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Remarks by U.S. Trade Representative Michael Froman at the National League of Cities

Remarks by U.S. Trade Representative Michael Froman
at the National League of Cities

*As Prepared for Delivery*

“Thank you for that warm welcome.

“Mayor Coleman, President Coleman, thank you for the introduction. 

“And thank you to the National League of Cities for inviting me to speak with you all this afternoon.

“As you all know, across this Administration, we’re focused on creating jobs, promoting growth and strengthening the middle class. 

“That is what the President calls our ‘north star.’ 

“At USTR, our contribution to this effort is to open markets for Made-In-America exports – manufactured goods, agricultural products and services; to level the playing field for American workers and firms, including by raising labor and environmental standards around the world; and to fully enforce our trade laws and trade rights by holding our trading partners accountable to meet the obligations they’ve made.

“As representatives of city governments – Mayors, City Council Members, and many others – you are on the front lines of job creation in the U.S.  You’re out there trying to attract investment to your cities. 

“You’re out there on trade missions to other countries, making sure they know about your cities products and why it’s so attractive to do business there.   That’s why I’m so glad to have this opportunity to speak with you today.

“Let’s start with some facts:

“First, the U.S. needs to grow our exports to grow good, well-paying jobs and to reduce our inequality across our country. 

“95% of the world’s consumers and 80% of the globe’s purchasing power lie outside the United States. 

“The U.S. is growing again, but we’re a mature, advanced economy. 

“We are not going to be able to create the kind and numbers of jobs we need to create if we don’t have access to the largest and fastest growing markets outside our country.

“Exports have been central to national recovery and to the creation of a rebalanced and healthier economy.

“Under President Obama, U.S. exports have increased by 50 percent, growing four times faster than the economy as a whole, adding $700 billion dollars to our economic output and contributing a third of our total economic growth. 

“300,000 American companies now export, 96 percent of which are small and medium size businesses.  

“Exports are now 13.5 percent of American GDP, the highest figure ever recorded. 

“The top 100 metropolitan areas around the country lie at the heart of this phenomenon, accounting for $1.36 trillion in goods exports in 2012 and the vast majority of our $700 billion in services exports such as logistics, finance, media and Internet services. 

“Metro areas are of course also America’s gateways to the world - creating hundreds of thousands of transport and supply-chain jobs, as ports bring in and ship out 1.2 billion tons of cargo each year.

“This surge of exports means jobs – jobs saved during the crisis, jobs added as we recover. 

“Each billion dollars of increased exports supports between 5,400 and 5,900 jobs, on average in 2013. 

“Over the last four years, exports have supported 1.6 million additional private sector jobs – totaling 11.3 million jobs in the United States – that pay 13-18 percent more on average than non-export related jobs.

“But behind these statistics, there are real, flesh-and-blood success stories for working families: the auto parts firm that would have closed its line and gone dark had it not been for overseas markets; the family farm now finding customers around the world via the internet; the medical device company that secured that new contract abroad.

“Take Flanders Electric, a medium size business in Evansville, Indiana. 

“Flanders manufactures and works on electric motors.  In 2007, they decided to expand their business to international customers. 

“Our trade agreement with Chile played a major role in their decision to start exporting there.

“Without tariffs and non-tariff barriers, they could compete on the merits of their hard work and the quality of their products.

“They also began trading with Australia, another of our trade agreement partners.  As their exports and business grew, so did Flanders.  It now employs 700 Americans.

“There are thousands more stories like it.

“Second, the pace of globalization and technological change is not slowing down.  This means both challenges we can’t escape, and opportunities we mustn’t miss. 

“Consider this: In the last five years, the capacity of the world’s container fleets has grown by 50 percent.

“The number of Internet users has doubled – from 1.5 to 3 billion people – and the amount of Internet traffic has tripled.

“The world’s urban population, the pool of workers entering the global economy, has grown by 380 million people. 

“That’s the background against which we are negotiating the Trans-Pacific Partnership, representing 12 countries and 40 percent of global GDP; the Transatlantic Trade and Investment Partnership, to deepen our already $1 trillion trading relationship with the European Union; the International Services Agreement, to open up countries representing 70% of the global services market to our world-class companies; the Environmental Goods Agreement, to eliminate tariffs among countries representing 90% of this $1 trillion market; and the Information Technology Agreement, to eliminate tariffs on good representing 90% of this important market.

“Through TPP, for example, we’re working to open markets for U.S. manufacturing exports, service exports, and agricultural exports to countries like Japan, Vietnam and Malaysia. 

“And we’re working to raise the standards of the international trading system:  strengthening intellectual property rights while ensuring the free flow of data and the development of the Internet economy; introducing new disciplines on state-owned enterprises, so when they compete with our private sector, they’re doing so on a fair and level playing field; improving regulatory practices so that regulations are based on science and not used as disguised barriers to trade.

“We know that our workers and firms are the most competitive in the world and that if they face a level playing field, they can compete and thrive. 

“This means that American steel workers in Alabama can fairly compete with steel workers in Malaysia, rice farmers outside Baton Rouge will not be at a disadvantage to their counterparts in Vietnam, American-made films will run in New Zealand cinemas, and American internet engineers will be able to connect the world and bring small and medium-sized businesses everywhere into the global economy.

“Right now, there are an estimated 500 million middle class consumers in Asia. 

“By 2030, there are expected to be 2.7 billion middle class consumers – about 6 times the size of what the U.S. market is expected to be at that time. 

“The question is who will serve that market?  Will they buy U.S. exports or the products of other countries?

“Because the fact is, other countries aren’t just standing still. 

“If we don’t open those markets, help raise the standards and define the rules of the game, other countries will and we will be left on the sidelines, excluded from the fastest growing markets in the world, dealt out of global supply chains, facing a race to the bottom that we cannot win and should not run.

“I could go on and on, about how we’re going to work to bridge the differences in regulation and standards between the U.S. and Europe, to bring together the two largest markets in the world to drive further job creation and competitiveness in both our economies and to help raise the bar for the global trading system.

“Or about how we’re going to help address climate change by reducing the cost of clean energy products. 

“But let me try to draw this to a close.

“When we have completed our various negotiations, we will have established free and fair trade with over two-thirds of the global economy. 

“American businesses will be able to sell their products more easily to 1.5 billion consumers globally. 

“At the end of the day, those increased exports will support hundreds of thousands of additional jobs in American cities and throughout the country – creating opportunity for our communities and for our families.

“Local elected officials have the best seat in the house from which to appreciate this. 

“Whether you’re on Main Street in Portland or Peachtree Street in Atlanta; a family farm in South Dakota or a factory floor in South Carolina, trade touches your community in a positive way. 

“You all know what I mean.  If you’ve traveled from Minneapolis, you know you export over $17 billion worth of goods and services, supporting over 100,000 jobs.

“Or if you’re here from Wichita, Kansas, you know that your exports of transportation equipment topped $3 billion in 2010. 

“And if you hail from Charlotte North Carolina, you know that your exports from your financial services industry creates over 30,000 direct jobs, and nearly $10 billion in export value. 

“You’ve watched the flows of goods outward from American ports, and the flows of services along fiber-optic cable and satellite beam, rise in the past five years.

“To bring home the benefits that these trade negotiations have to offer, Congress will need to pass Trade Promotion Authority.  TPA is the mechanism by which Congress has worked with every President since 1974 to give the Executive its marching orders as to what to negotiate, how it should work with Congress before and during the negotiations and how Congress should take up and approve or disapprove a trade agreement once negotiated.

“We need to tell the stories about what’s at stake for in your city, if we succeed – and if we fail.

“A CEO of a major European company pulled me aside at a conference not too long ago and said:

‘These trade agreements you’re negotiating could be THE game changer for the United States.

'The U.S. has a highly educated workforce. You have an entrepreneurial culture, a strong rule of law, and you now have abundant sources of affordable and cleaner energy. 

'When you add in these trade agreements, firms in the United States will have unfettered access to markets representing more than two-thirds of the global economy. 

'When you put all those things together, the U.S. has the potential to be the production platform of choice -- the place where every business wants to locate their manufacturing.  Where they want to hire people.’ 

“As he said to me, ‘If you get this right, they will want to make things here and then send them all over the world.’

“Your cities could be the places where those companies set-up shop.

“The American people and their representatives need to hear those stories about the businesses in your city which are looking to expand their exports, to find new markets, to add a shift, to hire additional workers, to invest in a new plant.

“That’s where you all come in.

“You all know that communities across the country are rooting for their hometown entrepreneurs to have the chance to succeed and grow, hire their neighbor who has been out of work for too long, pay their bills without worrying about the unexpected expense on the horizon. 

“American cities and our middle class are eager to again feel the wind at their back. 

“We want to see local economies thrive – fueled by increased exports – so that they can reach their full potential in the global marketplace.

“I look forward to working with you toward that goal.  Thank you for letting me speak with you today.

“Enjoy the rest of your time in Washington.”