Secretary's Speech

U.S. Commerce Secretary Carlos M. Gutierrez
Remarks at the U.S.-Middle East and North Africa Trade and Investment Conference
Amman, Jordan

Thank you for the kind introduction. Good afternoon, everyone. It’s an honor to be here.

I want to thank His Majesty King Abdullah and our other friends in Jordan for their gracious hospitality.

I also want to recognize our partners in convening this conference: the Business Council for International Understanding in collaboration with the U.S.-Jordan Business Alliance, and our many sponsors.

When President George Bush was in the Middle East last month, he spoke of the new era that is unfolding in the region: an era defined by freedom and justice; an era where people can build a better future for themselves and their families.

The United States believes that trade and investment are strategic tools for building a peaceful and prosperous future.

Today, this region is writing the next chapter in its centuries- old history with the promise of hope and opportunity and progress for the rising generation of talented young people.

We want to be partners with you in creating this new beginning.

There is tremendous potential among the Middle East and North Africa countries for greater intra-regional trade and for greater economic ties with the United States.

Opportunities are being left on the table. We could all be doing more business together.

Yesterday, I announced that the Commerce Department plans to hire a contractor based at the Palestinian American Chamber of Commerce in Ramallah to promote bilateral trade.

We’re also supporting the efforts of the Middle East and North Africa AmCham Council to increase trade with the United States. We applaud the Council’s advocacy for governments in the region to continue economic reform and trade liberalization measures.

The World Bank reports that economic growth in the region is strong and rising. Many Middle East and North Africa economies are benefiting across the board from the surge in oil prices.

Infrastructure in the region is changing. Nations are investing in their citizens. Doors are opening to foreign trade and investment as a result of economic reforms and trade liberalization. The U.S. supports you in these efforts.

Since President Bush took office, free trade agreements with Jordan, Bahrain and Morocco have been implemented and an FTA with Oman has been signed. These agreements clear the path to greater economic engagement and growth.

One example: since the implementation of the U.S.-Jordan FTA in 2001, two-way goods trade increased from about $568 million to $2.0 billion during the first 11 months of 2007.

Jordan’s annual real GDP growth was 5.3 percent in 2001. And growth continues to be strong--an estimated six percent in 2007. All together, Jordan’s GDP grew by 44 percent between 2001 and 2007.

When markets are open, trade is liberalized, freedom is fostered, entrepreneurial spirits are unleashed, and the quality of life improves.

The 2008 Index of Economic Freedom released by The Heritage Foundation and The Wall Street Journal reports that the freest 20 percent of the world’s economies have twice the per capita income of those in the second tier and five times that of the lowest 20 percent least-free countries.

Simply put: the freer the economy, the stronger the economy. The United States is encouraged by the movement toward economic freedom seen throughout the region.

Bahrain’s commitment to an open economy and to making it easier to start up businesses has consistently made it one of the top ranked business destinations in the Middle East.

Saudi Arabia, which has put many commercial reforms in place, was ranked 23rd among 178 countries for ease of doing business in the World Bank’s annual “Doing Business” report in 2007.

Egypt has made major changes to tax policies and its business regulation environment, and it was cited in the Economic Freedom index as the most improved economy in the world.

The U.S.-Morocco Free Trade Agreement has resulted in a host of new laws that improve protection of intellectual property rights, strengthen labor laws, and provide greater market access.

The Kuwait National Assembly recently passed a law lowering the income tax on foreign companies from 55 percent to 15 percent. This is a substantial policy change.

We encourage Kuwait to lower the rate even further to be competitive with countries in the region such as Bahrain and the United Arab Emirates that have zero tax on the income of foreign companies.

These are all steps that drive economic growth and prosperity.

I was in the private sector for most of my career and worked on four continents. Capital is attracted to a fair, stable and open environment.

In my experience, companies look first for a favorable business climate.

Market access is an essential issue. Tariff and non-tariff barriers, red tape, burdensome regulations, delays in clearing goods, and transparency concerns work against establishing stable trade relationships.

Rule of law also is an important part of a business-friendly environment. Executives and investors want to know that the playing field is level, and the rules won’t change in the middle of the game.

Confidence grows when contracts among private companies as well as with state agencies are honored; and when courts give even handed, equitable treatment to all agreements among all parties.

Openness to investment is also a mark of economic freedom and progress. Foreign direct investment promotes growth and is an important source of innovation, exports and jobs.

In 2006, the United States, with a favorable business climate and lucrative consumer market, attracted $175 billion in foreign direct investment.

Today, our total stock of foreign long-term investment is nearly $2 trillion. Foreign direct investment supports nearly 10 million American jobs directly and indirectly.

Through the new “Invest in America” initiative, led by the Commerce Department, we are working with the international investment community to facilitate greater investment in our country.

Let me say here that I recognize that many potential investors are concerned about the U.S. review process.

The fact is that since 2000, the Committee on Foreign Investments in the U.S. has reviewed only about five percent of potential deals. Of these, risk mitigation assurances were requested for only a handful.

Our policy hasn’t changed. We believe that openness to trade, investment and people is a great asset to any country.

I’ll close with this: We applaud the trade liberalization that is taking place throughout the region and look forward to the day when the U.S.-Middle East Free Trade Area initiative is realized.

This Conference presents a great opportunity to take our economic partnerships to the next level and to create stronger intra-regional commercial ties with U.S. suppliers and investors.

The value of enhanced trade and investment relationships, however, goes far beyond the economic benefits.

Trade and investment help build prosperity. Trade and investment help support educational, health, and social programs that elevate people and communities.

Importantly, at the bottom line, trade and investment help create growth. And with growth all things are possible.

We believe that with the human talent in the Middle East/North Africa region, this can be one of the most vibrant economies in the world.

We look forward to working with you as friends and partners to promote growth in each of our countries and to create a Middle East/North Africa region that is a thriving center of freedom, peace, and prosperity.

Thank you.