Remarks by Ambassador Marantis Before the Georgetown University Law Center
WASHINGTON, D.C. - Today, Deputy United States Trade Representative Demetrios Marantis gave the keynote address at the Georgetown University International Law Center's International Trade Update. Ambassador Marantis spoke about U.S. trade policy, touching on President Obama's new National Export Initiative. Following are Ambassador Marantis's remarks as prepared for delivery:
"Sometimes in Washington, we get so caught up in the politics and minutia of trade policies, that we lose sight of the bigger picture. So I wanted to come here this morning to talk about the larger importance of international trade beyond Washington. I wanted us to remember the significance of trade policy for each of us, the United States, and the world. I needed an idea that would resonate.
"So I got practical and started writing about the 30 million tons of coal, metals, and grains that pass through the nearby Port of Baltimore each year. But then I changed my mind and got philosophical. I wrote a few lines about Adam Smith's ideas of the "natural propensity for humans to truck, barter and trade." But then I changed my mind again, and I got political, quoting Franklin Delano Roosevelt's declaration that "the welfare and prosperity of each of our Nations depends in large part on the benefits derived from commerce among ourselves and with other Nations, for our present civilization rests on the basis of an international exchange of commodities." And then? And then all that mental exercise made me hungry. So I sat down and made breakfast.
"As I spread pineapple jam on my toast, there it was - the significance and importance of international trade and trade policy. Think about what you had for breakfast this morning and where it came from. And you might just see what I did - trade policy in a jar of jam.
"That jar of jam was made in Manzini, Swaziland, at Eswatini Kitchen. Eswatini is an amazing company I visited this month that employs ninety women, most of them single mothers. But you don't have to travel to Africa to get their pineapple jam. They export their gourmet jams, jellies, and other processed foods duty-free to the United States under the African Growth and Opportunity Act - or AGOA. Under AGOA, the United States provides most products of Swaziland and 37 other sub-Saharan African nations duty free access to our market. As a result, U.S.-sub-Saharan trade - both imports from and exports of American goods and services to the continent - has more than doubled over eight years leading up to 2009. All across the continent, more Africans are building their lives and their communities by exporting more of the goods Americans want - not just jams but also jewelry, fruits, nuts, fruit juices, leather, plastic, cocoa, apparel, and much more.
"Simply reducing tariffs is not enough to ensure that companies like Eswatini succeed. To export to the United States, their products must meet the highest health and food safety standards, navigate global logistics, and pass through U.S. customs, all while remaining price-competitive. So the United States couples our trade preference programs with training, technical assistance, and other trade capacity building programs. In 2008, the United States provided more than one billion dollars in critical trade capacity building assistance to sub-Saharan African countries. Today, four regional African trade competitiveness hubs - funded by the U.S. Agency for International Development (USAID) in sub-Saharan Africa - provide assistance that allows Eswatini and other African exporters to find success in our $14 trillion market. These initiatives create good American jobs as well as jobs for Africans.
"So, a simple jar of jam tells a complex story of trade and development policy success. I could stop there. But the next chapter in the story of that jam is an important trade policy challenge. AGOA is set to expire in 2015, and this raises questions of whether the United States should renew the program and, if so, how it can be improved. Some development advocates think all developing countries should be covered by a single trade preference program - that we should scrap regional programs like AGOA. Others think we need tougher eligibility criteria for countries to qualify for trade preferences. And still others think that more advanced developing countries should no longer qualify for trade preferences. With the foundation preference program - the Generalized System of Preferences, which extends to the largest number of poor countries - expiring at the end of this year, the debate is on. The Obama Administration is working closely with Congress to rethink our preference programs for Africa and all developing countries.
"There are other, even bigger questions to address. Developing countries' long-term sustainability and development cannot rely on trade preferences alone. Developing countries must become more competitive by reforming domestic policies and strengthening ties with each other. Today, 70 percent of the duties that developing countries pay on their exports are paid to other developing countries. These countries must open their markets to each other, reduce barriers to their near neighbors, integrate regionally, and cooperate for mutual prosperity. The Obama Administration is committed to working with developing countries to help them reform domestically, integrate regionally, and sustain economic growth.
"Once I saw trade policy spread so deliciously on my toast, I began to see it everywhere. As you might too. Think about all of the technology that surrounds you at your offices. The MacBook Pro I used to write this speech is powered by Intel microprocessors, many of which are made in Malaysia - a country I also visited this month. Malaysia is an amazing trade success story. Its openness to international trade and investment has led to over three decades of economic growth, a spectacular decline in poverty rates, and shrinking inequality. Malaysia and the United States have developed a strong and mutually beneficial trade relationship, with trade in intermediate and final goods, agriculture produce and services flowing in both directions. The United States exports machinery, medical instruments, iron and steel, and aircraft as well as dairy products and soybeans - exports that support well-paying jobs right here at home. At the same time, Malaysia exports machinery, information and communications technology products, medical instruments, rubber and palm oil to us.
"Malaysia's trade policy success heralds a greater opportunity for America - that of the Asia-Pacific, a region that is a huge and dynamic market for U.S. exports. U.S. exports to APEC countries were $618 billion in 2009, up nearly 20 percent from five years earlier.
"But we cannot take such export growth to this region for granted. Until recently, the United States has risked getting locked out of the Asia-Pacific. There are now 175 preferential trade agreements in force that include Asia-Pacific countries, with an additional 20 agreements awaiting implementation. Another 50 agreements are under negotiation. The United States' share of exports to the region is falling.
"That is why this Administration has taken decisive action. President Obama has embraced the region's economic opportunity by announcing its intent to negotiate a new regional Asia-Pacific trade agreement known as the Trans-Pacific Partnership agreement, or TPP. The TPP begins with an initial group of eight partner countries - the United States, Australia, Brunei Darussalam, Chile, New Zealand, Peru, Singapore, and Vietnam. Our intent is to shape the TPP into a high-standard, broad-based regional trade agreement that could eventually include Malaysia and the rest of the Asia-Pacific. We mean to negotiate a 21st century trade agreement that creates and supports U.S. jobs, integrates U.S. companies in Asia-Pacific production and supply chains, and promotes new technologies and emerging economic sectors. This 21st century agreement can create more opportunities for small- and medium-sized companies, prioritize labor and environmental protections, and foster development.
"Simultaneous with TPP, this Administration is working with the 21 Asia-Pacific Economic Cooperation (APEC) forum member economies that account for over half of global output and over 40 percent of the world's trade. This year, we are working to make it cheaper, easier, and faster to do business in the Asia-Pacific. In 2011, the United States will host APEC, providing us an incredible opportunity to put forward a bolder vision for APEC and allowing us to accelerate our work to eliminate trade and investment barriers that impede greater economic integration in the region.
"With jam and computers on my mind, I drove to work - like many of you on your commute - and again realized that I was at the "wheel" of trade policy. American auto exports are one of the most important and pressing issues of trade policy today. Before I travelled to Swaziland and Malaysia, I held a number of high-level discussions with Japanese trade officials in Tokyo. Japan, like the United States, is implementing a "cash for clunkers" type program that provides incentives to Japanese consumers to purchase more environmentally friendly and energy efficient cars.
"While we welcome Japan's decision to allow greater opportunities for U.S. cars to qualify under its "cash for clunkers" program, we have serious concerns that Japan is implementing it in a way that limits the number of U.S. autos that can qualify. We will continue to urge the Japanese government to implement this program in as inclusive and transparent a manner as possible.
"Korea is another market where autos feature prominently. We have negotiated a free trade agreement with Korea that promises significant economic benefits for U.S. manufacturers, service suppliers, farmers, and ranchers. Yet Korea has a long history of applying non-tariff barriers to American auto makers that we must address before moving this agreement forward for approval. The Obama Administration is working to make sure U.S. car makers and auto workers get a fair shake in Korea. And on the basis of addressing these and other concerns we look forward to implementing a U.S.-Korea free trade agreement that will be our most economically significant in over a decade.
"To do so will also require additional progress on beef with Korea - an issue I think about every time I have a steak. Since 2001, Korea, Taiwan, China, Japan, and other key Asian markets have banned or significantly limited U.S. beef and beef product exports. While Korea in 2008 agreed to a beef import protocol in line with science and international standards, other Asian markets have yet to do so. Yet one of the internationally agreed principles that governs global agriculture trade is that science should guide food safety regulations and import rules. In this case, science time and again has shown U.S. beef and beef products to be safe.
"But the beef issue is just one important example. The pork, chicken, and rice that our country produces, and that American consumers like you and me eat every day face a proliferation of non-science-based barriers around the world. Some barriers try to protect domestic industries; others are misinformed; and still others are simple trade retaliation. Whatever their reason, these barriers must come down. America's farmers and ranchers are twice as reliant on overseas markets for their prosperity than American workers in the general economy.
"Now you understand that I can hardly have a meal or drive to work without seeing our trade policies at work. Maybe you are much like me, and cannot even relax without seeing a picture of trade policy. Going to a movie, we see America's creative industries and the intellectual property rights that protect them generate many jobs at home and around the world. But our creative industries increasingly face a gauntlet of policies that threaten their future.
"I recently returned from Indonesia, a country that has proposed a measure to severely restrict the import of foreign films to the benefit of their domestic film replication industry. Indonesia's proposal is blatant protectionism. And it is a policy the Obama Administration is fighting so our creative industries can thrive globally, and the world's consumers can watch the movies they want to see.
"In China, America's innovators and the intellectual property they work so hard to create are also under fire. Pirated movies and music, counterfeit brands and other fakes are still rampant in China. Legal avenues for distributing American movies are also severely restricted. All of this costs Americans jobs and money and erodes support for the global trading system. The Obama Administration is pressing China on these and other concerns in bilateral dialogues and in the World Trade Organization.
"Another deeply troubling trend in China is the proliferation of industrial policies that threaten American companies' current and future place in the Chinese market. For example, under the guise of "indigenous innovation" China is seeking to give preferential treatment to domestic companies at a significant cost to foreign companies. Fostering domestic industries and good jobs is an understandable goal for China. But China can and must do so in a way that does not discriminate against foreign companies. This Administration is working hard to address such policies so that our companies get fair treatment in China.
"We all see our trade policy in quiet realities of our daily lives - the jam we spread on our toast, the computers we use, the cars we drive, and the movies we see. But most importantly, I also see it the law students in the audience and at this university. The law students here are thinking about what awaits them not just at the end of their day, but at the end of their educational experience. They need jobs. They may have a spouse to support or a family to feed and clothe. With their diploma in hand, they may want to work for a big firm, help their family's business, or start their own practice. Whatever they choose, in a world more integrated and economically interdependent, their future paycheck has a good chance of depending on the international trade and economic policies this nation pursues.
"American jobs are the driver of the Obama Administration's policies - through trade policy, health care reform, and financial reform. Creating more well-paying jobs in America is the singular focus of President Obama, every member of his Cabinet, and every official in this Administration.
"American exports will be critical to the creation and support of new American jobs. President Obama has set a goal of doubling U.S. exports in the next five years - an increase that will support another 2 million jobs in America. Advancing new trade agreements and negotiating new market access will be central to reaching this goal as well as monitoring and enforcing the agreements we already have so that we obtain the market access benefits we have been promised. Also key is the new National Export Initiative the President announced in his State of the Union address. The President's National Export Initiative includes a newly created Export Promotion Cabinet, more funding for key export promotion programs, the mobilization of government officials to engage in export advocacy activities, the launch of export tools for small and medium sized businesses, the reduction in barriers to trade, and the opening of new markets.
"But here again, this important trade policy is part of a greater challenge. For no policy of global economic engagement can succeed without Americans engaged with the world. No program to create jobs will succeed if students do not learn everything you can to become as competitive and knowledgeable as you can be. No nation's policy that seeks to understand and navigate international economic challenges will succeed if its citizens do not seek to understand and embrace the world and the bigger picture as well.
"The reach of America's trade policy touches Swaziland, Malaysia, China, Indonesia, and Japan, and more than 100 other nations around the world. Our trade policy's significance touches many of the daily realities we take for granted. But trade policy's future successes begin and end with all of us - the students, the teachers, the policymakers, experts, and advocates. I look forward to working together."