Agenda for the Americas: A Plan for Hemispheric Growth and Jobs, Address by Thomas J. Donohue President & CEO, U.S. Chamber of Commerce

As Prepared for Delivery

Cartagena, Colombia

Good afternoon. It’s great to be back in Colombia.

AmCham Colombia has been a great partner to the U.S. Chamber and to the entire American business community—and we’re looking forward to spending the next few days here. Thank you, Camilo Reyes, for your strong leadership.

I want to thank you for the opportunity to share our agenda for the Americas. There’s no question the U.S.-Colombia relationship is central to that agenda. Later this evening I will meet with President Santos where we’ll discuss the important and growing partnership between our two nations.

We’ve seen Colombia make tremendous strides during his administration and under his predecessor. Our partnership is best exemplified by the hard-fought free trade agreement between our two countries, which will enter into force shortly.

The Chamber was proud to lead the charge in winning approval of this vital agreement. And we appreciate all that this organization and its members did to press it forward. We need to apply the same sense of urgency to seeing the agreement enter into force. I’ll come back to that in a moment.

Americas First

These days in Washington, we hear a great deal about the so-called “Pacific Pivot.” The idea is that a rising Asia needs to be at the forefront of U.S. foreign policy, national security, and international economic strategy.

Asia is certainly important. Colombians know it is—which is why this country is aggressively pursuing its own commercial relations with Asia.

But declaring that one world region is more important than any other risks weakening alliances in other regions. It risks making those in the favored region think we need them more than they need us. In fact, a country draws strength first and foremost from its allies, neighbors, and friends.

That’s what the Chamber’s Agenda for the Americas is all about—strengthening and deepening our strategic and economic ties to our hemispheric neighbors. We believe a more prosperous, secure, and united hemisphere rests on three pillars—trade, energy, and the free flow of people, capital, and ideas.

While these three topics will be the focus of my speech, I encourage you to ask any questions you’d like during the discussion period about what’s happening in the United States.

Double Down on Trade

First, we want to double down on trade across the Americas. There’s no better or faster way to create jobs, grow economies, or lift people out of poverty across the region. The ties that bind our economies together through trade and investment are already strong.

Last year, the United States exported nearly as much to our neighbors here in the Americas as we sold to Asia and Europe combined.

Good neighbors make for good business— but good policy has helped! The United States has a strong network of trade agreements in the Americas as do many other countries in the region.

These agreements have turbocharged the growth in hemispheric commerce over the past two decades. Today, 87% of our hemispheric exports are shipped to our trade agreement partners.

This is why the United States sells more goods to Canada than to the European Union, which has 15 times as many consumers. It’s why the growth of our exports to Mexico last year was greater than the growth in our exports to the BRIC countries—Brazil, Russia, India, and China—combined. It’s why U.S. exports to South America grew nearly twice as fast over the past decade as our exports to Asia.

But it isn’t just the United States driving this—not by any stretch. Our hemispheric neighbors have taken bold steps to increase exports and attract investment, and the results are fundamentally improving their economies and their citizens’ quality of life.

It’s time to build on this solid foundation.

First, we need to expedite the entry-into-force of these two recently approved FTAs. Every day that goes by means benefits foregone for our citizens.

Officials in the United States, Colombia, and Panama are working hard, but we cannot rest until we reach this goal. We are nearing the finish line.

Second, the United States and Brazil need to negotiate an Economic Partnership Agreement. Bilateral commerce between the United States and Brazil is growing impressively even without a trade agreement. Just think what more we could do with an agreement.

Brazil’s president, Dilma Rousseff, visited us at the U.S. Chamber earlier this week as part of her visit to Washington. Our discussions were very encouraging.

What would a U.S.-Brazil Economic Partnership Agreement look like? We’ve got a number of ideas, but the key point is to work together to lower the barriers to greater trade, investment, and commercial exchange.

Now is the time to start a serious conversation between the first and the sixth largest economies on earth—two markets with a combined population of more than 520 million people.

Third, while we have a strong network of bilateral trade agreements crisscrossing the hemisphere, we need to think bigger. We need a strategy that would essentially stitch these agreements together. Then we could fully leverage their benefits on a regional basis.

Companies could operate their supply chains more efficiently. Goods could move across borders more quickly. Participation in product design, production, packaging, marketing, and retailing could be spread more diversely across the region—according to each participant’s comparative strengths.

Our network of agreements has brought tremendous shared benefits, but imagine the benefits if they all worked in harmony with one another?

One way to integrate them would be through the Trans-Pacific Partnership. While the United States, Chile, and Peru are taking part in these talks, the TPP is mostly dancing to an Asian tune.

I think the TPP could use a little salsa, cumbia, or even samba.

Canada, Mexico, and Costa Rica have all expressed interest in joining. We should press current TPP participants to include the nations of the Americas in a more comprehensive way.

And while we are working to expand trade, we must remain ever vigilant against the siren song of protectionism, even among ourselves. Protectionism can come in many forms—from customs procedures to security rules to regulations.

That’s why we were pleased to see the United States launch the new Regulatory Cooperation Councils with Mexico and Canada. These councils should help us to tackle the “behind the border” barriers that often shut out beneficial commerce.

An “All-of-the-Above” Energy Policy

The second pillar of our agenda is pursue an “all of the above” energy policy that seizes on the re-emergence of the Americas as the world’s top energy hub.
It’s appropriate to have this conversation here in Colombia—at the mid-point of this colossal energy patch stretching from Alberta to the waters off Brazil.

In fact, Colombia’s oil exports to the United States grew faster last year than those of any major oil producer—a blistering 66% increase.

How do we best tap these incredible resources? Let’s start by working together.

Our challenge and opportunity is to match resources with capital. It is to ensure that energy technologies, talent, and expertise can be shared and move freely around the region in a secure and open environment where the rule of law is strong and where intellectual property is protected.

Once energy is developed it must then be moved to market safely and efficiently across a modern infrastructure.

It must be harnessed to improve standards of living in this hemisphere. All of this must be done while deploying the most sophisticated safeguards to ensure that we protect the environment and do everything humanly possible to limit accidents.
The bottom line is that having the resources in the ground is a good and fortunate place to start—it sure beats not having them at all! But it is only a start. There are many more steps in the process of developing a clean, diverse, reliable, and lucrative supply of fuel and power to use both domestically and regionally and export globally.

And that’s why working together to firmly establish the Americas as a 21st century energy hub is such an extraordinary opportunity for this hemisphere.

To achieve this vision, nations in the Americas must remain open to investment in each other’s energy sectors.

Mexico is a case in point. Energy production there has declined due to the lack of investment. We’re pleased that many Mexican leaders are now exploring creative approaches to bring foreign participation into its energy sector.

Once produced, we need to facilitate the smooth flow of energy across borders so that it gets to where it is needed in the most cost-efficient manner possible.

Unfortunately, the United States hasn’t always set a positive example in this area. The administration’s decision to delay the Keystone XL pipeline needlessly halted the creation of 20,000 jobs and has prompted our Canadian friends to look to the Far East for energy partners when we’d prefer that they look south.

Others are making better decisions. The Inter-American Development Bank has played a useful role in supporting the inter-connection of the Central American electric grid, which will become operational by 2013. Colombia, Ecuador, Peru, and Chile are also already studying ways to link their power grids.

How we regulate our energy markets is also important.

For the United States, we need to cut through the absurd red tape that makes building permits so hard to obtain and delays energy projects—including wind and solar projects.

Elsewhere in the hemisphere, we see cautionary tales of how strong state intervention in the form of unrealistic energy price controls can lead to underinvestment and energy shortages.

And we’ve seen too many forced localization policies, like “Buy American” or “Buy Brazilian” rules. These may have populist appeal, but they cost consumers dearly, discourage new investment, and cut into our global competitiveness.

And when I say we need an “all of the above” energy policy, it needs to be more than rhetoric.

For example, the United States needs to open our own outer continental shelf to energy exploration—not just the western Gulf and some areas off the coast of Alaska.

Coal also plays an important role in our energy matrix. We need a regulatory structure that respects that. Look at how Colombia’s high quality coal exports help electric utilities in the southeastern United States reduce emissions and meet EPA rules.

At the same time our domestic coal industry is itself finding new export markets around the world, while continuing to supply Americans with some 40% of their electricity.

Our plans shouldn’t just be about hydrocarbons. The Chamber lobbied Congress to let the U.S. ethanol subsidy and tariff expire at the end of last year, and I’m pleased we succeeded.

Brazil and Colombia have huge potential to develop ethanol resources, and we should build on these positive steps to create a global market for these renewable fuels.

Finally, we all need to focus on the cleanest, greenest form of energy—which is efficiency.

Free Movement of People

Our third pillar for hemispheric success is tearing down barriers to the movement of people, capital, and ideas. 

U.S. companies depend on the ability of foreign customers to travel to our country to visit manufacturing operations, inspect the products and services they are purchasing, and negotiate contracts. U.S. citizens want to travel abroad to do the same.

In addition, there are extraordinary opportunities to create jobs and support small businesses across this region by expanding tourism.

This is why I recently testified to the U.S. House of Representatives in support of the JOLT Act. This legislation could dramatically increase international travel by reforming U.S. visa processes.

It would greatly reduce the hassles, delays, and other deterrents that keep business people and tourists from visiting the United States.

The U.S. Visa Waiver Program currently offers visa-free travel to the citizens of 36 partnering countries, most of which are in Europe. The Chamber believes that a number of countries in this region would be strong candidates for participation.

The JOLT Act would also give travelers an option to expedite their visas for a fee, lower visa fees, and set a time limit on how long our government could take to process a visa application. The State Department has already added staff in countries with long waits for visas, such as Brazil.

However, travelers to the United States from these countries are expected to grow exponentially in the next few years, so we need to get ahead of the curve.

In addition to visas, the United States must also reform its broader immigration policies. You know this, and the business community in the United States knows this. All we have to do is convince the rest of our citizenry and all the politicians who are afraid to do the right thing—and that’s not easy!

The United States needs the skills, energy, and entrepreneurial spirit of immigrants to keep our economy competitive, to maintain our edge in innovation, and to fill gaps in our labor force.

There are common sense solutions. We need to develop a just pathway to lawful status for undocumented workers who are currently working in the United States.

We need a strong temporary worker program to recruit and maintain the workforce needed to remain globally competitive.

And we need to end the ridiculous policy of insisting that foreign students educated at our top universities leave once they get their diplomas. Some may wish to return home. Others may wish to stay. The best and the brightest should be greeted with options and not with a one-way ticket home.

While we should encourage the freer flow of tourists, talent, and labor in our region, we must also insist upon greater respect for the rule of law along our borders and within our borders.

We must all work on protecting intellectual property rights, ensuring that the playing field is level and honest for all investors, and that needed improvements are made in stamping out corruption and encouraging public integrity in all institutions of society.

Let me just mention one other potential barrier to economic development and investment in Latin America, or anywhere it is adopted—an unfair class action system.

As a concept, class actions aren’t really a problem. But, without safeguards to prevent abusive or even malicious prosecution, they can repel foreign investment and cripple job creation.

This is one American product we don’t want to export to Latin America, Europe, or anywhere in the world. It’s a job killer and sends a strong message to investors to take their business elsewhere.

We must remain vigilant to make sure that our efforts to open trade and encourage investment opportunities are not undermined by unreasonable class action mechanisms.

I’m not telling you anything you don’t already know. But it always bears repeating because the presence of these values—or lack of them—has an incalculable impact on where companies and investors will bring their capital, their ideas, their technologies, and their jobs.

Conclusion

Let me conclude where I began—by underscoring how much the Chamber and the American business community value our many partnerships with the businesses, the citizens, and the governments of this hemisphere.

Our nations sometimes compete and sometimes disagree, but we are bound together by common history, ancestry, and culture.

But just as important as all of this, we are bound together by an extraordinary opportunity to build a new prosperity across the Americas.

We can do it by doubling down on free trade ideas that have already proven their success.

We can do it by capitalizing on the rich natural resources with which we have been blessed.

And we can do it by investing in and empowering this region’s greatest resource of them all—our magnificent human talent.

We are profoundly democratic nations. We are nations of immigrants. We are nations founded in opposition to the regimented monarchies of the old world.

For the nations of the Americas, trade isn’t a “you win, I lose” game. In the 21st Century, we must work together to create jobs, defeat poverty, and secure peace among the nations of the New World.

This is our agenda for the Americas. Today I invite you to join us in making this vision a reality … a vision of a more prosperous, stable, and free hemisphere.

I can’t think of a better place to deliver these remarks than in Colombia, one of America’s greatest and most steadfast friends and one of our most important allies.

I’m honored to be here. I thank you all for your kind attention. And I look forward to your questions and our discussion.

Thank you very much.
 

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