Secretary's Speech

U.S. Secretary of Commerce Carlos M. Gutierrez
Remarks to the Greater Fairbanks Chamber of Commerce
Fairbanks, Alaska

Thank you Senator Stevens. No matter the weather, the reception that you and your fellow Alaskans extend to me on my trips here are always warm.

Alaska is well represented in Washington with Senators Stevens and (Lisa) Murkowski and Congressman (Don) Young. They’re among the most effective members in Congress.

We are all concerned about Alaska’s—and the nation’s—economy. We want to make sure that we’re helping create an environment that promotes growth.

I’d like to talk to you about a few ways we’re doing that by:

• Preparing ourselves for new technology and increased connectivity, particularly next year’s digital TV conversion;
• Finding the energy we need to grow;
• Keeping our economy moving as we’re going through a correction;
• Lowering barriers to trade, with a focus on three upcoming free trade agreements.

In the span of a generation the landscape and the livelihood of Alaskans has been transformed, first through gold, then through oil, and now through increasing access to people, goods and information.

Today Anchorage is the number one airport by landed weight for cargo aircraft in the country, with more than five million passengers passing through their airport each year. FedEx estimates their hub is less than ten hours by air from 90 percent of the industrialized world, with the airport generating one out of eight jobs in Anchorage.

Technology has also played an important role in bringing the world closer to Alaska, and Alaskans closer to the rest of the world.

One of the more important ways technology will change how Alaskans see the world is the switch to Digital Television next February—it’s the biggest change to TV since color.

The Commerce Department is in charge of this transition which affects Alaskans with older analog television sets that are now using free, over-the-air service.

This change opens up airwaves for first responders so they can better communicate with each other during emergencies. It will also free up airwaves for new, exciting innovations, while also making television reception crisper, clearer and with more channels.

We're encouraging Alaskans who will be affected by this change to consider one of three options: purchase a converter box; connect to cable, satellite or other TV service; or buy a TV with a digital tuner.

Those in need of a converter box can request a coupon for $40 towards their purchase from the Commerce Department. Then they can purchase the digital converter box the same way they’d purchase other consumer electronics—over the phone, online, or at nearby stores.

While it is important that we adapt to new technology in order for our country to remain competitive, our energy independence is also critical to America’s future.

We agree with Senator Stevens that a balanced approach is called for. We can do both: preserve our environment and help meet the nation’s energy needs.

While North Slope oil has been a boon for the economy here, production has been decreasing. We can and should do more to tap domestic energy resources wherever they are to be found. One way is by seeking ways to get the tens of trillions of cubic feet of natural gas on the North Slope to market.

Record oil prices are now a top-of-mind economic issue for Americans, and reliance on foreign oil is one of our most serious national security concerns. By approving legislation to develop ANWR, we’d have access to an estimated 10 billion barrels of oil—10 billion barrels that we wouldn’t need from foreign sources. In fact, 40 percent of our trade imbalance last year—nearly $300 billion—was due to our “oil deficit.”

While some are calling for a ban on exploration, what we need is both exploration and new sources of energy. The new sources will take time to develop. We need to have the necessary will if we are going to confront our reliance on foreign oil. It’s easy to talk about it. Approving ANWR would prove we are serious and have the political will.

Our economy is facing strong headwinds. As growth has slowed, we are concerned about the impact these headwinds will have on Americans.

In anticipation of a slowing economy, the President took decisive action, quickly working with Congress on the economic stimulus package.

This package gives our economy a needed “booster shot.” It puts money back in the hands of consumers and spurs business investment. It’s an important example of the kind of bipartisanship in Congress that we hope to maintain.

The package includes two important provisions.

First, it provides tax rebates to more than 130 million households. Beginning in May, checks will start going out to taxpayers. Individuals will receive up to $600, while married couples will get up to $1200 in tax rebates, plus $300 per child.

We believe these rebates will have a significant, positive impact on consumer spending, which makes up about 70 percent of our economy. Through these rebates, individuals and families will be able to keep more of their hard-earned money to spend as they see fit.

Second, the legislation provides incentives for businesses to invest in new equipment, helping them to expand and grow.

While we expect weakness this quarter, we believe as the stimulus package takes effect we’ll see benefits in the second half of the year.

We are also addressing the turmoil in the housing sector.

• The Administration is working with the industry-led Hope Now Alliance, which has set industry-wide standards to streamline the process for refinancing and modifying certain mortgages.
• The Federal Reserve cut interest rates and has taken steps to ease stress in the credit markets by adding liquidity;
• The Administration launched a new Federal Housing Administration program that gives FHA greater flexibility to offer refinancing for struggling homeowners with otherwise good credit;
• The President has also called on Congress to move forward with reforms of Fannie Mae and Freddie Mac to ensure they remain focused on their housing mission.

Soon, we’ll see greater equilibrium as overhangs in the housing market dissipate, the impact of corrective actions take effect, and as other areas of our economy continue to strengthen, including exports.

One way the government can help make Alaska’s economy more competitive is by creating an environment where American businesses can grow globally.

• Last year, exports of goods and services increased by 12.6 percent to $1.6 trillion. It’s accelerating, with January exports up more than 16 percent over last January.
• Four consecutive years of double-digit export growth.
• Last year trade accounted for 12 percent of our GDP—a larger part of our economy than ever.

It is therefore critical now to do everything we can to increase our international competitiveness.

One of the best ways to do that is through passing three free trade agreements now pending before Congress—Colombia, Panama and South Korea. Alaska has been an important beneficiary of the increased access that free trade agreements have provided.

With these agreements our exporters will have increased access to 100 million consumers with a GDP of $1 trillion.

South Korea is the most economically significant for Alaska. South Korea is already your third largest trading partner— over $700 million last year, including exports of minerals, chemicals, fish and timber.

While there remain some issues, such as making American beef available to Korean consumers, we’re ready to move forward quickly once other agreements, including Colombia, are voted on.

Perhaps there is no better example of the confluence of American economic, humanitarian and security interests than the agreement with Colombia.

Without this agreement we put at risk all the progress that’s been made by the Colombian people and their democratically elected leaders.

We’ve been able to help them through Plan Colombia, a $5.5 billion bipartisan program designed to promote peace, combat the narcotics industry, revive the economy, and strengthen democracy. This has produced results. On my trips to Colombia I’ve seen:

• An increased application and respect for the rule of law;
• The positive results of democratic elections;
• Criminals being brought to justice;
• Significant reductions in poverty;
• The impact of the dramatic reduction of violence.
• Strong economic growth—averaging 5.2 percent since 2002.

From an economic perspective this agreement is good for America. For more than 16 years Congress has given more than 90 percent of Colombian imports duty-free access to the American market, while American exporters still pay hundreds of millions in tariffs each year. The FTA would make trade with Colombia a two-way street, benefiting America’s businesses, farmers and workers.

Now is not a time to turn our backs on an ally—interestingly, Colombia was our only ally in Latin America to fight beside us in the Korean War.

I strongly believe that there is no single action we can take today to sustain these positive trends and help our allies and friends than this agreement. Passing Colombia is key to getting all three agreements completed, and to showing the world that we are ready to compete and support our friends.

I am optimistic about our nation’s future. A lot is at stake. This is not a time to retreat or to pull back. History shows that confident nations are free traders, and our country is at its best when we lead internationally.

The people of Alaska are increasingly at the center of global commerce and one of its main beneficiaries. We now need to send a clear signal that that we will continue to lead in a world with tremendous opportunities for all to grow where freedom and free markets are allowed to flourish.