Trading Up: The American Agenda for Growth and Jobs, Remarks

Global Business Leaders Series
Keynote Address by
MYRON BRILLIANT
Senior Vice President for International Affairs, U.S. Chamber of Commerce
Tuesday, September 29, 2009
New Orleans, Louisiana

As Prepared for Delivery

Introduction

Thank you very much, Charles (Dr. Teamer), and good afternoon ladies and gentlemen. I'm grateful for the opportunity to be with you today.

I commend the World Trade Center of New Orleans and the New Orleans Chamber for all their work in promoting trade, entrepreneurship, and a free market economy.

The Chamber, through its grassroots trade education program, TradeRoots, is a proud partner of the World Trade Center. This year we cemented this relationship by launching a statewide effort in conjunction with the Louisiana Association of Business and Industry to unite the pro-trade organizations, chambers, and elected officials from across the state in our effort to emphasize the positive impact trade has on Louisiana.

As you might know, Maura Donahue from DonahueFavret Contractors Holding Company recently served as Chair of the U.S. Chamber of Commerce, and she has remained very engaged with us throughout the state to continue promoting this message.

Constance Willems, Gene Schreiber and the rest of the team at the World Trade Center are the very best at what they do, and the Chamber looks forward to strengthening the relationship through our statewide outreach.

As a chamber executive, I certainly appreciate the work of local chambers and groups like the World Trade Center to help small businesses capitalize on overseas opportunities.

Safe Haven Enterprises is a good example of one of the millions of small- and mid-size U.S. firms that depend on foreign markets for revenue growth, profits, and job creation here at home.

Safe Haven Enterprises is headquartered in Lafayette and has manufacturing facilities in Jennings, but the reach of this Louisiana company is truly international. Safe Haven currently exports its products, including disaster-resistant buildings and secure doors and windows, to over 10 countries.

All told, exports account for nearly 95% of the company's sales. With customers in the corporate, residential, and government sectors, overseas markets are absolutely essential for their continued success.

The question for companies like Safe Haven is, "Will those opportunities continue to exist and multiply, or will the door close on us because of a backward looking trade policy in Washington?"

In difficult economic times like the present, a natural first instinct is to turn inward, to protect the remaining businesses and jobs. But that's an approach that simply won't work. In a new, more competitive global economy, we need to expand our engagement with the world—not shrink it.

Looking back some 30 years ago, the United States was still calling most of the shots in the global economy. Today, nearly half of the world economy is centered in the Asia-Pacific region. Fierce new competitors—and markets of great opportunity, from China to India to Brazil—are rapidly emerging.

These developments are not only reshaping global economics, they are altering geopolitics. Emerging nations are projecting their commercial influence into other spheres—securing capital and the best human talent, making deals for oil and natural resources, and flexing their economic muscle to advance their strategic interests.

How is the United States responding to the new global race for jobs, markets, influence, and leadership?

In my view, we are not stepping up on the worldwide stage as boldly, as vigorously, or as smartly as we must.

And that's what I'd like to talk about today.

Our nation faces a fundamental choice. In a new global economy, and in the midst of a major economic downturn, do we hunker down and turn inward—or do we act boldly to ensure that America is as pre-eminent in the 21st century as we were in the 20th century?

Louisiana's Economic Potential

I strongly believe that our nation can successfully engage, compete in, and lead this new global economy. Why? Because I see trade working for American workers and businesses all across the country, including here in Louisiana.

For a number of years, Louisiana has been among the nation's leading exporters, led by a strong port economy. More than a quarter of all agricultural revenue in the state comes from exports.

Remember all the doom and gloom talk in the early 1990s about how NAFTA would hurt the United States, including workers and businesses in this state?

Well, turns out the naysayers didn't get it quite right. Louisiana exports to Canada and Mexico have increased 271% since that agreement went into effect. I should also mention that Louisiana exports to Chile have jumped 219% since a trade agreement with that nation went into effect just five years ago.

Louisiana companies and farmers aren't running from the competition, they are meeting it head on! And in many instances, they are winning.

As a nation, however, we have a long way to go to recapture our winning ways. Over the next 10 years, we must create 20 million new jobs just to put the unemployed back to work and keep up with a growing population.

20 million jobs in 10 years. Who is going to create and sustain these jobs? The government? The unions? The politicians in Congress and in the statehouse? Can we tax, regulate, or sue our way to those jobs?

No. Only a strong private sector powered by free enterprise and unconstrained by borders can do it.

Anyone who doubts that trade creates jobs should consider that 57 million American workers are already employed by firms that benefit from exports.

One in five factory jobs depends on exports, and one in three acres on American farms is planted for consumers overseas. U.S. services companies—the most competitive in the world—export $550 billion in services annually, with a $140 billion surplus.

One common lament we hear from many concerned citizens is that "we don't make anything in this country anymore" and that when it comes to the global marketplace, we are just a buyer and not a seller.

Don't make anything? Don't sell anything? Last year, the United States was once again the world's largest exporter, with nearly $2 trillion in exports. The nation's manufacturing output has risen more than 50% over the past 15 years.

The benefits of global engagement go far beyond these sales and output.

Foreign based companies in the United States have directly created more than 5 million American jobs and indirectly support tens of millions more. U.S. investment in other countries is also important because it allows our firms to tap into global markets that they may not be able to access from here.

This free flow of investment in both directions underscores the importance of capital.
If you don't have the cash, you can't make the dash. Our nation must attract and remain open to global capital, with capital markets that are vibrant and competitive.

The New Isolationism and its Costs

Despite these benefits and realities, there are those who want to turn inward and erect new barriers to our markets.

Some do so out of fear, some out of ignorance, and some out of pure political and economic self-interest. These voices reside in both political parties, in labor unions and yes, in the business community.

This new isolationism threatens to eat away at America's tradition of openness, freedom, and leadership in the world.

"Buy American" may be the best illustration of how a protectionist policy can sound good—but in fact hurt the very workers and industries they are supposed to protect.

Of course we'd like to see America's consumers buy American products. But guess what? Ninety-five percent of the world's consumers don't live here. They live somewhere else.

We want them to "Buy American," too. And the way to do that is through an open trading system where consumers—not the government—decide what they are going to buy.

In February, the Chamber helped get these rules—which had been inserted into the economic stimulus package—modified so that they did not violate our international trade agreements.

But the federal government is forcing states and localities to apply these "Buy American" mandates in unprecedented ways. And that's delaying stimulus projects, eliminating jobs, and raising the specter of retaliation.

Last week the Chamber released a study that shows that another half-million Americans could soon lose their jobs because of the Buy American rules and the continued delay on pending trade agreements. Future job losses will be even greater if we don't change course.

Our government's decision to terminate the pilot project that allows trucks to operate across the U.S.-Mexico border is another illustration of the new isolationism in America.

Under NAFTA, the U.S. promised to open its border to Mexican trucks—with full reciprocity for U.S. carriers—and we aren't keeping our word.

How can we call on other countries to meet their obligations under trade agreements if we refuse to keep our own?

And when are we going to recognize that we are shooting ourselves in the foot with this kind of policy?

Leveling the Playing Field and Doubling Our Exports

There's no question that isolationism is not America's problem alone.

Despite the concerns I have discussed, our market is still the most open in the world—while the barriers to our products and services remain unacceptably high. We therefore need an aggressive strategy to open markets and compete in the new global economy.

Our goal should be nothing less than to double our exports around the world within five years. Here's what that strategy must include:

First, reduce barriers and improve access for American goods and services in new and promising markets.

That means passing the trade agreements with Colombia, Korea, and Panama. It means successfully concluding the Doha Round, which could boost the worldwide economy by $700 billion. These agreements are the best way to level the playing field—to make trade fair for Americans.

We should go beyond the deals that are already in the pipeline. Congress must give President Obama the authority he needs to negotiate new agreements to open foreign markets.

Second, we need to get tough about enforcing existing agreements. That's what a rules-based trading system is all about.

The WTO system and its enforcement mechanisms provide important safeguards for all signatories. But in using these tools and other remedial approaches, we must make sure that economically, we don't cut off our nose to spite our face.

Recently, the Obama administration announced it would slap 35 percent tariffs on lower-end Chinese tires. The Chinese, in fact, agreed to the trade tool that was used to impose this tariff when it negotiated with the United States to join the WTO.

Given the structural changes underway in the global tire market, the administration's action is not likely to save or create a single American job. Instead it will raise prices for American consumers.

No one has worked harder than the U.S. Chamber to educate, persuade, and pressure the Chinese and others to open their own markets and level their playing field. We've made some progress. We have a long way to go. We believe that markets can be pried open without punishing our own consumers, businesses, and workers in the process.

As for the third part of our strategy to expand trade: We must bring tens of thousands of new companies into the exporting business.

More than a quarter-million small and medium-sized companies already export—and they account for nearly one-third of all U.S. sales abroad.

With advances in global logistics, internet communications, and service providers such as Fed Ex and UPS, smaller companies now have tremendous opportunities to sell to foreign markets.

Government has a role to play in helping these companies get the tools, training, financing, and partners that they need to sell overseas—and we support robust federal trade promotion programs.

Fourth, we need more focused and coordinated leadership from government agencies that have been tasked with promoting exports and representing America's commercial interests in foreign markets.

This support is particularly critical in emerging markets.

Recovery and growth in Canada, Mexico, and Europe are essential to our goal of expanding exports. Yet increasingly, American jobs will be tied to markets such as Brazil, Russia, India, China, and the booming economies of APEC, which the United States will host in 2011.

Fifth, we must also ensure that all Americans have an opportunity to benefit from the global economy and achieve the American dream.

No one disputes the fact that some workers and communities have been hurt by global economic change. The Chamber worked hard to see Congress approve legislation early this year to expand Trade Adjustment Assistance.

But there is much more to do - most importantly, better prepare our students for the high tech, global economy.

It's a national disgrace that one third of U.S. students don't graduate from high school and that our job training strategies are so ineffective—this, at a time when education and training count for everything.

Smart public and private sector investment in effective job training is essential. So is fundamental school reform.

American business is seriously committed to working with this president, this Congress, the nation's governors, and our country's public and private educational institutions on these urgent challenges.

Finally, we need stronger trade leadership from our new administration.

The Obama administration will be stuck playing defense against market-closing proposals until it devises a forward-looking trade agenda of its own.

Several months ago, we were told President Obama would shortly make a major speech and outline his vision for "a new framework for trade."

We're still waiting.

The President has said many of the right things about trade. He has appointed a good man as U.S. Trade Representative, Ron Kirk. But while he has taken on other controversial issues with enthusiasm, his administration seems to be hesitant and uncertain when it comes to trade. And we have to ask why.

Of course, it's no secret that the administration is facing enormous pressure from labor union leaders and other anti-trade activists.

They must not be allowed to dictate our nation's role in the new global economy.

It's hard to make sense of their opposition to trade. Consider this: The SEIU's two million members are divided about evenly between health care and public sector workers. Precisely none of these jobs could possibly be endangered by trade.

On the other hand, the Longshoremen's jobs are almost totally dependent on trade.

Both unions have opposed every trade deal you can think of! It doesn't make any sense in either case.

President Bill Clinton showed it is possible to be a politically successful Democratic president and be pro-trade. It took courage, and it paid off for the country, the American people, and the economy.

Conclusion

Ladies and gentlemen, a welcoming approach to global trade, capital, and talent are fundamental to a successful free enterprise system.

Next month, the U.S. Chamber will launch an historic initiative in support of that system—a positive Free Enterprise Campaign to inform, remind, and educate Americans about the importance of economic freedom to jobs, our economy, and our way of life.

Expanding our exports and advocating open markets at home and abroad will be a critical plank of this campaign.

We will drive home the fact that American free enterprise has done more than any system ever devised to create jobs, opportunities, and hope.

Free enterprise built the strongest economy and the greatest country the world has ever known. It can lead us to an even brighter future.

It is worth keeping. It is worth fighting for. And I invite all of you to be our partners in this vital effort.

Thank you very much.