ACCLA Annual Meeting: Forecast for Latin America and the Caribbean - remarks by U.S. Chamber of Commerce President and CEO Thomas J. Donohue

On: Forecast for Latin America and the Caribbean
To: ACCLA Annual Meeting
From: Thomas J. Donohue
Date: May 5, 2004
 

It's a pleasure to be here with all of you.

The Chamber hosts more 3,000 meetings in this building each year, and the AACCLA Annual Meeting is one of the most important.

Why? Because it's a chance to discuss critical business issues with people who are part of our hemispheric family.

Family — that's exactly the right word.

Like family, we don't always get along, but the countries of the Americas are natural partners in trade and investment, and AACCLA is the part of the Chamber Federation that nurtures those relationships.

If there were no AACCLA, it would have to be invented from scratch.

I run into AACCLA people all over the place — I saw Humberto Pacheco
(ooom-BEAR-toe pah-CHAY-coe)
in New York a week or two ago.

[AACCLA President] Jim Fendell is a regular visitor to Washington — I think we are prepared to issue him a Chamber staff ID.

The United States Chamber of Commerce truly values its partnership with AACCLA, and I am certain it will only grow stronger in the years ahead.

This morning, I'd like to make just three main points, and then open the floor for discussion.

First, we must fully appreciate just how quickly the world is changing and take the proper steps to adapt to change.

Last Saturday, the European Union added ten new member countries. What does this mean for the transatlantic relationship? In one respect, an enlarged E.U. opens up tremendous new opportunities for U.S. and Latin American firms.

Looked at another way, a trading block with the size and influence of the new E.U. is quite a formidable competitor and could potentially dictate the terms of future trade agreements.

How do we handle a European Union whose ability to write the rules for international trade, set new industrial standards and add to its more than 30 free trade agreements is growing?

Meanwhile, on the other side of the world, China is emerging as a fierce economic competitor, sucking up commodities. That's good news for Brazilian steel producers and Argentine soybean farmers.

But on the export front, China presents a huge challenge to manufacturers throughout Latin America — and in the United States.

And what about the changes in attitudes toward trade occurring right here in this country?

In the United States, there is a backlash against the outsourcing of manufacturing and some service sector jobs overseas.

Lawmakers in Congress and in state legislatures are pushing legislation that would restrict the ability of U.S. firms to source and trade around the world. Their arguments appear based not on facts but on emotions and, in some cases, on politics.

The U.S. Chamber recently published a report that attempts to lay out in a logical fashion what we know and don't know about the extent of and the reasons for recent U.S. job losses, as well as the links between employment, trade, and worldwide sourcing.

Let me share with you some of our discoveries and conclusions.

First, increases in productivity, the recent economic downturn, domestic business impediments, and continued uncertainty are the primary reasons for recent job losses and the slow pace of hiring—not the movement of work offshore.

Let's look at the productivity factor by itself. Twenty-five years ago, it took General Motors 454,000 workers to build five million cars and trucks; today it takes 118,000 to make the same number.

The U.S. is not alone. Since 1995, we have shed 11% of our manufacturing workforce. China has lost 15% during the same period.

Second, even with job losses in manufacturing and some service occupations, more Americans are working today than at any time in history. More than a half million payroll jobs have been created so far this year.

The nation's employment machine is fundamentally strong, and trade is generating tremendous net benefits for the American people.

Third, even the experts don't know precisely how many U.S. jobs have been or will be sourced overseas. Yet under any estimate or forecast, these jobs amount to a small fraction of our nation's 138 million-person workforce.

Fourth, more white-collar office work is shipped from other countries to the United States than our country ships overseas. When it comes to trade in services, "insourcing" beats "outsourcing" by nearly $60 billion annually.

And finally, let's remember that though the debate today is about not enough good jobs for Americans, by 2010 we'll be having the opposite debate in this country – not enough workers to fill available jobs.

We must expand the pool of available workers through education, training, immigration, and flexible workplaces in order to generate sufficient economic growth and the necessary tax base to support the coming avalanche of retirees.

To create jobs, it is critical that America remains open to the worldwide economy—where 95% of our potential customers live. We have to be close to where our customers are. Isolationist measures designed to restrict trade and punish companies for sourcing must be defeated.

We should, instead, open markets and enforce trade agreements; improve the skills of our workforce and expand the labor pool; modernize our transportation, energy, and technology infrastructure; and reduce legal, regulatory, tax, and health care costs.

The Chamber of Commerce of the United States is leading the fight to preserve for our companies the freedom and flexibility to source and trade around the world — and events like this conference are an important part of this effort.

More than 80 bills have been introduced in some 30 states and Congress to punish companies that source overseas. But virtually all of them have been stopped thanks to a strong coalition led by the U.S. Chamber.

As for my second point, the Chamber is also continuing to build momentum for free trade agreements.

The Chamber and AACCLA led the charge last year to win approval of the free trade agreements with Chile and Singapore, and I'm proud of that effort.

Today, we are hard at work on CAFTA and the agreement with Australia.

In making the case for these FTAs, no one is burning up more shoe leather in the halls of Congress than the Chamber.

Just over a month ago, we hosted the President of Colombia, and we made a commitment to him to support an FTA with Colombia and its neighbors in the Andes — though we are also pressing hard to see some investment disputes fixed in the process.

And I assure you, the U.S. Chamber will continue to beat the drum for a Free Trade Area of the Americas agreement.

We are prepared to throw extraordinary resources behind the FTAA to push for the best possible agreement—for ALL countries.

I mean that — for ALL the countries in the Americas.

We are prepared to take on protectionists in this country as part of a strong agreement — if our friends in Brazil, Argentina, and elsewhere step up to the table and commit to an ambitious deal.

With your help, we are busy each and every day making the case for trade and economic reform to the American people—and to people throughout the hemisphere.

Finally, the Chamber will continue to lead the effort in this country to enhance security without impairing trade and immigration.

How do we protect our borders without cutting off the valuable flow of people and products that sustains our economies and our way of life?

We in this country can look upon this question as a problem, or we can see it as an opportunity—an opportunity to make our borders more secure and more efficient at the same time.

Many people talk about "striking a balance" between commerce and security, as if to imply that the only solution is to accept a little less prosperity and a little less security.

But the two are not mutually exclusive. We shouldn't be forced into making a choice. We should aim higher and find win-win solutions for trade and safety.

Through better technology and closer cooperation with our trading partners, we have the ability detect harmful cargo and people while allowing the rest to move quickly and efficiently.

The U.S. Chamber is on the front lines to ensure that increased security measures are truly effective and are achieved without choking off the trade and jobs upon which our people depend.

We've been through some hard times lately — war, recession, uncertainty.

But I'm optimistic about business in the Americas.

I see a United States that is assuming new leadership in trade.

Just last week, the Administration took a courageous stand to reject calls from the labor unions for new tariffs on Chinese goods.

That might not have been good election year politics — but President Bush and Bob Zoellick made a stand on principle.

And I see countries such as Mexico, El Salvador, and Chile benefiting from their embrace of economic reforms — there are great lessons there for the entire hemisphere.

By your being here today, I can't help but think that you share in my optimism. So let today be the start of a renewed effort to go where we've never been before.

Thank you very much.