion at Doha can be a critical element of reviving trade and breathing new life into the world's economies, including ours here at home.
Concluding the Doha negotiations will also give us the chance to turn our attention to new vistas on the trade agenda.
One of my goals, personally and in the service of President Obama's trade policy agenda, is to take a robust look at US trade policy toward Asia.
Now, I had intended to speak to the US-Korea Business Council on this topic last month, but it was postponed at the last minute. I fully intend to re-use that speech, so I won't give it all away here.
But needless to say, the Asia-Pacific is a worldwide center of economic activity - and a key driver of economic growth.
The United States has benefited greatly from a burgeoning trade relationship with the Asia-Pacific in recent years, with the value of our trade there tripling in the last decade and a half.
Even more effective engagement with Asia will be a key component of the Obama administration's outlook on trade.
In addition to working toward resolution of outstanding issues in the pending trade agreement with our strong ally and trading partner, Korea, we are engaging elsewhere as well.
I recently met with Chinese Minister Chen. It was very productive and friendly.
As two former Mayors, we talked about what we had learned from our past experiences - particularly the importance of being pragmatic and focusing on concrete problems that impact our constituencies.
We discussed a range of bilateral and multilateral trade issues, and emphasized on the importance of avoiding protectionism - and utilizing cooperative mechanisms such as such as the Joint Commission on Commerce and Trade to resolve bilateral trade issues whenever possible.
We also discussed the potential of Doha to spur economic growth.
From Panama to Doha to Asia, all of this is part of our effort to make America's trade policy work for working families - for the people who help to drive the business community.
As I travel the world in my new job, I am reminded of another African proverb - that one should take no comfort in the hole at the other end of your boat.
As the current economic crisis has shown us, in the interconnected global community in which we live - we sail, or sink, together.
It's time to internalize that concept here at home. We are all citizens of this extraordinary country, and we are all in this extraordinary economic crisis together.
The secret is that trade champions and trade skeptics both sincerely desire what's best for our nation's economy and for our people.
We should try to learn from each other - and together, craft trade policy that does better by the American families and businesses we serve. I look forward to working with all of you.
