Remarks by Christopher A. Padilla
Under Secretary of Commerce
for International Trade
AACCLA Annual Conference
U.S. Chamber of Commerce
WASHINGTON, DC
September 23, 2008
It’s a great honor to be here today with such a distinguished audience. I’d like to especially thank you, Vice President Escobar, for taking the time out of your busy schedule to be with us today, and commend you and President Saca for the remarkable work you have done to competitively position El Salvador in the 21st century economy. And thank you, Mr. Galt, for the kind introduction and Francisco Arias for all the work that you do in the region to promote trade and investment.
Nuestro Futuro es Brócoli
“Our Future is Broccoli.” Two years ago, I was traveling in western Guatemala, visiting the beautiful scenery near Lake Atitlan. As my wife and I were driving along the rural countryside roads, I kept seeing billboard advertisements for local farmers that read: “Nuestro Futuro es Brócoli.” I approached a local farmer and asked what all these billboards were about.In a very real sense, broccoli represents the economic vitality and diversity of Guatemala. In recent years, increased trade and investment flows have energized and diversified an economy whose primary commodities were once only corn and beans. Now, Guatemalan farmers count among their various cash crops snow peas, broccoli, radishes, and cabbage. For Guatemalans, broccoli is not simply a crop to be harvested, but a representation of the empowering forces of the global economy.
I cannot imagine a more appropriate time to be reaffirming our shared values and hemispheric commitment to economic freedom through open markets and vibrant trade flows. Democracies have a responsibility to equip their people with economic tools so they do not turn to arms or drugs. As advocates of openness, transparency, and growth, we make the choice to head in the direction of prosperity and turn our backs on terrorism, false promises, and unsustainable and populist economic models. We believe in welcoming our people to a middle class -- a more decent way of life for struggling citizens of this Hemisphere.
And while there are some who actively challenge our pathway to prosperity, we must remain steadfast and unabashed in our commitment to a stronger, safer, and more prosperous Hemisphere through our democratic policies, partnerships, people, and trade.
AACCLA's mission -- to promote trade and investment between the United States and the countries of the region through free trade, free markets, and free enterprise -- is a recipe for economic growth and opportunity. Democracies that follow this recipe deliver hope and formal opportunities to their people. Increasing trade, prosperity, security and social justice throughout the hemisphere is a top priority for the United States, as we have signed Free Trade Agreements (FTAs) with our regional partners including Chile, the Dominican Republic, Honduras, El Salvador, Guatemala, Nicaragua, Costa Rica, Peru, Colombia, and Panama.
We are now avidly awaiting the entry-into-force of Costa Rica for CAFTA, and the Congressional approval of the U.S.-Colombia and U.S.-Panama Free Trade Agreements.
Taking a look at what we have done together as partners and what we have left to do, we know that we have made great strides in solidifying our democracies and opening our doors to trade and investment. We are excited that our we have set out on a pathway to prosperity, and are even more eager to advance by getting the FTAs across the finish line this year. And we know our partners share that sentiment.
This Administration supports the independent, free and proud people of the Western Hemisphere. Boosting the region’s competitiveness is key to building a sustainable future for our citizens into the 21st century amidst a constantly evolving global market. That’s why your work -- the dedication and resolve of the 23 AmChams operating on a daily basis throughout Latin America and the Caribbean -- is so crucial.
FTAs
One of the most direct ways our Hemisphere has helped pull people into the middle class is through open trading and investment regimes. Strengthening our economic relationships with key friends and allies is a win-win -- for the United States, and for our partners. You have witnessed this in the rapid growth in trade and investment volumes in your countries. As a consequence, I suppose the AmChams throughout the region have also seen an increase in membership. That’s good for you. It’s good for the United States. And it’s good for democracy, stability and security across our Hemisphere.
CAFTA-DR passed in large measure due to a coalition of organizations and individuals coming together, of which you and your members were a critical part. Through July this year, our exports with CAFTA-DR countries increased 23 percent over the same period last year. We need to make sure to continue to extol the benefits of free trade so that citizens, policymakers, and lawmakers alike understand that trade equals jobs, growth, and opportunity.
Trade to the United States
Trade is an increasingly important segment of our nation’s economy. 2007 was another record-breaking year, with $1.6 trillion in exports, increasing 12.2 percent over 2006. And at 12 percent of GDP, exports are a greater proportion of our economy than at any time in U.S. history. In fact, trade was the source of 25 percent of GDP growth in 2007.
FTAs are the best way to help businesses and exporters break into new markets. That’s why the pending free trade agreements with Colombia, Panama and South Korea are so critical. These countries combined represent more than $1 trillion in GDP and 100 million potential consumers for American products, and open up many economic opportunities for our respective partners.
The United States has implemented FTAs with 14 countries. Although these countries make up just 7.5 percent of world GDP, they purchase more than 42 percent of our exports. That means that America relies on our FTA partners to buy American-made goods -- a stimulus for the U.S. economy.
In the first six months of 2008, the trade balance in manufactured goods with our 14 FTA partners generated a surplus of $5.6 billion, up from a $13.7 billion deficit during the same period last year, an improvement of 141 percent over the first six months of 2007. In contrast, the trade balance with non-FTA partners improved by only 6 percent over the same period. Free trade works.
Building on Our Success and Good Relations in Latin America
I am optimistic that the U.S. Congress will approve the pending FTAs, because it is clear that openness works. It is clear that openness and democracy are a winning equation and provide solutions to the development and competitiveness challenges we jointly face. These agreements are a win-win for investors, consumers, and workers. And although our election is close at hand, President Bush has made it clear that we will be “sprinting to the finish.” That means continuing to lead, continuing to work, continuing to stand up for what’s right -- openness, prosperity, and stronger democracies.
No matter the outcome of the election, now is a time when good governance in Latin America and the Caribbean is more critical than ever. Now is the time to measure the positive impact of the expansion of market access and the lowering of trade barriers in U.S. and Hemispheric competitiveness.
And now is the time to strengthen -- not abandon -- ties with democracies on the right, left and center that believe in and promote freedom and free markets. This includes our free trade partners and others, such as Brazil, where our partnership has never been as strong as it is now.
The Role of Government and of the Private Sector
I would like to thank the American Chambers of Commerce across Latin America and the Caribbean, for the work you do in strengthening those ties of friendship and prosperity. Next week, some of you will see Commerce Secretary Carlos Gutierrez in the Dominican Republic and Costa Rica, and then he will visit Brazil for a meeting of the U.S.-Brazil CEO Forum. We have seen so many of you over the past several years in all corners of the Hemisphere and know the widespread impact you have across the region.
I’d like to take a minute and pass on a few of my thoughts for the future. If I’ve learned anything in my time in public policy in Washington, it’s that Congress is an unpredictable medium in an election year. Regardless of which candidate assumes the next Presidency, I am confident that his Secretary of Commerce will appreciate the benefits of open markets as a core pillar for building opportunity in our democracies. Your continued counsel will help bridge the transition between U.S. Administrations in the Hemisphere. We deeply appreciate your support and commitment to the future of the Hemisphere and urge you to keep up all that you do.
We know that it is the Government’s responsibility to create an environment that allows the private sector to make growth happen. We are not the ones who grow the flowers, sell the tractors, make the apparel, provide the services and employ the workers that keep our economy moving -- it’s you and your members who do. At the Commerce Department, we never forget that.
And while transparent government and responsible policies are necessary for free societies to flourish, the private sector adds a critical element to the rising tide of economic freedom. You are on the front lines, embedded in the region, putting capital at risk. You put people to work. You create customers. You take opportunity and turn it into jobs, investment and growth. This -- more than armies or dictators or any other movement -- is transforming the Western Hemisphere.
Conclusion
Thank you for the opportunity to work with you these past several years. I know that history will continue to prove us right on the power and economic importance of free trade agreements – especially those with Colombia, Panama, and South Korea. These trade agreements strengthen key allies by promoting economic freedom and opportunity at a time when others in the Hemisphere and world seek just the opposite. Let’s advance the cause of economic freedom and encourage openness at this critical time -- we can all lead in the development of prosperity in our Hemisphere, so the responsibility is yours.