Remarks by Ambassador Ron Kirk
March 12, 2010
American Apparel & Footwear Association Annual Executive Summit
*As Prepared for Delivery*
"Thank you all for having me today. And in particular thank you to AAFA's President and CEO, Kevin Burke, for putting this event together, and to Inez Tenenbaum for her remarks. It's great to be here.
"Speaking to the AAFA is truly a pleasure. Because AAFA members understand and appreciate the potential of international trade. How could you not? AAFA companies are at work in every country in the world. And AAFA members depend on America's trade agreements and trade preference programs to keep business moving.
"In fact, because of you, when people talk about the household impact of global trade, the first place they turn is often their closet.
"In fact, in his recent book, "Mad About Trade," Dan Griswold details the country of origin labels on every article of clothing in his closet - right down to his underpants.
"Now, I'm not going to get that personal. But, as those of you in the industry know, if we took a look in the closets of most Americans, we would likely find that their clothes were made in a dizzying array of countries around the globe.
"But while many Americans may not know where their clothes were assembled, they know that their clothes are the products of American companies - because they sought out American brands. And the value-added design, marketing, and sales jobs required to produce and distribute those products are all based in the U.S.A.
"Today, I want to talk about how the Obama Administration is supporting job-creating trade opportunities here at home. And we are advancing American interests, including fundamental interests of the apparel industry, in the international trade arena..
"Every single shirt or shoe you produce starts with an idea for a new design or a new style. In some cases that process might involve innovation, such as the invention of a new fabric. Even if it doesn't, every product you make is branded with your company name, and the quality that name implies.
"Your brand and your inventions fall into the category of intellectual property - and your intellectual property is a hot commodity not only among legitimate buyers but also, unfortunately, among counterfeiters and thieves.
"A recent letter from AAFA President Kevin Burke to USTR underscores just how hot a commodity. In his letter, Kevin noted that apparel and footwear together accounted for nearly half of all counterfeit goods seized at the American border.
"That is a troubling statistic, because intellectual property is the key to world-wide competitiveness and brand integrity. So this Administration is dedicated to fighting copycats and counterfeiters wherever they exist.
"To that end, the President's Trade Policy Agenda for 2010 highlights the Obama Administration's commitment supporting economic growth and job creation by using all the tools at our disposal to address the challenges of counterfeiting and other forms of intellectual property theft.
"That includes some tools that have worked effectively for decades, such as the Special 301 review, a process that will culminate in the release of the annual Special 301 report evaluating trading partners' intellectual property rights protections and enforcement. Today, the sustained attention of the United States through Special 301 is contributing to the forward progress of intellectual property efforts in countries like Mexico, the Philippines, and Thailand, progress that has been celebrated by your members.
"Our toolbox also includes enforcement measures, like World Trade Organization dispute settlement. This Administration has committed to utilizing the full range of enforcement options to guarantee American trading rights and opportunities. And our enforcement efforts are paying off.
"To come into compliance with World Trade Organization rules, the government of China eliminated literally dozens of programs giving export subsidies to, among others, Chinese textile and apparel brands. And China is also strengthening its rules on the disposal of seized counterfeit goods. These actions are a direct result of WTO enforcement efforts undertaken by USTR.
"At the same time, we are adding to our toolbox with new trade policy efforts and negotiations, most notably the Anti-Counterfeiting Trade Agreement.
"A lot of people are curious about those negotiations. They ask me: what are you up to and why is it such a big secret?
"Let me lay it out for you very straightforwardly. This effort is about leadership. Intellectual property needs to be protected against theft, and we are teaming up with trading partners who are willing to help lead the fight against thieves. We are working with them to go beyond the bare minimum standards of intellectual property enforcement that exist on an international level today.
"What does that mean? Let me give you just one example: under the WTO's existing minimum standards, if an official at the border sees at container of footwear or t-shirts or any other knockoff bearing counterfeit trademarks, he may not have any power to stop it. Because, right now, there is nothing in the WTO minimum standards that calls for nations to give him such power.
"The counterfeit shipment could be waived through by that powerless official, and be on its way to consumers. When that happens, your brand suffers. But so do consumers, who may unwittingly purchase substandard, potentially unsafe counterfeit goods.
"Our past trade agreements have raised the bar on border enforcement of trademarks with selected trading partners. We expect that the ACTA will raise that bar in a similar way with a broader group representing about half of global trade.
"Now, does raising the bar mean that we're going to require countries to search your music player at the airport or mandate radical new rules restricting the internet? No. If we don't already do it in the United States - if it's not part of our existing intellectual property law - we don't want it.
"What we do want is to work with trading partners who also have strong intellectual property laws, and some who are working towards stronger laws, to find common ground on the best way to support intellectual property rights. In this way, we can marginalize illicit trade in favor of legitimate commerce that channels the benefits of trade into the pockets of American workers and businesses like yours.
"This Administration's intellectual property enforcement efforts are making it easier for your companies and others to capitalize on your good ideas. But a lot happens between the creation of an idea and the sale of a finished product. And we're working to facilitate that process as well.
"We are making it easier for companies like yours to turn your ideas into marketable products by eliminating barriers to trade and opening new market opportunities - steps that make it possible for you to source the products and materials you need from around the world.
"Just yesterday, the President reiterated his commitment to supporting export-driven job growth. He signed an executive order formally establishing a National Export Cabinet, one element of the National Export Initiative, and called upon agencies across the federal government to do their part to help more Americans succeed in the global marketplace.
"You may ask: what does that Initiative have to do with my company? After all, most of you are more concerned with imports than exports. But here's the bottom line: trade policies that make it easier for Americans to export abroad make it easier for Americans to get the global inputs they need to do businesses here at home. We cannot achieve one without the other. We must pursue a comprehensive trade strategy.
"So, in keeping with the National Export Initiative, USTR is going to be doing more of what we do best - shaping trade policy to increase job-creating trade opportunities. And we are teaming up with other agencies involved in the Initiative to maximize the potential of those trade opportunities.
"For example, in keeping with the National Export Initiative and with our own Small- and Medium-Size Business Initiative, USTR is working with the Export-Import Bank to increase trade financing options available to the kinds of small- and medium-sized businesses that support full package sourcing. I'm talking about businesses like American textile manufacturers that supply the raw fabric for things like blue jeans and sweaters to foreign apparel manufacturers - manufacturers that your companies depend on for critical sourcing.
"And we are working closely with the American textile, apparel, and footwear industries on a proposal in the Doha Round of global trade negotiations that could reduce costs for suppliers, distributors, and consumers by reducing onerous and divergent labeling requirements.
"USTR is leveraging such collaborative efforts to support a broader trade agenda that seizes the biggest and best trading opportunities in the global marketplace.
"We are seeking to resolve outstanding issues on the Colombian, Korean, and Panamanian Free Trade Agreements in an effort to move those forward at the appropriate time. When those agreements go into effect, they will create billions of dollars in new market access for American exporters and new sourcing opportunities for American importers.
"We are beginning negotiations toward a new Trans-Pacific Partnership that will expand U.S. opportunities in the Pacific under a high-standard, 21st century agreement. Among other things, that Partnership could promote the development of efficient production and supply chains that include companies like yours. And in our Trans-Pacific Partnership negotiations, we will be working with countries like Vietnam, the second largest source of American apparel imports, to enhance transparency and improve regulatory coherence. Because such negotiations will enhance American competitiveness in the Pacific.
"We are also working in the Asia-Pacific Economic Cooperation forum to make it cheaper, easier, and faster to trade in that dynamic region, including by eliminating obstacles to the flow of goods through supply chains, and by improving the transparency and accessibility of APEC economies' customs information and regulations. In 2011, the United States will host APEC, which will give us a unique opportunity to further break-down long-standing trade and investment barriers that are slowing economic integration in the Asia-Pacific.
"Even as we work to secure these new opportunities, we are also working hard to ensure that American businesses and workers can make the most of our existing trade programs.
"In particular, trade preference programs like the GSP, ATPA, AGOA, and HOPE are critical for your sourcing. These preference programs expand the choices available to American industries and consumers while also promoting economic opportunities in developing countries.
"We know that it can be difficult to plan ahead when it is unclear when and how all these programs will be renewed. There are many different opinions on how these programs should be run - which products and countries should be covered, and how long their benefits should last. And we are working closely with Congress to address those issues as they move toward renewal and reform on many of those programs.
"At the same time, we are continuing to build upon the opportunities created through our trade preference programs. At the MAGIC textiles show in February, along with several of you, we announced the launch of a new program that will support additional investment in and sourcing from Haiti. The program, called Plus One for Haiti encourages participating companies to work toward sourcing at least one percent of their imports from Haitian apparel manufacturers.
"This week, I talked with Haiti's President Rene Preval, and the Plus One program was at the top of our agenda. We both recognize the power of this program to support Haitian efforts to rebuild. And I believe the Plus One program demonstrates perfectly the power of trade to support global development and facilitate American trade at the same time.
"Now, we've talked about how this Administration is enforcing your intellectual property rights. And we've talked about the work we're doing to facilitate global sourcing and eliminate trade barriers, work that is helping you turn your ideas into marketable products.
"But I also one to mention one other thing this Administration is doing to boost American competitiveness - we are working hard to rein in the runaway costs of health care. And when we pass health care reform and cut health care costs, American businesses will have more resources to spend on achieving global success.
"The ultimate objective of all our efforts can be summed up in one word: jobs.
"When companies like yours are able to succeed in the marketplace that supports job creation here at home.
"When a shipment of your products arrives in America, an army of workers goes into motion. There's the port worker who unloads your container, the truck driver that carries it to a distribution center or a store, the marketing executive that trumpets its arrival, and the retailer who rings up each individual sale. And that's just domestic sales - every foreign sale you make supports American designers, customs and logistics professionals, and financing and transportation experts.
"So your success, and the success of every globally-engaged American company, is critical to the overall economic recovery.
"USTR is working to encourage that success with a smart trade policy that creates opportunities wherever possible. And our work won't be finished until every American who wants a job can find one.
"We've got a long road ahead, but together we can renew American opportunity and rebuild American prosperity. I look forward to continuing that work together with you."