Remarks By Ambassador Demetrios Marantis at the 25th Annual World Trade Day
Remarks by Ambassador Demetrios Marantis
Deputy United States Trade Representative
June 16, 2010
25th Annual World Trade Day
Smithfield, Rhode Island
*As Prepared for Delivery*
“It is a tremendous pleasure to be here today representing the Obama Administration at the Chafee Center for Bryant University’s 25th Annual Trade Day. I cannot think of a more fitting place to discuss President Obama’s trade agenda, because Rhode Island inspires confidence in America and in trade. This great state was our young nation’s vanguard engaging in global commerce. In the 1780s, tallships sailed from the Narragansett Bay for ports of Madagascar, Bombay, Java, Malaya, and Canton with cargos of steel, sail cloth, cotton, and tobacco. Rhode Island’s history evokes dreams of people seeing the world and returning with fantastic stories of faraway lands, and shiploads of tea, coffee, silks, spices, flannels, and muslins.
Equally inspiring is Rhode Island’s modern day global reach. The state’s economy is dominated by small businesses. Nearly half of these small businesses export to countries like Canada, the United Kingdom, Germany, and Australia, showing a global engagement few other states can boast. Rhode Island also inspires as home to large global companies with national reputations, which create well-paying jobs here at home.
But Rhode Island inspires for another reason. Rhode Island’s economy is hurting. We cannot deny that. Unemployment is over ten percent and underemployment is even higher. Too many companies have been forced to close their doors as housing and health care costs rise and economic opportunities slip away. In Rhode Island, we are inspired to do better, try harder, and devise policies that create new jobs and sustainable growth.
This is why all of you are at the Chafee Center. Not to despair, but to try harder, do better, and create a better economy for your children and grandchildren. We are in this together, to learn from each other, driven by a common cause to forge an agenda that works for Rhode Island and our entire nation and leads to a more prosperous future.
When President Obama took office last year, the skies were dark under the clouds of a global economic crisis. We have since worked to part the darkness with policies for a better tomorrow, including an historic economic stimulus package and unprecedented healthcare reform that will make our economy stronger and more prosperous. Financial sector reform is also underway. And every day, every member of President Obama’s Administration is focused on creating new and better jobs for Americans in Rhode Island and around the country.
International trade and exports are central to this agenda as a driver of sustainable economic growth and creator of good jobs in America in all industries. All of you know trade’s real and potential benefits. Ninety-five percent of the world’s consumers live outside our borders. U.S. manufacturing and services exports support over 10 million jobs. Rhode Island companies like Taco and Mearthane Products exported $1.5 billion in goods last year. Nationwide exports exceeded 13 percent of U.S. gross domestic output for the first time in 2009 and hit nearly 12 percent in the first quarter of 2010. Today, exports are at the heart of our economic recovery, accounting for more than 40 percent of our overall economic expansion over the past nine months.
But that is just half of the picture – just one side of our country’s trade imperative. Trade must be central to this Administration’s economic and job-creating agenda not just because of our domestic economic dynamic, but because of a new dynamic around the globe. The world has changed, and we must change with it.
Look back at the 25 years since Ray Fogarty held the first World Trade Day at Bryant University. Over those years, the Asia-Pacific’s share of the global economy has doubled to over 30 percent, while Europe’s and the United States’ share has fallen. China’s slice of world GDP has quadrupled to nearly 13 percent in just a quarter century. Much of this shifting composition of global growth is driven by growing economic engagement – increasing exports, imports, and investment. Today, China accounts for more than 10 percent of global goods exports, up from just over 1 percent in 1985.
What does this changed world mean? Three things: opportunity, competition, and challenge. First, as more countries grow and prosper, American exporters have the opportunity to win more customers around a world whose pocketbooks are growing thicker by the day. We have the opportunity to win new customers around the world who know ‘Made In America’ stands for quality. ‘Made in America’ stands for reliable, high tech manufactured goods, safe and delicious agriculture products, and cutting edge services.
We are already realizing these opportunities. In the past, we have drastically reduced tariffs to Rhode Island’s key export markets in Canada and Europe. Our current challenge is to best position U.S. exporters to take advantage of the competitive opportunities in the world’s most dynamic region – the Asia-Pacific. Even given the deteriorating global economy, in 2009 U.S. goods exports to the Asia-Pacific region exceeded $600 billion, agriculture exports topped $70 billion, and U.S. services exports to the region grew to nearly $200 billion. U.S. small and medium-sized enterprises alone exported nearly $200 billion to the Asia-Pacific in 2009. Realizing these export opportunities means jobs and growth when our economy needs them most.
Second, this same changing global dynamic means not only great opportunity, but increased competition. Countries around the world are exporting more and better goods and services that often compete directly with companies in Rhode Island and across the United States. Again, looking at the Asia-Pacific, we see that while our exports are growing, our share of the overall export market is falling in important economies like China, Japan, Korea, and Malaysia. And we face competition not just in exports and export market share, but also in the policies that support exports and open markets. Other countries are joining together in trade agreements that exclude the United States. Just this year, China and the 10 Southeast Asian ASEAN nations ushered in the world's third-largest free-trade area. Currently there are 137 preferential trade agreements in force that include Asia-Pacific countries, 13 await implementation, and 54 are under negotiation. The United States is part of only a fraction of those agreements.
Which brings me to my third point – our challenge. If the United States is to realize economic opportunities and take on new competitors, we need to improve our game. That is why President Obama announced in this year’s State of the Union address the National Export Initiative. The NEI sets out the ambitious goal of doubling our exports over five years to create an additional 2 million export-driven jobs. This challenge is unprecedented but attainable. We are taking a whole of government approach to reassess and improve our export policies. The entire Administration is engaged, planning trade missions, identifying key market opportunities, and finding ways to improve trade promotion and export financing programs. We are looking at individual agency programs, as well as assessing our policy effectiveness across all agencies to look for synergies, new opportunities, and ways we can do our jobs better.
The U.S. Trade Representative’s role in the National Export Initiative is to do what we do best – keep markets open by enforcing our trading rights around and the world, and opening new markets by negotiating new market access with our trading partners multilaterally, regionally, and bilaterally.
Recognizing the competition and opportunity we face in the Asia-Pacific, USTR is pursuing ambitious and groundbreaking work to get real results for Rhode Island workers, farmers, service providers and business leaders. Today, and all of this week, a top flight team of U.S. negotiators is in San Francisco negotiating the second round of a new regional trade agreement with Australia, Brunei, Chile, New Zealand, Peru, Singapore, and Vietnam called the Trans-Pacific Partnership, or TPP.
The Trans-Pacific Partnership recognizes that the United States must lay strong and enduring ties that anchor the American economy in the world’s most dynamic economic region. We believe TPP will set that anchor with innovative 21st century provisions that deal with new technologies, new challenges, and new priorities. For the first time, negotiators will focus on small businesses, working to shape the TPP into an agreement that benefits small manufacturers and service providers such as those that are the foundation of Rhode Island’s economy. We are taking a look at broad issues like competitiveness and supply chain management. Most importantly, we will prime this 21st century trade agreement to take on new members throughout the Asia-Pacific as they are ready and willing to match our ambition.
We are also taking a transparent and inclusive approach to these negotiations. We have forged an unprecedented partnership with Congress, and we even invited stakeholders from diverse organizations from the labor, manufacturing, agriculture, environmental, and service communities to our negotiating round so they can follow our progress. And most exciting for me has been our fifty state on the ground engagement to hear your priorities as we develop our negotiating positions. In just the past few months, I have met with farmers in Sacramento, port operators in Philadelphia, and manufacturers and service providers Kansas City. Later today I am meeting with businesses leaders in Hartford, and I look forward to hearing from all of you here today.
The Trans-Pacific Partnership is just one initiative. The Obama Administration is also gearing up to host the Asia Pacific Economic Cooperation (APEC) forum in 2011. It has been nearly two decades since we last hosted APEC – a grouping that includes 21 economies that today represent more than half of global economic output and almost half of world trade. We have an exciting opportunity to better integrate our economies by cutting red tape, dismantling trade barriers, and promoting trade in clean energy goods and services. Throughout 2011, we will also bring APEC to Americans by holding a series of ministerial and senior officials meetings around the country, including a meeting of ministers responsible for small- and medium-sized enterprises.
We are also moving forward on other trade initiatives with which you may be more familiar. In the WTO Doha Round, the United States continues to lead efforts to shake loose the economic promise of an agreement with real market access for all involved. Today, the key roadblock is the continued resistance of some important partners to engage in sustained, meaningful negotiations. The success or failure of the Doha Round depends on whether advanced developing countries like China, India, and Brazil will accept the responsibility that goes along with their growing roles in the global economy.
Three pending U.S. free trade agreements with Korea, Colombia, and Panama are also important opportunities to grow well-paying jobs here at home. That is why USTR is working to address outstanding concerns with these agreements and find ways to move them forward.
On the free trade agreement with Panama, we have engaged in extensive discussions with Panama on unresolved labor and tax transparency issues. Several labor reforms are already in force. With the United States’ encouragement, the Colombian government has already taken a number of steps to address violence against unionists, and to address concerns regarding its labor law regime. And our trade agreement with Korea promises the most economic and jobs potential. We are consulting with Congress and other U.S. stakeholders to determine how best to address outstanding concerns and to move forward.
While we work to create new opportunities through new agreements, enforcing the agreements we have is as important as new negotiating new initiatives. We are confident in asserting our rights to stand up for Americans, and we won’t hesitate to use every tool at our disposal to defend American businesses and workers hurt by unfair trade practices. We seek to resolve concerns through negotiation and agreement where we can. But we also are prepared to make use of the full range of enforcement options where necessary, including WTO dispute settlement. For example, in 2009, one of our WTO cases led China to eliminate more than 70 measures that give illegal export subsidies to a huge range of Chinese exports. We are now pursuing a WTO complaint against China’s export restraints on key raw materials, targeting industrial policies that harm our steel, aluminum and chemicals industries, and affecting workers and companies throughout the country.
Taken together, these trade policies can help level the global playing field for workers and businesses in Rhode Island and throughout the country. We cannot deny that the challenges are formidable and may sometimes seem insurmountable. But we can prevail if we work together. I look forward to working with all of you, because as historian William McLoughlin wrote: “Rhode Island’s genius has been to survive against the odds. Its self-made, strong-willed, resilient people have not minded going against the mainstream – or with it. Rugged individualists, they believed in experimentation…[and] they have been in all periods ingenious, imaginative, forthright.”
America needs this Rhode Island genius today. We will try to live up to it, and I hope that together we can succeed.”