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Remarks by Ambassador Michael Froman to the National Foreign Trade Council Upon Receiving the World Trade Award

Remarks by Ambassador Michael Froman to the National Foreign Trade Council Upon Receiving the World Trade Award

October 15, 2015
Washington, D.C.

Thank you, Alan. 

It’s an honor to receive this award, and especially humbling given the distinguished list of past recipients, from Secretary Hull to Senator Hatch. And let me add my congratulations to Secretary Pritzker for the honor she received earlier this evening. Penny has been a true partner in everything of significance that we’ve done and a driving force behind what has been a historic year for U.S. trade policy.

The man for whom this award was originally named, Captain Robert Dollar, lived a remarkable life, and in his memoirs, among other adventures, he wrote about the National Foreign Trade Council’s early days.

The year was 1914.  Commerce had come to a halt by war in Europe.  President Wilson called a meeting to discuss what could be done to restore our foreign trade. Out that meeting of fifty or so, a smaller group of four was chosen to draft an Emergency Shipping Bill.

As Dollar wrote in his memoirs, “Our work was accomplished in three days, during which there was not much sleep…Into that short time was probably crowded more and greater events than in many months before.”

Sounds like a weekend I recently spent in Atlanta.

The other day, one of my colleagues asked whether Congress ever rejected a trade agreement, and I learned that in 1883, during the Chester Arthur Administration, the Senate ratified but the House refused to implement a Reciprocity Treaty with Mexico.  That agreement has been negotiated personally by former President Ulysses S. Grant.  Now he would have been a terrific USTR.  An article from the Chicago Tribune at the time describes Grant’s case for the treaty, and I quote:

“The advantages of a direct trade, transported largely over American railroads and carried on by American merchants, can scarcely be questioned by intelligent people who give the matter any thought.  The objections to the treaty are suggested by selfish interests, and even if they were valid, they would not offset to any appreciable extent the advantages of reciprocal trade.  The tobacco-growers and manufacturers of this country will not be injured…The sugar interests will not be threatened…Certainly no Chinese wall should separate two Republics on the same continent.”

Now, I’m not sure I could get away with using that kind of rhetoric, but it does demonstrate that, when it comes to trade, clearly the more things change, the more they remain the same. 

As the NFTC enters its second century, let’s take a moment to think about everything we’ve done together this year:

The Africa Growth and Opportunity Act was up for renewal – and together, we got it not only renewed, but upgraded and extended for ten years, the longest extension in the program’s history.

The Generalized System of Preferences had lapsed two years ago – and together, we got it renewed.

We reached agreement on the scope of coverage for the expanded Information Technology Agreement. 

Trade Promotion Authority hadn’t been updated in 13 years. Indeed, when the last version of TPA was passed in 2002, there were 600 million Internet users worldwide and Facebook was just a figment of the imagination. Today, there are more than 3 billion Internet users, and if Facebook were a country, it would be the most populous on Earth.

In a rare display of bipartisanship, we worked with Congress not only to update TPA but also to ensure our workers would have the tools they need to compete by passing Trade Adjustment Assistance.

And then there’s the Trans-Pacific Partnership.  After 5 ½ years of intense negotiations, we finally brought it to a successful conclusion – an ambitious, comprehensive, high-standard agreement.  

It’s always a bit surreal to be part of something in the news.  Sometimes you feel a little cognitive dissonance.  After every step we took forward, however big or small, skeptics claimed that we were moving backwards. When we said “significant progress,” they said “stunning defeat.” When we said the talks had “excellent momentum,” they concluded we had suffered an “epic meltdown.” But whatever happened, we always insisted that the substance of the negotiations would drive the timetable, and we refused to lower the high bar that President Obama and Congress set for TPP.

And then, last week, together, we got it done.

Thanks to your hard work, the world’s most ambitious trade agreement is now on the cusp of being realized. This is a deal that our country can be proud of. It will support more high-paying jobs at home, strengthen our middle class, and advance America’s strategic interests overseas.

It will level the playing field for American workers and businesses by eliminating over 18,000 taxes that TPP countries currently levy against U.S. exports, everything from Washington apples to Michigan cars to North Carolina textiles.

It will give our small businesses powerful new tools to help them export, thanks to the first chapter in any trade agreement expressly dedicated to their needs.

It will give businesses of all sizes a fair shot, thanks to the first disciplines on state-owned enterprises of any trade agreement.

It will ensure that individuals in America and around the world can tap the expanding opportunities offered by a free and open Internet.

It will protect the 40 million Americans whose jobs depend on innovation with strong and balanced IP standards that also ensure the benefits of innovation are widely shared.

As we’ve said from the beginning, TPP must promote not only our interests but also our values. That’s exactly what this deal does.

It will support sustainable growth, development, and poverty alleviation.

It will recognize the basic labor rights of hundreds of millions of workers and give those workers new tools to protect those rights.

And it will protect our oceans, forests, and wildlife, with environmental standards that are not only the strongest of any trade agreement, but also fully enforceable.

When you step back and consider everything that TPP will help achieve, it’s clear that TPP’s importance is strategic as well as economic – it’s a victory for the open, rules-based system the United States has helped lead for decades. It’s a concrete manifestation of our commitment to the Asia Pacific and a long-term investment in global peace and prosperity.

As Christine Lagarde, Managing Director of the IMF, said, TPP is part of the solution for avoiding a “new mediocre” in the global economy.  She added that TPP “is not only important because of the size, as the signatories countries account for about 40 percent of global GDP; it also pushes the frontier of trade and investment in goods and services to new areas where gains can be significant.”

We know that every additional billion dollars of exports supports an average of more than 5,000 jobs, and that export-related jobs pay up to 18 percent more on average than non-export related jobs.  We know that businesses that export hire more, pay more, and grow faster.  So, to create jobs, increase wages and strengthen the middle class, TPP is part of the answer.

Our workers are the best in the world – 30 percent more productive than Germany’s, twice as productive as South Korea’s, three times more productive than China’s. Our businesses are among the most innovative, and customers around the world want to buy things labeled “Made-in-America.” We’ve got what it takes to compete, and TPP is going to help more of our workers and businesses win.

You might have noticed by now that we use a lot of sports metaphors in trade. We talk about competition, about leveling the playing field, about setting the rules of the game. And those metaphors are helpful in many respects. Today’s playing field really is tilted against our workers and businesses. They face tariffs twice as high abroad on their exports as foreign companies face here in the United States.  They face a litany of rules that are rigged against them in the form of non-tariff barriers, unfair competition from SOE’s and new forms of digital protectionism.

But the truth is, trade isn’t like any game out there. There’s no calling time out. In the past decade, hundreds of trade agreements have been negotiated in the Asia Pacific alone, the vast majority of which lack our focus on high standards. And right now, new agreements are being negotiated that reflect a very different approach to global trade.  The choice isn’t between the status quo and TPP.  It’s between TPP and a set of rules defined by others.  So there’s a real urgency here if we don’t want to be dealt out of the world’s fastest-growing region. Global competition stops for no nation.

And unlike sports, it’s impossible to be a spectator in today’s global trading system, someone who is simply watching and unaffected by the outcome. Globalization is a reality that isn’t going away. That means we’re all in this together, and we’re going to have to fight for what we want and need. If we sit on the sidelines, we’ll end up living with someone else’s model for trade, one that doesn’t reflect our interests and our values.  We can’t walk away. We need to lead.

That leadership begins at home, and the NFTC will have an indispensable role to play in the coming weeks and months, as we begin this next, important phase. We’ll need your help in explaining the significance of this agreement. You understand the stakes better than almost anyone, and we need you to lend your voices and your stories to this effort.

Thank you again for this important recognition, and even more so, for the work you’ve done for so many years. I look forward to continuing that work together.