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Remarks by Ambassador Ron Kirk at the 8th Annual Border Security Conference

Remarks by Ambassador Ron Kirk
United States Trade Representative

The 8th Annual Border Security Conference
El Paso, Texas
August 15, 2011

* As Prepared for Delivery *

“Thank you, Congressman Reyes. Good morning, everyone. Thanks also to President Natalicio and the entire UTEP community for hosting such a diverse and dynamic group of leaders here today.

“It’s great to be in El Paso, surrounded by my fellow Texans as well as friends and neighbors from Mexico. Communities in both of our countries have thrived on trade for generations. Even before the Rio Grande became a modern border line, many of your ancestors likely travelled up and down the great river in pursuit of commerce and economic opportunity.

“Today, Texans are selling products to customers all around the world. They are building airplane engines and manufacturing electric circuits. They are growing crops and raising cattle. And they are selling services in sectors ranging from energy to education, and from health care to high-tech.

“Here along the border, you know better than most how important international trade is to the United States.

“What I’d like to do today is present a few quick highlights of the Obama Administration’s overall job-building trade agenda, and then I’ll spend a few minutes focusing on bilateral trade issues.

“Let’s start with the big picture. Since day one of the Administration, President Obama and I have consistently affirmed that we believe in the power of trade to grow the U.S. economy and support job creation in America. But at the same time, we think it’s important to recognize that many Americans have concerns about trade.

“So while we are seeking greater access to global markets, we are also stepping up enforcement of our trade agreements.

“And we have put a renewed emphasis on engagement with stakeholders. I have personally traveled to over 20 states and over 45 cities to speak with trade skeptics as well as supporters.

“All of our efforts support President Obama’s National Export Initiative, which aims to double exports by the end of 2014. The good news is we are on track to meet the President’s goal.

“Exports were up 17 percent last year, and right now trade is a critical element of the President’s forward-looking agenda focused on new jobs, higher wages, and faster economic growth.

“As you know, last month, the President worked to bring Democrats and Republicans together to find a compromise to reduce our deficit and ensure that America did not default on our obligations for the first time in our history.

“But to be sure, while deficit reduction is part of the agenda, it is not the whole agenda.

“Because as the President said on August 2nd : ‘…[the American people] …didn’t vote for dysfunctional government. They want us to solve problems. They want us to get this economy growing and adding jobs.’

“That’s why President Obama has called on Congress to take some bipartisan, commonsense steps right away.

“The President has urged Congress to pass our pending trade agreements with South Korea, Colombia, and Panama, as well as to renew Trade Adjustment Assistance, as soon as they return from the summer recess.

“President Obama said these deals will ‘help displaced workers looking for new jobs and allow our businesses to sell more products in countries in Asia and [Central and] South America, products that are stamped with the words “Made in America.”’

“We are eager to move forward, because it is estimated that together these three agreements will increase U.S. GDP by $12 billion in support of tens of thousands of additional American jobs.

“And we think that is a conservative estimate, because many more jobs will also be supported by liberalization of services trade and investment.

“In fact, guaranteed access to the services markets of South Korea, Colombia, and Panama adds up to a combined total of over three-quarters of a trillion dollars ($766.6 billion: South Korea – $580 billion, Colombia –$166 billion, Panama –$20.6 billion).

“Simply put, increased exports of U.S. services will support additional jobs here on our shores.

“Each agreement holds significant export opportunities for producers here in the Lone Star State, across a wide range of jobs and industries.

“Consider chemicals, for example. Texas chemical companies exported $1.6 billion to South Korea on average from 2008 to 2010. Their commercial success in the South Korean market is notable, because South Korean chemical tariffs currently average 6 percent and can be as high as 50 percent.

“But once the agreement enters into force, 50 percent of U.S. chemical exports by value will receive duty-free treatment immediately, 82 percent will be duty-free within three years, and the remaining tariffs will be phased out within 10 years.

“Those tariff reductions will help keep Texas chemical manufacturers competitive in the multi-billion dollar South Korean market, which will help support more manufacturing jobs here in Texas.

“Of course, Texas producers are particularly well-positioned to take advantage of export opportunities in Latin America as well.

“For example, Texas farmers and ranchers will benefit from the reduction and elimination of tariff and non-tariff barriers to agricultural trade contained in our trade agreements with Colombia and Panama. These agreements are critical to keeping American agricultural producers competitive in these valuable markets.

“Until recently, virtually all food and agricultural products from Colombia and Panama entered the United States duty-free under U.S. trade preference programs, which Congress failed to renew late last year. At the same time, U.S. agricultural exports face tariffs in Colombia and Panama.

“Nonetheless, Texas farmers and ranchers sold over $150 million of agricultural goods to Colombia and Panama last year ($145 million to Colombia, $10 million to Panama).

“Texas agricultural producers will be able to sell even more once the agreements enter into force and U.S. producers receive access to the Colombian and Panamanian markets on a more level playing field.

“But to be sure, I should note that I’ve heard concerns from many farmers, ranchers, and businesses that they are losing market share to competition from Canada and the EU, both of whom have signed FTAs with Colombia and Panama. And the EU FTA with South Korea went into effect on July 1st.

“That’s why I am very pleased that Senators Reid and McConnell have agreed on a path forward in the Senate for the pending trade agreements and Trade Adjustment Assistance.

“While there are still important details to be worked out with the House, Speaker Boehner has also now clearly committed to floor consideration of TAA along with the trade agreements.

“The Administration looks forward to working with leaders of the Senate and House after Congress returns in September to secure approval of these important initiatives for America’s working families.

“Of course, even as we continue efforts to complete pending trade agreements and TAA, we are also moving forward with robust efforts to open markets and enforce U.S. trade rights around the world.

“We’re making good progress at the regional level through the Trans-Pacific Partnership (TPP) and the Asia-Pacific Economic Cooperation (APEC) forum.

“We are strongly supporting Russia’s bid to join the WTO, working through the accession process with Russia and other WTO members.

“We are also working with other WTO members to take a sober and realistic look at next steps in the Doha Round.

“Our trade enforcement team is actively asserting U.S. trade rights to reap the rewards of our agreements for American businesses, workers, and families.

“Earlier this year, we won the largest commercial victory in the history of the WTO against illegal EU subsidies in the Airbus case.

“Recently, the WTO found in our favor against China with respect to industrial raw materials.

“Last week, we took the next step to hold Guatemala accountable for apparent systemic failures to uphold its obligations with respect to the enforcement of Guatemalan labor laws.

“This is a continuation of the first labor case that the United States has ever brought under a trade agreement. By requesting the establishment of an arbitral panel under CAFTA-DR, we are sending a strong message that the Obama Administration will act firmly to ensure effective enforcement of our labor laws by our trading partners.

“Those are just a few quick highlights of our ambitious trade agenda.

“Now I want to spend a few minutes focusing on bilateral issues. NAFTA seems like a logical place to start.

“For 17 years, the North American Free Trade Agreement (NAFTA) has deepened trade ties between the United States, Mexico, and Canada, to the benefit of millions of workers and consumers, as well as businesses both small and large.

“Since NAFTA first entered into force in 1994, U.S. goods exports to Mexico have nearly quadrupled, and bilateral trade between the United States and Mexico keeps growing.

“Here in Texas, it’s plain to see just how important trade with Mexico is. In 2009, the El Paso metropolitan region exported approximately $5.8 billion to Mexico, which comes to over $16 million daily.

“Or you can simply watch the bridges over the Rio Grande, where steady caravans of cars, trucks, buses, and motorbikes carry some of the nearly 1 million people who cross the border in both directions every day.

“Those facts and figures represent real benefits for Texas families. Because trade with Mexico, and in general, supports well-paying jobs here at home. For example, one out of every four manufacturing jobs in Texas depends on manufacturing exports.

“To enable continued export growth and support job creation, we’ve been working hard to knock down trade barriers between our two countries. Let me give you three examples:

“First, we put the U.S.-Mexico cross-border trucking dispute on a path to resolution. Last month, we secured relief for U.S. manufacturers, farmers, ranchers, and workers who had been facing retaliatory duties imposed by Mexico on more than $2 billion of U.S. goods. And the remaining duties will be suspended when the first Mexican carrier receives authorization to operate in the United States.

“Second, we reached an agreement with Mexico in May that will save time and money for U.S. telecommunications equipment manufacturers by allowing them to test their products only once before exporting them to Mexico.

“Mexican regulatory authorities will accept tests performed by recognized U.S. laboratories, rather than requiring additional testing before the American products can be sold in Mexico.

“Third, in January, the U.S., Canada, and Mexico accepted a new mutual recognition agreement that will allow accountants in each of our countries to provide services across borders more easily. Under this agreement, each of the accounting professions have agreed to accept the credentials issued by the others.

“These are just some of the practical steps we have taken to make it easier for our farmers, ranchers, workers, manufacturers, and service providers to do more business on both sides of the border, in support of more jobs here at home.

“Now let me take a moment to share some ideas about how we can further enhance bilateral trade to support well-paying jobs and working families. Here are three things we should consider:

“First, we have to ensure that the NAFTA rules of origin are adjusted to reflect changes in technology and production methods so that manufacturers can continue to benefit from NAFTA. For example, right now we are working to liberalize rules of origin for environmental goods like filters and clean technologies, in order to promote exports of these important products.

“Second, we have to take a hard look at border and customs procedures, with a focus on facilitating the secure, efficient, and rapid flow of goods and people.

“I know these issues are critically important to your communities, because frankly Congressman Reyes raises it every time he sees me. Before we even sat down to lunch today, he was talking about the need for more Customs and Border Patrol officers to expedite commerce and trade and reduce wait times at the bridges.

“I’ve seen the situation for myself as well. Last year, I was honored to represent the Administration at the opening of the new Anzalduas Bridge, connecting Mission, Texas and Reynosa, Tamaulipas.

“Furthermore, I can assure you that the U.S. State Department is leading bilateral and interagency Administration efforts to make significant progress in upgrading border infrastructure, implementing innovations in port of entry operations that advance both citizen safety and global competitiveness, and increasing our capacity to prevent and address violence and criminality in the border region.

“Moving forward, USTR will continue to contribute to the Administration’s comprehensive efforts to achieve President Obama and President Calderon’s shared vision of a ‘border for the 21st century.’

“Third, we have to help small and medium-sized businesses export more. As part of President Obama’s National Export Initiative, USTR has put a priority on helping more small businesses grow through international trade.

“Research shows that when U.S. small businesses begin to export, their first customers are most likely to be in Mexico and Canada. But one of the main challenges small- and medium-sized businesses face is access to information.

“So in January, we worked with our NAFTA partners to publish a guide for small businesses looking to export throughout North America.

“There are just three of the many ways we can further enhance the vital economic and trade partnership between our two countries to increase competitiveness and grow jobs.

“But of course, the benefits of trade are not limited to neighbors alone. The more we open markets for American producers to compete all around the world, the more jobs we can support here at home.

“That’s why we need to pass the trade agreements with South Korea, Colombia, and Panama, so that we can secure the estimated $12 billion in additional GDP and tens of thousands of jobs that are on the table.

“At the same time, we’ll continue to make progress on regional trade initiatives like TPP and APEC, while always enforcing U.S. trade rights on behalf of American businesses and workers.

“Moving forward, we’ll advance these priorities, so that you can continue Texas’s proud tradition of trade. Together, let’s keep building shared prosperity for families and communities on both sides of the border. Thank you.”