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Remarks by Ambassador Miriam Sapiro at the Chicagoland Chamber of Commerce
Chicagoland Chamber of Commerce
September 7, 2012
*As Prepared for Delivery*
"Good afternoon. Thank you for your very kind welcome. I would like to thank you and the Chamber of Commerce for organizing this event and inviting me to be here today.
"It’s such a pleasure and honor to be here in Chicago and to have the opportunity to share with leaders in the Illinois business community a few of the key export opportunities the Obama Administration is creating for Illinois’ businesses through our ambitious trade agenda.
"I particularly welcome the invitation to come to the Chamber because you represent businesses in one of the top exporting states in the country. And Illinois’ export focus is helping us retain and create jobs here and across the country. Illinois is our fifth largest exporter, sending almost $65 billion in merchandise exports and nearly $8 billion in agricultural exports to the rest of the world.
"As you may know, every one billion dollars in U.S. exports of goods and services is estimated to support over 5,000 jobs.
"Illinois companies of all sizes and their employees benefit from job-creating exports. Of the nearly 16,000 companies that export from Illinois, 90 percent are small and medium-sized enterprises with fewer than 500 employees. These small and medium-sized firms generated over one-fifth of Illinois’ total exports of goods.
"And right here in the Chicago-Naperville-Joliet area, companies both large and small exported almost $34 billion in goods – such as machinery, chemicals, transportation equipment, computers, and electronic equipment.
"Increasing U.S. exports are a source of growing economic strength and jobs. Last year, U.S. exports of goods and services accounted for a record 13.8 percent share of GDP. Over the last 12 months, U.S. goods and services exports exceeded $2 trillion, putting us over 36 percent above the level of exports in 2009. U.S. jobs supported by exports of goods and services increased by an estimated 1.2 million between 2009 and 2011.
"While these are impressive numbers, the Obama Administration wants to see them grow more. I’d like to describe how we are supporting greater economic growth and job creation here in Illinois and across the country.
"It’s important to remember that President Obama inherited an economy that was shedding 800,000 jobs a month. The United States had lost more than 8 million jobs as a result of the worst recession since the Great Depression.
"That’s why this Administration is working hard every day to restore the economic security of the middle class and create an economy where everyone gets a fair shot, everyone does their fair share and everyone plays by the same set of rules. Our jobs numbers came out today. I am pleased to say that unemployment is down. Our economy has added private sector jobs for 30 straight months now, for a total of 4.6 million jobs during this period.
"But more needs to be done. That’s why the Obama Administration is calling on Congress to take up the remaining measures of the American Jobs Act that will create jobs and strengthen the middle class. Independent economists have said that if Congress enacted the remaining proposals in the American Jobs Act, we could create a million new jobs. In the meantime, the Administration is doing whatever it can on its own to boost growth and jobs.
"One key to our economic recovery is increasing exports of products stamped “Made in America”, which supports jobs here at home. We want to see U.S. exports double before the end of 2014, which would support an additional 2 million good, high-paying export-related jobs. After years of decline, we have created over half a million manufacturing jobs in the last two and a half years, and we want to create more.
"I’d like to commend Governor Quinn for proactively focusing on the importance of creating trade opportunities and business investment for Illinois. He created the Illinois Export Advisory Council in April and is aiming to double Illinois exports by the end of 2014 –dovetailing with President Obama’s initiative for the country. I’d also like to recognize the Chairman and CEO of Navistar, Daniel Ustian, who chairs the Council.
"So how can we work together to boost trade?
"The Obama Administration is continuing to take a number of steps. The goal of the Office of the United States Trade Representative, or “USTR”, is to help increase U.S. exports by focusing on two fronts. First, we work to open new markets by negotiating trade agreements that reduce or eliminate tariffs and non-tariff barriers, which would otherwise keep U.S. high-quality products and services out of foreign markets. And second, we ensure that other countries live up to their trade commitments through a variety of enforcement mechanisms.
"With respect to the first challenge, we successfully secured Congressional approval of three market-opening free trade agreements last October – with South Korea, Colombia, and Panama, bringing to 20 the number of countries with which we have concluded FTAs. Two of these agreements have already entered into force – Korea in March and Colombia in May – and the third is on its way.
"Panama is finalizing the necessary reforms to its domestic laws and regulations to make entry into force possible and we expect that agreement to enter into force soon.
"One of the tangible benefits of such negotiations, which can take years to complete, is that U.S. goods become less expensive and more attractive to consumers in other countries. These agreements help our companies, not only by eliminating duties on most U.S. exports, which make your goods more affordable and competitive, but also by reducing customs fees and wait times at foreign borders; expanding opportunities to bid on foreign government contracts; and by ensuring stronger protection for U.S. innovation and investment.
"Korea and Colombia – our two newest trade agreement partners – present solid opportunities for Illinois.
"Both agreements eliminate tariffs and other barriers on most agricultural products, increasing export opportunities for agricultural products like those produced in Illinois, such as feed grains, soybeans, beef, and pork. These agreements also eliminate tariffs and other barriers on key manufacturing goods produced here, such as computers and electronics, machinery, and chemicals manufactures.
"We are working hard with the Government of Panama to make new opportunities for Illinois goods and services available in the coming weeks.
"In addition to our bilateral trade agreements, we are working with key regions. As you know, we are negotiating an ambitious, ground-breaking Trans-Pacific Partnership (TPP) agreement that will create significant new opportunities to increase U.S. exports. The Asia-Pacific region includes some of the world’s most-dynamic economies, representing more than 40 percent of global trade. The region is already a key destination for U.S. manufactured goods, agricultural products, and services, accounting in 2011 for over 60 percent of U.S. goods exports and nearly 75 percent of U.S. total agricultural exports.
"Canada and Mexico are expected to join the TPP negotiations in October. Illinois's largest export market in 2011 was Canada, exporting over $19 million in goods alone, 30% of the state's total goods exports. And Mexico is Illinois' second largest export market, with $5.7 in Illinois goods flowing to Mexico. Joining TPP will generate even further opportunities for U.S. export growth, and allow U.S. companies to leverage their existing North American supply chains by exporting goods to other TPP countries.
"With the European Union, we have a huge two-way trade and investment relationship, and we share a focus on supporting greater economic growth and jobs right now. That’s why we are studying with the European Union ways to enhance our mutual growth through the High-Level Working Group on Jobs and Growth, which was established by President Obama and EU leaders late last year. The Group has been hard at work since last December identifying and analyzing potential options to boost trade and investment.
"We provided an interim report to President Obama and his European counterparts in June, concluding that “a comprehensive transatlantic trade and investment agreement, if achievable, is the option that has the greatest potential.” We and our EU partners are continuing to consult with each other and with our respective legislatures and private sector stakeholders, with the aim of delivering a final recommendation to the leaders by the end of the year.
"We also are engaging with the key Middle East and North African countries in a new Trade and Investment Partnership, and working with European partners to build on the opportunities created by the Arab Spring. This region has such great potential but at present it trades less with itself than any other region. We want to work to change that and also boost trade with the United States.
"The Obama Administration also has launched a new Africa Engagement strategy with several prongs. We are pursuing a new trade and investment partnership with the East African Community (EAC), building on our existing relationship under the African Growth and Opportunity Act (AGOA) and the U.S.-EAC Trade and Investment Framework Agreement. We are exploring a regional investment treaty, a trade facilitation agreement, and a commercial dialogue. All of these efforts aim to improve access for U.S. exports to this growing market.
"With all these partnerships, our goal is to provide you with new business opportunities by reducing trade barriers, improving the business environment, and encouraging more open investment regimes.
"At the multilateral level, we also continue to eliminate barriers for U.S. exporters through our work in the World Trade Organization (WTO). Following last December’s recognition by all WTO Members that we needed a new approach to multilateral negotiations, we are making progress in Geneva on a several fronts now.
"For example, we are building on progress made during the Doha round to forge a multilateral agreement on trade facilitation. We are also seeking to expand the success of the International Technology Agreement, and we are exploring exciting possibilities for a new plurilateral services agreement. And, importantly, we also continue to add members to the WTO’s rules-based trading system.
"Russia, the world’s seventh largest economy, became the 156th Member of the WTO on August 22. We negotiated with Russia for nearly 20 years on its accession package and secured important commitments that will help Illinois companies. Russia’s membership in the WTO should open up significant new market opportunities for U.S. businesses, and farmers, including those in Illinois.
"Currently, however, U.S. exporters cannot enjoy these benefits. While both the United States and Russia are WTO Members, the WTO agreement does not yet apply between us. This is because the Jackson-Vanik Amendment – enacted in the 1970s to encourage the Soviet Union to allow emigration – now operates to prohibit the United States from providing Russia with permanent normal trade relations (PNTR) as required under the WTO rules. In order to provide Russia PNTR, Congress needs to enact legislation ending the application of Jackson-Vanik and authorizing extension of PNTR to Russia.
"Extending PNTR to Russia, and ensuring that American businesses and workers can reap the full benefits of Russia’s membership in the WTO, is the President’s highest legislative trade priority.
"As long as the WTO Agreement does not apply between the United States and Russia, then U.S. businesses, and workers in Illinois and elsewhere will not be able to realize the full benefits of Russia’s membership in the WTO, and they will be at a competitive disadvantage with respect to their competitors in Europe, Asia and Latin America. We hope to see Congress address this problem, before real harm is done, and put legislation on the President’s desk for signature as soon as possible after it returns from its August recess next week.
"Just as important as breaking down trade barriers is enforcing the agreements that result. The Administration has a strong record of taking enforcement actions to ensure compliance with our trade agreements and WTO rules and ensure that Americans see the benefits promised by those pacts. When there is no other avenue, vigorous enforcement helps American farmers, ranchers, manufacturers, and service providers remain globally competitive even in today’s difficult economic environment.
"In recent months, we have challenged Chinese rare earth export restraints, Indian restrictions on agricultural imports and European aircraft subsidies. The European aircraft subsidies case was the largest case ever heard by a WTO panel. The WTO Appellate Body upheld a panel’s finding that $18 billion in subsidies conferred on Airbus by the EU and member countries were illegal, hurting the U.S. aerospace industry and its workers with lost sales and loss of global market share. Thanks to this finding, the jobs of thousands of U.S. aerospace engineers and electricians and related suppliers are more secure. More Americans will have a chance at future jobs as the EU comes into compliance and our aircraft manufacturers compete on a more level playing field.
"And the EU was handed the largest ever WTO defeat in a case in which the EU asserted that the United States provided almost $20 billion in subsidies to Boeing. A WTO panel and the WTO Appellate Body rejected the vast majority of the EU’s claims. The Appellate Body found that the value of subsidies provided by the United States was in the range of $3-4 billion, and those subsidies had far fewer distortive effects on the aircraft market than subsidies provided by the EU.
"We also successfully defended our right to impose duties under the China Specific Safeguard Mechanism on disruptive imports of certain passenger and light truck tires from China. Both a WTO panel and the WTO Appellate Body rejected all of China’s claims against additional duties imposed by President Obama in September 2009 pursuant to section 421 of the Trade Act of 1974, which implemented the transitional safeguard in China’s Protocol of Accession to the WTO. As a result of this win, the additional duties on imports of tires from China, which have helped to restore U.S. tire industry jobs, will continue to be assessed an additional duty of 25 percent until September 25, 2012.
"The Obama Administration also broke new ground in enforcing labor rights when USTR requested the establishment of an arbitral panel pursuant to the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) for Guatemala’s apparent failure to effectively enforce its labor laws. This is the first labor case the United States had ever brought under a trade agreement, and it reflects the Administration’s determination to protect the rights of workers whether in America or abroad, and to provide a level playing field for workers here at home.
"Most recently, the United States successfully challenged China’s restrictions on foreign suppliers of electronic payment services (EPS) for card-based transactions. EPS enable, facilitate, and manage the flow of information and the transmission of funds between banks that issue credit and debit cards and merchants’ banks. Millions of payment card transactions occur every day in China and each year well over one $1 trillion worth of electronic payment card transactions are processed there. China’s discriminatory measures severely distort competition and prevent participation by foreign suppliers of EPS for payment card transactions. The WTO panel’s findings under the General Agreement on Trade in Services make clear that China’s pervasive and discriminatory measures deny a level playing field to foreign service providers, including the American EPS providers that are world leaders in this sector.
"To bolster this winning record even further, the President has designated additional resources to ensure enforcement of our trade agreements, most recently with the creation of the Interagency Trade Enforcement Center (ITEC). The ITEC is drawing expertise from various agencies to focus even more intensively on monitoring and enforcement.
"These are a few of the many efforts USTR and the rest of the Obama Administration are taking to open markets overseas to help increase our exports and support our greater growth and jobs.
"U.S. exporters in Chicago, in Illinois, and throughout the country are working every day to make products and sales in an increasingly competitive world. And the Obama Administration is committed to helping them every step of the way towards success.
"Let me thank again the Chamber for hosting me today, and open the floor for any questions you may have."