Secretary's Speech

Secretary of Commerce Carlos M. Gutierrez
Remarks at the World Affairs Council of Philadelphia
Philadelphia, Pennsylvania

It’s good to be at the World Affairs Council, to be with those interested in enhancing America’s role in the world. Thanks for coming.

I’d like to talk to you about how our country can grow in the dynamic global economy. There’s really no substitute for a growing economy—with it everything’s possible, and without it, any advancements we try to make will be more difficult.

This Administration is committed to policies that improve the environment for American business. We’ve done that through low taxes, restrained spending and an increasingly open economy, and we’ve produced results:

• Last quarter our economy grew 3.8 percent;
• Created over 8.1 million new jobs since August 2003;
• Penn. unemployment rate’s lower than nation’s; (4.7 Sept/4.5 Sept)
• In Philadelphia it’s even lower at 4.4 percent. (August).

An important step we can take to keep America’s economy strong is to continue to open global markets. We’ve found that protectionism doesn’t protect— and that openness has been a critical factor in making us the most competitive, free and innovative large economy in the world.

Indeed, one of the biggest drivers of GDP growth has been international trade. U.S. exports last year increased 12.7 percent to $1.4 trillion, an all-time record. We’re on track to beat that this year with continued, double-digit growth.

Pennsylvania exported over $26 billion last year, up more than 60 percent from 2003. That makes Pennsylvania one of the nation’s ten largest exporters. Your port’s one of the busiest in the country, with more than five million metric tons of cargo handled last year, 20 percent more than 2005.

That impressive growth here and around the country has played an important role in ensuring the spread of peace and prosperity worldwide.

Our leadership is a driver of the global economy, not just our own. We must keep this momentum going.

One tool that dramatically lowers trade barriers is Free Trade Agreements. This Administration has put into force FTAs with 14 countries and negotiated four more. In each and every case we’ve seen our exports increase.

Indeed, we had a deficit with CAFTA-DR countries prior to our trade agreement with them. Now we have a surplus. And while countries with which we have an FTA only make up about 7 percent of global GDP, they account for more than 42 percent of our exports.

The four FTAs now pending before Congress—Peru, Colombia, Panama and South Korea—will drive economic growth and promote both security and social justice.

Combined, these FTAs will increase market access to fast growing economies with more than 126 million consumers with a GDP of $1.1 trillion.

Pennsylvania exported nearly $800 million to these four countries last year, up nearly 90 percent since 2003. But there is much more potential for growth.

FTAs increase American competitiveness, and in today’s global business environment we can’t afford to pass up these opportunities, particularly in our hemisphere.

The three pending Latin American FTA countries are developing fast, and FTAs can enhance our role as their economies continue to grow.

Peru will be coming up for a vote in the House very soon. We are looking forward to it receiving full and fair consideration as the first of four agreements that deserve the support of Congress.

We’re already Peru’s largest trading partner; however companies around the country and here in Philadelphia will benefit from even greater access to Peru’s markets.

Consider a local example of a company that has done well in Peru, Engineered Arresting Systems Corporation in Aston. Working with the U.S. Export Assistance Center here they found distributors in Peru for their airport ground support equipment.

Now they’re selling hundreds of thousands of dollars a year in Peru. An FTA will make them even more competitive.

After the vote on Peru, Colombia will be the next Congress will consider. It is deserving of their support.

An FTA with Colombia is particularly important— Businessweek recently called it “an extreme emerging market.” I’ve been to Colombia twice recently and I have to tell you it’s the most impressive turnaround of a country I’ve ever seen.

• Colombia’s one of our staunchest allies in the region
• They are a partner in the global war on terror.
• Violent crime and terrorism has dropped by nearly half between 2002 and 2006; and
• They’ve continued impressive economic reforms while staying true to the principles of democracy.

To deny Colombia’s FTA would be one of the biggest foreign policy mistakes of our time in our region.

Indeed there’s no more tangible step we can take to encourage growth, stability and prosperity in our hemisphere than passage of the three FTAs in Latin America.

Because of preferences extended by our Congress, more than 90 percent of imports from these three countries now enter the U.S. duty-free, while our exporters pay millions in tariffs each year.

An FTA will not only eliminate most tariffs our exporters now pay, it will give our exporters a boost through greater market access in these fast-growing markets.

Perhaps just as important, FTAs will promote and help sustain the values of good governance, transparency and respect for the rule of law—all hallmarks of stable societies.

Hemispheric stability and prosperity are tied to these FTAs and in particular to Colombia’s success. Indeed, not passing these vital agreements creates opportunities for those who don’t share our democratic values and seek to destabilize the region.

Along with Free Trade Agreements, a successful outcome of the Doha round of WTO trade negotiations can make a tremendous difference in global growth.

Achieving that goal will take leadership from both developed and developing nations.

We’re at a critical juncture in these negotiations, and we are seeking leadership from our trading partners.

This is an opportunity to open markets and spur new trade flows for our exporters, and at the same time pull hundreds of millions of people out of poverty in the developing world.

Success at Doha will allow all of us to experience the benefits an ambitious outcome can bring.

One role the government has in trade development is to negotiate and enforce trade agreements so that American exporters can compete worldwide. But we do more than that.

Here in Philadelphia, the Commerce Department has made investments in public-private partnerships that promote economic development and provide hundreds of area companies the help they need to be better exporters.

For example, we’ve made nine targeted investments totaling more than $10 million of economic development assistance here in the last two years alone.

Projects have ranged from helping with the relocation of the Tasty Baking facilities to investing in the Ben Franklin Partners of Southeastern Pennsylvania.

With these investments new opportunities are being created through the development and expansion of high-tech business start-ups in the region.

We’re also committed to enhancing the competitiveness of companies in international markets through export promotion.

One project is a $500,000 investment in World Trade Center Philadelphia. This will help smaller manufacturers in the Greater Philadelphia region promote export growth.

Another long term commitment we’ve made to the region’s competitiveness is the Philadelphia U.S. Export Assistance Center. Over the past two years they’ve helped 238 small and medium sized companies export over $100 million in goods and services to more than 90 countries.

Both of these investments will help this region compete and grow in the increasingly integrated and international marketplace in which we live.

While there’s no shortage of challenges our country faces today, if we’re able to open and enter new markets successfully we’ll have made great strides in increasing our nation’s long-term competitiveness.

And if we can encourage social justice and spread the rule of law and democracy in our hemisphere through the free trade agreements, we’ll have gone a long way towards enhancing our security.

We look forward to working in a bipartisan way to pass all four agreements and to getting the Doha Round through.

Back in 1961, President John F. Kennedy created the Alliance for Progress for Latin America. As President Kennedy said then, we should seek:

“To build a hemisphere where all men can hope for a suitable standard of living and all can live out their lives in dignity and in freedom. To achieve this goal, political freedom must accompany material progress...a tribute to the power of the creative energies of free men and women, an example to the entire world that liberty and progress walk hand in hand.”

Ladies and gentleman, I wonder what John F. Kennedy would say about our debate today? I believe he would encourage us to seek greater cooperation with our hemisphere and to advanced our free trade agenda, now.

These agreements are symbols of progress and legacies of American leadership, legacies of which I’m proud be a part. Thank you.