Remarks by Ambassador Michael Froman at the World Trade Center Denver

Remarks by Ambassador Michael Froman at the World Trade Center Denver 

Denver, Colorado
June 23, 2014

*As Delivered*

Thank you, Karen, for that warm welcome.

And I’d like to thank the Denver World Trade Center for hosting this event, and for all the excellent work you do to promote Colorado exports.  Governor Hickenlooper recommended that I come here and speak, because he said this was a terrific example of collaboration between the public and private sector. And I know that the state governments, and the legislature, and all of you were very much involved in promoting advanced manufacturing and creating export products coming out of the advanced manufacturing sector here in Colorado.

President Obama underscored that the North Star of our overall economic strategy is to create jobs, promote growth and strengthen the middle class.   In the State of the Union this year, he said, “Opportunity is who we are. . . . And the defining project of our generation is to restore that promise.”

And trade plays a critically important role in that overall effort, because increasingly, exports are supporting American jobs. 

Following the 2008 financial crisis, when we were recovering from the worst economic situation in many years, American exports were an important engine for growth here in the United States, helping to keep businesses, big and small, alive while demand elsewhere slowed to a halt. Since then, fully one third of our economic growth has been driven by exports. We’ve created 9.4 million new jobs in this country over the last four years, and 1.6 million of which are supported by exports. 

This is an exciting time for trade.  Year after year, we’re seeing our exports climb to record levels. Last year, $2.3 trillion.

And Colorado set a record as well. $8.7 billion in goods exports in this state alone, not to mention exports of services as well.

Now, research shows that for every billion dollars of exports, it supports somewhere between 5,400 and 5,900 jobs. So Colorado’s exports support over 45,000 jobs in the state, and these are good jobs. These export-related jobs pay 13-18 percent or more on average than non-export related jobs. So we’re driving jobs, we’re driving increased wages, and we’re dealing with the inequality, in part, by the increase in exports.

This isn’t just a story of large companies, either.  Of the 5,500 companies in Colorado that export, 90 percent are small and medium-sized businesses, with 500 or fewer employees. We were just talking about Geo-Tech, and I know the room is filled with small- and medium-sized businesses here in Colorado that are benefitting from exports.

Later today, I’m visiting one of those companies, the Epic Brewing Company, which handcrafts 40 unique, award winning ales and lagers.

Epic Brewing just started exporting last year, they’ve got 6 employees dedicated just to the export market. They have already sent their beers to Japan, Brazil, Singapore, and Sweden. They expect their exports to double this year, and to double again next year.

And here’s what their CEO, David Cole, says about trade:  “Having a presence in foreign markets not only helps raise our brand awareness globally, but provides us with a revenue stream to create additional jobs and purchase more American-made brewing equipment to expand our production.”

Now I’m sure that many of the companies around here could say the same thing--by expanding exports, you are expanding business opportunities, allowing you to grow your business here, to create jobs, and to buy more Made-in-America product.

We believe we can do even better, and our goal is to harness the power of exports to help unlock additional opportunity for all Americans:

By opening markets for American workers and businesses, farmers, and ranchers-- I saw a very big group of farmers and ranchers this morning to talk about Colorado’s record levels of agricultural exports, and all the opportunities there.

By levelling the playing field for Americans by raising labor and environmental standards and intellectual property rights around the world;

And by bolstering the competitiveness of the United States as an exporter and as a locus of foreign investment.   

Right now, we are trying to negotiate two major free trade agreements, one with the Asia-Pacific and one with the European Union. Taken together, that will put the United States at the center of a free trade area that covers two thirds of the global economy.

Hardly a week goes by when I don’t get visited by some company from Europe or elsewhere, who comes and says, “You know, the United States is a great market, you’ve got a great rule of law, you’ve got an entrepreneurial culture, you have a skilled work force. Now you have abundant sources of affordable and cleaner energy. And when you complete these trade agreements, you will have free trade with two thirds of the global economy.” That make the U.S. the production platform of choice going forward. It makes the U.S. the place where companies want to make things, both to serve the U.S market, but also to export to the rest of the world.

So we see our trade policy as a critical part of our foreign investment policy, as well as a part of our manufacturing policy.

Right now, we are working, as I said, to complete a high-standard, ambitious, comprehensive agreement with twelve countries of the Asia Pacific region, including Japan, which is one of Colorado’s top export markets.  

The Trans-Pacific Partnership will deliver jobs, spur growth, increase exports, bringing benefits to our workers, businesses, and communities.  It will also include the strongest enforceable labor and environmental standards of any trade agreement in history, and will take on new issues like promoting a thriving digital economy, promoting innovation and a free Internet, and ensuring that state owned enterprises compete fairly with private firms.

TPP will also make it easier for small- and medium-sized businesses to operate across the Asia Pacific.

Right now, there are 525 million middle class consumers in the Asia Pacific, and that number is expected to grow to 2.7 billion by the year 2030—about 6 times the size of the U.S. market is expected to be then. The question is who is going to serve that market? Are they going to be buying Made-in-America products, or are they going to be buying products made by somebody else.

TPP will guarantee that the United States is not left behind our competitors, on the sidelines. It is important both economically, and strategically.

And by raising labor and environmental standards, we create wins on both sides of the Pacific.  For our partners, we create more sustainable labor and environmental practices that benefit their own people, and for Americans, we create a more level playing field for our workers. 

For example, TPP will establish the first ever rules and obligations to combat wildlife trafficking in a trade agreement.

Illegal trade in wildlife is a double-barreled treat.  Increase in demand for elephant ivory and rhino horn has triggered a dramatic and rapid increase in poaching that is a critical conservation concern. But is more than just an environmental issues because wildlife trafficking involves criminal gangs, sometimes even terrorist groups, who are funding themselves by poaching and sending these products to the Asia Pacific.

Right before coming here, I went to the National Eagle and Wildlife Product Repository, just outside of Denver. That’s where much of the product that we seize, the illegal products being traded, we seize at our borders and store it there. And it drove home both the scale of the problem, and underscored to me the importance of TPP succeeding and placing new disciplines to address wildlife trafficking.

In addition to TPP, we’re negotiating the Transatlantic Trade and Investment Partnership with the European Union. Now our relationship with the EU is already very broad, very strong. A trillion dollars of trade a year, $4 trillion of investment. 13 million workers on both sides of the Atlantic who owe their jobs to the transatlantic economic relationship.

Through T-TIP, we’re going to eliminate billions of dollars in tariffs, as well as make substantial progress in reducing a whole range of non-tariff barriers.  The real opportunity of T-TIP and the real challenge is to see whether we can take two advanced, industrialized, highly regulated economies and bring them closer together and bridge the differences in how we regulate without lowering the overall level of protection for health, safety and the environment.

Now with the $8.7 billion that Colorado exports, two thirds of it go to countries that we’re currently negotiating with in TPP and T-TIP.  And completing those agreements will allow Colorado’s exporters to both benefit more from those relationships and develop new markets.

In addition to these two big agreements, TPP and T-TIP, we’re negotiating agreements to eliminate tariffs on information technology products, on environmental goods, and we’re negotiating agreements to liberalize services trade around the world. And we have 2 million people here in Colorado who are employed in the services trade ranging from computer software to energy to finance.

So with that, let me close by saying a word about Trade Promotion Authority, and build on what Karen said here today. The predecessor of Trade Promotion Authority indeed was signed 80 years ago this month by Franklin Delano Roosevelt.  And that granted authority was congress telling the President he could go off and negotiate tariff agreements, he didn’t even have to bring them back to congress for approval. Now we have a much more robust set of procedures. Trade Promotion Authority is the way the congress gives us our marching orders, tells us what to negotiate. The way congress tells us how to work with it, before, during, and after the negotiations. And then lays out procedures by which congress will either approve or disapprove the agreement at the end of the day. Under [TPA], congress has the first and the last word and is part of the process every step of the way. And frankly I don’t know any other area of policy where there is more collaboration between the executive and congress than trade policy.

TPA is currently expired.  And we’d like to see it renewed as soon as possible. 

You know as President Obama said in the State of the Union, “China and Europe aren’t standing on the sidelines.  Neither should we.” And that’s absolutely right. Make no mistake about it – our competitors are not sitting still. And staying on the sidelines is no way to win.    

Some of this we can do through enforcement. And under this President, my office has brought 18 trade enforcement actions to the World Trade Organization, and half of them against China.  Just last month, I was pleased to announce that we prevailed again in an action against illegal Chinese interference within our auto trade from the United States.

We can’t just settle for enforcing existing trade agreements and pretend the rest of the world is not moving on and changing around us.

We need to be out there fighting for the new markets that we need ourselves for our own growth.

Our competitors are negotiating bilateral, trilateral, regional agreements.  And believe me, not all our competitors share our interests and our values.  Not all of them are putting at the center of their work increasing labor and environmental standards, or protecting intellectual property rights or putting a disciplines around state-owned enterprises or making sure there’s a free and open internet.

You know the world is becoming more interconnected by the day. Globalization is a reality and we can’t turn back the clock.  The only question is whether we going to shape globalization, or shaped by it.

And the way we shape it is to capitalize on our competitive advantages, by finalizing TPP and T-TIP, by leveling the playing field by raising labor and environmental, and intellectual property standards around the world, and by ensuring that we fully enforce our trade rights we’ve negotiated under our agreements.

Trade was indispensable to us as a nation as we move out of the Great Recession over the last few years, and it’s a key component of our strategy going forward to provide opportunity for all Americans by supporting jobs, growing our economy, and strengthening the middle class.  You see the benefits of trade right here in Denver and across the state of Colorado, and I look forward to working with all of you to deliver on this very important agenda.

Thanks very much and I’d be happy to take your questions.