Secretary's Speech

Secretary of Commerce Carlos M. Gutierrez
Council of the Americas, U.S. State Department
Washington, D.C.

I’m here to discuss securing the promise of the Western Hemisphere. This is a topic dear to our hearts and of extreme importance to President Bush and his Administration. We spend a lot of time, a lot of focus, on Latin America.

It’s a region of the world where we’ve seen significant progress politically and economically. However, there is still a lot to do. We believe the region is at a crossroads. This is a wonderful time to seize opportunities – or it could be a time of stagnation.

Many of you will remember the hyperinflation and cross-border violence and civil unrest that marked recent decades. Much of that is in the past.

• Today, 34 of the 35 independent countries of the Americas have democratic constitutions.
• 14 leadership elections were held between November 2005 and December 2006.
• Mexico demonstrated a commitment to democracy with the peaceful election of an opposition party president in 2000, and again in 2006.
• In the 1980s Nicaragua had 13,500 percent hyperinflation. Today it is estimated to be 9.4 percent.
• Peru has a stable exchange rate, low inflation and has experienced four percent annual growth for the past five years. The political violence of the 1980s and authoritarian measures of the 1990s are a thing of the past.

President Bush has taken tremendous interest in this area from day one. This administration has been fully engaged in the Western Hemisphere.

• Six of the 11 countries with which we have implemented FTAs have been with Latin American countries.
• President Bush has taken seven trips to the region, visiting 10 Latin American countries.
• We have formed the Security and Prosperity Partnership of North America with Canada and Mexico.
• Last March, President Bush announced an agreement with Brazil to advance cooperation on bio-fuels.

We believe that successful countries start with growth and prosperity as primary goals. Not everyone agrees.

Some see the nationalizing of economic sectors as the way of the future. But, they are really just returning to the failed policies of the 20^th Century. They don’t see the negative effect this will have on investment, a key driver of economic growth and job creation.

If you go around the region, not every country is after growth. But what we’ve seen time and time again is that without growth everything is a problem

When you have broad-based growth, it seems like everything is possible. You could invest in social programs, education, health care, the environment. Without growth, Latin America becomes a very, very dangerous place. There is no substitute for results. There is no substitute for growth.

Like business—I spent 30 years in the private sector and we measured our success in bar charts—governments also can be measured by results. Real results are happening in Latin America in places where the goal is to lift people out of poverty, not to have an equal distribution of poverty.

We think trade and Investment are solid foundations for growth. Our trade agreements with the region—starting with NAFTA, then Chile and most recently with CAFTA—have delivered results.

NAFTA has had a tremendous impact on regional trade. From 1993 to 2006, trade among the NAFTA nations climbed 198 percent, from $297 billion to $884 billion.

Today, NAFTA is our largest trading partner, surpassing even the EU.

• In 2006, our exports to Chile were up 30 percent
• Chilean exports to the U.S. were up 43 percent.
• Our exports to the six CAFTA countries were $19.6 billion.
• And exports from the CAFTA countries to the U.S. totaled 18.6 billion.

And, in 2005, U.S. companies invested over $350 billion in Latin America and the Caribbean. The estimate is that U.S. affiliates employ about 1.5 million people throughout the region.

We believe that we—“we” as in U.S. companies and U.S. government—are contributing to elevating the quality of life for people across the hemisphere.

Importantly, trade does more than bring economic growth. It also serves to strengthen young democracies. It helps create well functioning legal systems, transparent regulations, respect for property rights, and accountable governance.

We now have pending FTAs with Colombia, Panama and Peru. Once enacted, these agreements would expand U.S. access to 77 million consumers.

The growth potential with these countries is outstanding. In the 12 months ending in February 2007, two-way trade totaled $28 billion. Imagine the growth when we have trade agreements.

At some point, we will be able to stitch together these agreements—NAFTA, CAFTA, Chile, Colombia, Panama and Peru—and we’ll have a free trading area with about two-thirds of the hemisphere’s economy. This would be a tremendous platform for growth and prosperity in the region.

The Administration’s position on trade agreements is clear.

Expanding trade helps reduce poverty in Latin America, and it provides jobs and opportunity to our citizens by growing exports. Last year, was a record-setting year.

Our exports ($1.4 trillion) grew 12.7 percent while imports only increased by 10.5 percent. And, it’s not a coincidence that unemployment in the U.S. is at a low 4.4 percent, and we’ve had five years of uninterrupted growth.

These agreements clearly make economic sense for us. They also make political sense.

Colombia, Panama and Peru are close political allies. Rejecting any one of these agreements would carry not only economic consequences, but foreign policy consequences as well. It could create opportunity for those in the hemisphere who don’t share our democratic values and commitment to economic opportunity.

As you know, some in the region have hijacked the term “social justice” to apply to socialist policies. Under the guise of their so-called “social justice” they implement bad policy, make empty promises and create resentment.

When their policies fail to lead to growth and prosperity—as they have in the past and will in the future—they try to make villains out of those who support true democratic change.

We believe true social justice – and this is the message that we are taking out to the hemisphere – true social justice is about giving everyone an equal opportunity to succeed. This was the driving message behind a number of initiatives discussed by the President during his recent visit:

• Since 2004, the United States has provided more than $150 Million for education programs in Latin America and the Caribbean.
• Last year, The State Department launched a Hemisphere-Wide English Teaching Initiative.
• The Treasury and State Departments are partnering on a micro-lending program to support entrepreneurs and create new jobs.
• Through OPIC we are launching an effort to help build a market for affordable housing.

Clearly, our relationship with our neighbors is bigger than just free trade.

The irony is that for opponents of our system the role model is still Cuba. Let me share some thoughts on Cuba.

The question I get quite often is when is the U.S. going to change its policy on Cuba. But the real question is when will the regime change its policies? The plight of Cubans has very little to do with U.S. policy and everything to do with the policy of the Castro regime.

Let me just give you an idea of what life is like for the Cuban people, and then ask yourself why the focus is on policies in Washington and not in Havana. Cubans cannot:

• Travel abroad.
• Change jobs.
• Visit tourist hotels or resorts.
• Access the Internet.
• Watch independent television stations.
• Read unauthorized books, magazines or newspapers.
• Seek employment with foreign companies on the island.
• Choose a physician or hospital.

None of these restrictions on the Cuban people have anything to do with the U.S. embargo. These are restrictions placed on them by the Castro regime.

Last year, we issued a “Compact with the People of Cuba.”

We stand ready to help. President Bush made it very clear that we have no imperialist intentions. We have no military plans to occupy the island. We will not confiscate property or support any arbitrary attempts to reclaim property. Of course, that’s just the opposite of what we hear coming out of Cuba.

We believe it’s just a matter of time before the regime crumbles. Cuba provides us with a very vivid example of what revolutionary rhetoric delivers…of where the other model takes you.

I want to mention one other issue. I know we typically don’t include immigration in discussions about the hemisphere. However, it should be talked about when we think of the future prosperity of the region.

Many advanced economies around the world face demographic challenges, including Western Europe and Japan. In fact, Russia’s population is actually declining.

In the U.S., the number of people in the prime working years, ages 25-54, is expected to increase by a mere 0.3 percent per year over the next seven years.

The reality is that every country around the world is going to have to embrace immigration in order to prosper. And those who can welcome immigrants and assimilate immigrants will have an advantage.

Here in America we are in the middle of an epic debate over immigration. This is not the first time we’ve had this debate; the good news is that wisdom and the national interest have always prevailed. A sound, legal immigration policy is in our national interest. We’re working hard, and I believe we will soon have a comprehensive immigration reform policy.

I’ll close with this: We in the Western Hemisphere need to continue building a regional framework to improve standards of living, create prosperity and compete globally. Other continents—in Europe and Asia for example—are developing regional strategies to improve their competitive advantage.

At the conclusion of the November 2005 Summit of the Americas, President Bush announced that a Minister-level meeting on Western Hemisphere competitiveness should be convened.

I’m pleased to tell you that the inaugural Americas Competitiveness Forum will be held June 11-12 in Atlanta, Georgia.

We’re expecting high level government participation from all 33 invited countries as well as senior executives from major corporations. I hope all of you will join me at this historic event.

It is with great pride that I commit to you that the Bush Administration is focused and will stay focused on the hemisphere to the last day. There’s a lot of work to do. The promise of the Western Hemisphere is one of hope, opportunity and freedom. Working together we can secure that promise.

Thank you.