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Remarks by Ambassador Michael Froman to the National Association of Counties

Remarks by Ambassador Michael Froman to the National Association of Counties

Washington, D.C.
February 23, 2015

*As Prepared for Delivery*

“Thank you, Riki.

“This is a special opportunity. It’s special because of what county, parish, and borough officials represent.  For most Americans, you’re the first face of government. You’re providers of vital services.  You’re our first responders and lead economic architects.

“Your back probably isn’t the first to be patted when everything is working well, but your phone is probably the first to ring when something isn’t.

“Let me begin by thanking you for that work, for reminding everyone that public service isn’t about publicity and getting noticed, it’s about service and getting things done. It’s about building stronger, safer, more vibrant communities.  And there are a lot of different communities represented here today. 

“Somewhere in this room, we have county elected officials from Slope County, North Dakota, a small county with 761 residents, as well as representatives from Los Angeles County, California, home to 10 million residents.

“We have representatives from Union County, New Jersey, which spans 105 square miles, as well as from San Bernardino County, California, which spans 20,105 square miles.

“We have representatives from Madison – Madison, Alabama; Madison, Illinois; Madison, Mississippi; Madison, Montana; and Madison, New York. 

“Running through this ocean of diversity are some strong currents – shared aspirations and challenges requiring collective effort, the kind of effort that was necessary to pull us out of the Great Recession.  Six years ago, we were losing 800,000 jobs a month, unemployment was on its way to 10 percent, and the financial system and housing market were in shambles.  Now, we’ve seen 59 months of job creation – the longest, uninterrupted span in recorded history.  Unemployment is down to 5.7%.  We created more jobs last year than any year since the 1990’s.  We’ve come a long way since the Great Recession, but we’ve still got work to do.

“People are often surprised when they find out just how much trade has contributed to this recovery.  Since 2009, the increase in U.S. exports has been responsible for nearly one-third of our overall economic growth.

“Last year, the United States exported $2.35 billion in goods and services—our fifth record-breaking year in a row.  Today, “Made-in-America” is making a comeback.  Record exports are supporting a record number of jobs—11.3 million at last count, including 1.6 million new jobs over the last 5 years. Thanks in part to these rising exports, factory employment is rising at its fastest pace in 18 years. Across America, wages are finally starting to rise again.

“And as all of you know, it’s not just the number of jobs that matters. What matters is creating more jobs Americans want. Jobs with solid paychecks and a sense of purpose. Jobs with a future.

“Those are exactly the types of jobs that trade supports. We know that, on average, working for a business that exports means that you’re getting paid up to 18% more than if you worked for a business that didn’t export. Businesses that export also tend to hire more, their workers are more productive, and they invest more in innovation and research. We also know that businesses that export are better able to weather economic downturns, so jobs related to exports are more secure than jobs not related to exports.

“At this point, it shouldn’t come as a surprise that President Obama’s trade agenda is a central part of “Middle Class Economics.” Smart trade policy doesn’t just lower the cost of a bag of groceries for American families, it puts more money in middle class pockets.

“That’s true whether you’re living in rural, urban, or suburban America.

“It’s true in Story County, Iowa, where Rick Kimberley showed me how his family raises corn and soybeans on roughly 4,000 acres of land. Roughly half of all those soybeans grown and one out of every three rows of corn are destined for export, so trade plays a critical role in keeping the Kimberley farm in family hands.

“It’s true in Cuyahoga County, Ohio, where Ron Swinko showed me the production floor of Jet Incorporated, a small business that’s creating jobs by designing, manufacturing, and exporting wastewater treatment systems. When their sales in the U.S. took a hit during the recent financial crisis, Ron quickly turned to exports and that let him hire, rather than fire, throughout the recession. Now, Jet exports to 33 countries, and those exports account for one quarter of Jet’s total sales.

“And it’s true in Tarrant County, Texas, where just last week, I joined Representative Eddie Bernice Johnson and Dallas Mayor Mike Rawlings for a tour of a Mary Kay manufacturing facility. More than half of their cosmetics made in Dallas are sold overseas.

“These three examples are just the tip of the iceberg when it comes to the full benefits of trade. It’s not just the employees at the exporting companies who benefit.  It’s all the workers who benefit from the spillover effect of exports.  For example, in 2013, every dollar in U.S. agriculture exports stimulated another $1.22 in business activity in the U.S. economy.

“Just last week, for example, Secretary of Agriculture Tom Vilsack was in Johnson County, Missouri, visiting a new facility that can handle more than half a million shipping containers each year. Rising agricultural exports are a big reason that facility was needed, and now the facility itself has become a major economic driver, attracting developers to add warehouse space.

“It’s easy to forget how many companies can be involved in the production of a single export these days. As a consumer, pretty much all you see is the finished product. But modern supply chains consist of many links, each of which is an opportunity for our workers and businesses to capture value.

“You’re probably heard of Gillette and Oakley, but what about El Dorado Molds? That’s a company in Sacramento County, CA, that builds plastic molds for Gillette razors and Oakley sunglasses, among other products that are made in America and sold around the world. Maria Contreras-Sweet, the U.S. Small Business Administrator, visited that facility last week. Large, well-known companies depend on small businesses for the inputs and services they need to remain globally competitive and that means trade is important to those small businesses too.

“Many people assume exporting is a game that’s limited to big businesses, but in reality, 98% of our 300,000 exporters are small businesses. Still, the vast majority of American small businesses aren’t exporting at all. When 95% of the world’s customers are living outside our borders, that’s a massive economic opportunity, for growth and good jobs, that’s waiting to be tapped.

“A big part of that opportunity outside our borders is the rise of a global middle class. We’ve already seen that as people move up the global income ladder, they want to buy more of the high-quality goods that America is great at making.

“When it comes to agriculture, no one is better at producing high-quality protein.

“When it comes to reputation, we’ve got seven out of the top ten global brands.

“When it comes to innovation, our workers are among the most productive in the world.

“Clearly, the question isn’t whether we can make things. The question is whether we’ll have the opportunity to sell what we make to the rest of the world.

“Just consider the barriers that our workers and businesses are currently facing in the Asia Pacific, the world’s fastest-growing region. American autoworkers are handicapped by tariffs that can reach 30 percent in Malaysia.  American farmers are forced to contend with tariffs as high as 40 percent on poultry in Vietnam.  Meanwhile, foreign competitors have struck trade deals that give their own exporters an advantage, getting their products to consumers in those same markets with significantly lower or even no tariffs.

“To knock down these barriers and countless others like them, we’re moving forward with the most ambitious trade agenda in American history. In the Asia Pacific, our main tool for leveling the playing field for American workers and businesses is called the Trans-Pacific Partnership, or TPP. When completed, this agreement will cover 11 other countries and nearly 40% of the global economy. It will grow our exports by more than $123 billion by 2025, according to one estimate, and support many more high-paying jobs.

“Just as importantly, TPP gives us the opportunity to protect workers, to protect the environment, and to tackle a number of issues that have never been addressed.

“TPP will include the highest and most enforceable labor and environmental standards of any trade agreement.

“TPP – for the first time in any trade agreement – will put disciplines on state-owned enterprises and ensures a free and open Internet.

“TPP will ensure that the 40 million Americans whose jobs are directly or indirectly dependent on innovation, invention and creativity enjoy the fruits of their labor – from the inventor in her garage to the union carpenters I met making Hollywood sets.

“Across the board, TPP will help restore the connection between hard work and rightful reward by giving Americans a fair shot in these markets. And we know that when the playing field is level, when trade is fair, our businesses and workers can compete and win.

“These are exciting times because the finish line for TPP negotiations is in sight. And that means more good jobs and a stronger middle class here at home.

“The first step toward realizing those gains is to secure bipartisan trade promotion authority.  The President has asked for it.  The Republican leadership in Congress has indicated it’s something they want to work on with the President.  It’s time to get it done.

“Trade promotion legislation is the way Congress gives direction to the President about what to negotiate, how to consult with Congress before and during the negotiations and how Congress will decide at the end of the day – after an extensive public debate – whether to support or reject a trade agreement.  It’s how Congress has worked with American Presidents since FDR, including every President—Republican and Democrat—for the last four decades, to ensure that the United States takes the lead in shaping the global trading system.

“But trade promotion legislation hasn’t been updated since 2002.  Think about how much the world has changed since then.

“Consider the rise of the digital economy. Today, people around the world have downloaded well over 25 billion songs through I-Tunes. In 2002, the I-Tunes store hadn’t even been invented.

“Consider the rise of state-owned enterprises. Today, 12 of the largest 50 companies on the Fortune 500 Global list are state-owned enterprises. In 2002, only one of the largest 50 companies on that list was state-owned.

“Consider the rise of emerging markets. Today, more than one out of every four companies on the Fortune Global 500 list is from an emerging market. In 2002, only 4% of the companies on that list were from emerging markets.

“Consider that there’s now a solid consensus that enforceable labor and environmental standards must be a major part of any trade agreement. In 2002, there was no such consensus.

“All of these developments remind us that, in today’s global economy, the only constant is change. It’s time to update trade promotion legislation to meet the needs of today’s global economy and lock into law the progress we have made on a number of issues, including labor and the environment.  A bipartisan trade promotion bill will do just that, addressing these changes and empowering America to continue leading on trade. It will help us use trade policy the right way, bringing good jobs to your communities and unlocking opportunity for the millions of Americans you represent. It will help our country come together, drawing strength from our diversity and helping us realize our shared aspirations, just as you have come together here today.

“Trade policy might not be at the top of your agenda every day.  You’ve got roads to fix and schools to manage.  But done right, trade policy is a necessary component of any community’s successful economic strategy.  Done right, trade agreements help position the U.S. as the most attractive place to invest and produce – a place where people want to make things, grow things, and then sell them all over the world.  That’s how trade strengthens our communities.

“As we move ahead with trade promotion legislation, as we reach closure on these negotiations, we look forward to working with all of you to underscore the importance of trade – done right – to your communities.

“Thank you very much.”