U.S. Secretary of Commerce Penny Pritzker delivered the keynote address on Monday at the American Association of Exporters and Importers (AAEI) Annual Conference. AAEI represents U.S. companies engaged in global trade and works to advocate on behalf of its members before Congress, executive agencies, and multi-lateral organizations, including the World Trade Organization (WTO).
Secretary Pritzker underscored the importance of expanding opportunities for U.S. exporters and importers in order to support economic growth. The Secretary highlighted the Trans-Pacific Partnership (TPP) as a significant opportunity to continue the progress the United States has made in growing the national economy through trade. During her remarks, Secretary Pritzker pointed out that if TPP implementation is delayed just one-year, the United States will see an estimated one-time national loss of $94 billion.
Remarks as Prepared for Delivery Thank you, Marianne, for that generous introduction. I also want to acknowledge the American Association of Exporters and Importers’ outstanding commitment to ensuring that the world’s markets remain open for U.S. businesses.
Like so many of you, I am a numbers person. I love data and the story it tells. As this Administration comes to a close, I find myself looking more and more at the data comparing our economy today with our economy at the beginning of President Obama’s term. And I am blown away by the numbers related to international trade.
Let me paint the picture for you. Today, 11.5 million people woke up in America and went to jobs supported by exports. That is 1.9 million more than in 2009. Last year, we exported $370 billion more than we did in 2010. And more than one-quarter of our economic growth over the last five years was due to increased exports.
Let me repeat that: exports are responsible for more than one-quarter of our economic growth since the economic downturn. These numbers tell me two things: Trade played an outsized role in saving our economy and increasing opportunities for America’s exporters and importers is critical to our continued growth.
Thanks in part to companies like yours and your clients, our economy is on the right track. Yet even though we are growing, not enough people and households are seeing the impact in their own lives. Real wages are rising, but not enough workers are enjoying greater disposable income. Private sector profits are up, but not enough companies have reliable access to markets at home and abroad.
To confront these challenges and build upon the significant progress that has been made over the last seven years, this Administration is constantly looking for new opportunities. Opportunities that strengthen middle class families and support those trying to reach the middle class, opportunities that promote innovation and new business, and opportunities that are economically sustainable.
Today, I want to talk about two Administration priorities that will help us achieve our goals: Export Control Reform and the Trans-Pacific Partnership. As you know, early in this Administration, the President and the Secretaries of Commerce, Defense, and State recognized the urgent need for comprehensive reform of our export control system.
Our goal continues to be enhancing our national security as well as making it easier for your firms to sell your products abroad to our allies by streamlining the licensing process, by rationalizing our system, and by reducing the amount of paperwork and applications you have to file with federal agencies.
Teams across the government have worked with unprecedented private sector collaboration to implement smart reforms – with the Commerce Department’s Bureau of Industry and Security playing a major role. So far, we have revised 15 out of 21 U.S. Munitions List Categories. If an item does not perform a critical military function, its control is moved from the State Department’s munitions list to the more flexible Commerce Control List. To date, U.S. exporters have shipped $10 billion of items that are newly transitioned to the Commerce Department system. And we anticipate that this number will continue to grow as we finalize revisions later this year for additional categories. My points are simple. Export Control Reform is real. Export Control Reform is an ongoing effort.
BIS is committed to partnering with you to build a more efficient, more dynamic system that adjusts to emerging threats and to new commercial applications of sensitive technologies. We are committed to listening to the voice of industry on how our new rules are working out and how they are impacting your businesses. But to be successful, we need your continued engagement. I want to personally thank you for your support of our efforts to date. But I also want to ask you to remain engaged. All of you, as AAEI members, have proven to be critical partners throughout this process. And your continued collaboration is essential to our success.
Just as your voice has been invaluable to the Export Control Reform process, we also need your help with our trade agenda. Everyone here knows that 96 percent of the world’s consumers live outside our borders, and 80 percent of the world’s purchasing power is outside the United States. But too often, your companies lack equal access to foreign markets and confront significant barriers to entry. In order for our companies and our workers to succeed in an increasingly-competitive economy, you must have fair access to some of the fastest-growing markets on the planet. We need modern, high-standard trade agreements like the Trans-Pacific Partnership, or TPP, to achieve that access.
Consider the impact on a company like UPS – an AAEI member whose business, like many of yours, depends on U.S. products getting to their foreign destinations as quickly and efficiently as possible. On day one, TPP will eliminate more than 18,000 tariffs on exported goods, strengthen existing supply chains, and build new ones across the Asia-Pacific, a region that comprises nearly 40 percent of global GDP. This will create more export opportunities for your customers – especially small and medium sized enterprises – and more business for AAEI members. TPP also eliminates red tape, reducing costly delays that inhibit your ability to move goods across borders. It streamlines documentation requirements for express delivery shipments. And it requires that customs rules be published online and in English, whenever possible.
Knowing how goods will be treated when arriving at a port of entry is critical for exporters and shippers. That is why David Abney, CEO of UPS, has said – and I quote – “there has never been more need to get trade agreements, starting with TPP, over the finish line.” TPP will level the playing field and help your companies and your customers better compete around the world. But first, we need the agreement signed into law. Though this clear and straightforward economic opportunity is within reach, we are not there yet. The time for all of us to act is now. We need your help because the costs of delay are too high.
A report by the Peterson Institute shows that if TPP is delayed by just one year, the United States will see an estimated one-time national loss of $94 billion. And don’t forget that our competition is not standing still. Since 2000, there have been nearly 100 new trade agreements in the Asia-Pacific region. In addition, momentum continues to build for the Chinese-led Regional Comprehensive Economic Partnership (RCEP). This agreement will only further entrench China’s interests in the region and put American exporters at a disadvantage. For the United States, TPP is an opportunity to secure our influence in the Asia-Pacific and ensure American businesses can compete. Simply put: TPP will allow us to shape the rules of the global economy to advance our economic strengths and our values.
President Obama and this Administration are hard at work making the case to the American people and Congress. At the same time, we are not ignoring the heated rhetoric around trade. The anxiety over opening America’s shores to more global trade comes from a simple fact: while our economy continues to grow and add jobs, the gains have not been felt evenly. Many are quick to blame trade. But underlying much of the disruption we are experiencing in our economy are two forces that will continue to charge ahead whether or not we enact new trade agreements: globalization and automation.
As the President said last week, “we can’t put technology back in a box any more than we can cut ourselves off from the global supply chain.” Yes, globalization is creating new competition for our companies and our people. Yes, automation is shifting the very nature of work for our people. But these changes are not a product of trade agreements. Rather, trade agreements are how we shape these forces. The fact is our companies need a level playing field to keep up with the pace of change and innovation. Trade agreements strengthen our competitive advantage in a world where the competition is growing as never before.
Here is another fact: the government is not the best spokesperson for why we need TPP. The best argument in favor of trade comes from all of you, business leaders and job creators who understand the real value of trade and exports. You understand that trade creates good-paying jobs for our people. Indeed, export-intensive jobs pay about 16 percent more than other jobs. You understand that trade agreements keep companies in the game by providing access to the global market. You understand that trade is a necessity in today’s increasingly globalized economy.
If we are going to see TPP become law, we need you as our partners, making the case for trade in your communities, in your states, and nationwide. I urge you today to make your voices heard. Reach out to your employees, your friends, your family, your neighbors. Tell them about how TPP will create more jobs for your workers, more customers for your companies and your clients, and more growth for our economy.
Businesses like yours – America’s exporters and importers – played a vital role in moving our economy from recession to recovery to expansion. Through close collaboration between government and industry, we have already made tremendous progress on Export Control Reform. That close collaboration must continue if we are to see the Trans-Pacific Partnership signed into law and ensure that your companies can continue to grow and thrive. Working together, I am confident we can ensure our country and our businesses, your businesses, remain on the leading edge of competiveness. Together, we can keep America open for business – and the world open to American businesses. Thank you.
Source: U.S. Department of Commerce
