Text of Remarks by Under Secretary Grant Aldonas
On Competitiveness of the Caribbean In An Open Economy

In Puerto Rico today, Under Secretary of Commerce for International Trade Grant Aldonas was the keynote speaker at a luncheon hosted by The Puerto Rico Manufacturers Association (PRMA), the Export Council of Puerto Rico and the Chamber of Commerce of Puerto Rico where he gave remarks on the "Competitiveness of the Caribbean in an Open Economy." The text of those remarks, as prepared for delivery, follows.

"Competitiveness of the Caribbean in an Open Economy" by Grant Aldonas
U.S. Under Secretary of Commerce for International Trade
San Juan, Puerto Rico - March 31, 2003
- As Prepared for Delivery -

It's been many years since I had the opportunity to visit Puerto Rico, but I see the same energy and enthusiasm in the business community that I remember from my previous visits. What is particularly important is the renewed focus on international markets evident in the efforts of the Puerto Rico Export Council and its members.

I am also impressed with the commitment of Governor Sila Calderon and her staff. I had the opportunity to meet with the governor this morning over breakfast. At the end of our meeting, she agreed to accept a new title - La Embajadora de las Empresas Puertoriquenas! Governor Calderon stressed her interest in expanding new markets for Puerto Rico's exporters and her commitment to ensuring that Puerto Rico's voice was heard in Washington as well as elsewhere in the region.

The governor has surrounded herself with an extremely capable team. I will be meeting again later this afternoon with Secretary of Commerce Milton Segarra to outline our common objectives and our action plan for the next nine months. My goal for the next nine months will be to ensure that we follow through on the strategy we are developing today.

What I would like to do with the remainder of the time we have together today is put that strategy a broader political and economic context. That will help illustrate how we can capitalize on the unique position that Puerto Rico holds both within the United States and in the Caribbean. Afterwards, I'll turn to a number of the specific items that I hope will become a part of our common agenda.

One thing that must always be central in our thinking is Puerto Rico's unique position economically and commercially as part of the United States. It is the one spot in the entire region that already exists in a free trade relationship with the United States.

In that sense, the Commonwealth represents both the benefits and challenges of that unique relationship. But, it also provides a model of how the energy and commitment in the private sector can ensure that any of our trading partners in the region can succeed in an open economic relationship with the United States.

Just as the Governor's new title as "Embajadora" reflects, Puerto Rico and its business community can serve as witnesses to the fact that the model of democracy and free markets and reliance on the private sector as the engine of growth in the economy can work. And, can work for small economies as well as the largest economy in the world.

Indeed, Puerto Rico is uniquely positioned both to take advantage of the resources that the U.S. government, and the Department of Commerce in particular, can provide in the effort to open new markets for Puerto Rico's exporters. And, it is uniquely positioned to serve as an ambassador in the region for a model that works. To succeed, that is precisely the position we need to reinforce.

That is why I am pleased to be here in San Juan at what is a unique moment in the history of the Caribbean and its relationship with the United States. We are operating in a very dynamic environment. All of you in business know that.

It is dynamic by virtue of the unfolding process of globalization. What you understand and what every Puerto Rican business owner and investor must understand is that, the minute you establish your business, you are immediately competing in a global market. Your competition is not solely down the street in San Juan, or even in Florida or the Dominican Republic. For much of what we produce, our competition can come from half a world away.

The economic environment is also dynamic by virtue of the initiatives under way to lower trade barriers further throughout the region. There is, of course, the Free Trade Agreement of the Americas, which is scheduled to be concluded in 2005. We have the ongoing negotiations with our Central American partners, which we hope to conclude by the end of this year! In addition, other trading partners, such as Panama and the Dominican Republic, have asked to be included in the CAFTA negotiations.

In short, time is of the essence for Puerto Rico. Puerto Rico has to make sure that its voice is heard in Washington so that its interests are taken into account in developing our negotiating strategy. And, because of the unique role that Puerto Rico can play, we both have a shared interest in ensuring that Puerto Rico is also making its voice heard with our Caribbean and Central American trading partners.

As Governor Calderon stressed this morning, the relationship must be a two-way street. It involves both what Puerto Rico can contribute to the goals of U.S. trade policy as well as what Puerto Rico can and should expect from U.S. trade policy and the federal government.

Let me turn now to the agenda that we need to discuss to ensure that we are fulfilling that vision of Puerto Rico's role in American trade policy. First, there is a need to make sure that Puerto Rico is active and visible in Washington on behalf of its exporters' interests. Toward that end, I discussed with Governor Calderon the prospect of her visiting Washington within the coming weeks to meet with Secretary of Commerce Don Evans and other cabinet officials important to Puerto Rican export interests.

Second, there is an increasing need to ensure that Puerto Rico takes full advantage of its unique relationship as part of the United States. We, at the Department of Commerce, are committed to bringing together the federal trade promotion agencies in Washington to make you aware of the support and diverse range of services available to you as American exporters. Secretary Evans chairs an interagency group known as the Trade Promotion Coordinating Committee that brings together all of those resources. I want to put them to work on your behalf.

The first step toward that goal will be a conference we will sponsor at the end of May, together with our friends at the Puerto Rican Department of Economic Development and Commerce, to make you aware of our resources and how they can contribute to the growth of your export business.

Third, as all of you in business know, without a plan of action, you don't make progress toward your goals. In coordination with the exporters association, we plan to develop a list of the specific barriers that you face in increasing your exports, whether in the form of tariffs, product standards, taxes, or payment problems. We will then place a priority on getting as many of those resolved in the next nine months as possible.

For example, as you know, our Dominican friends are deeply interested in a free trade relationship with the United States. In my view, we should be make clear to our friends that there are a number of problems we need to resolve for Puerto Rican exporters first as a part of the price of admission to a broader and more productive economic relationship with the United States.

Fourth, we need, by this fall, to introduce Puerto Rico as America's trade bridge to the region. We should begin planning now for a trade and investment conference this coming fall that will advertise the opportunities for investment in and exporting from Puerto Rico as a route to tap the entire Caribbean and Central American market.

At the same time, we also need to develop a plan to integrate Puerto Rico fully into the structure of the new relationships we are building in the region. Those opportunities are available if we seize them now.

For example, Puerto Rico should consider hosting upcoming CAFTA negotiating sessions in San Juan. There would be no better way to put Puerto Rico's best face forward as a participant in support of the talks and a natural home for U.S. participation in the CAFTA.

These are just some of the items I hope we can agree on as part of a common agenda and a shared commitment on behalf of Puerto Rico's future and its competitiveness in a new era of expanding trade and competition. Puerto Rico has so many advantages, many flowing from its unique position as part of the United States. We need to find the ways best calculated to take advantage of that position and of what Puerto Rico can contribute to America's role in the region in the world at large.

Now, before I close, I want to honor Puerto Rico's contribution to the United States in one other perhaps more fundamental respect. While our own efforts here are focused on expanding the economic base of Puerto Rico and the opportunities for all of you as Puerto Rican exporters, we cannot overlook the fact that we are at this moment a nation at war.

The conflict in Iraq is ultimately about freedom - ours and theirs. It is about the freedom of both the American people and the Iraqi people from all that the despotic tyranny of Saddam Hussein represents.

When I spoke earlier about Puerto Rico's role as a potential witness for what America represents in terms of freedom, both political and economic, I was also referring to what over 5,000 Puerto Ricans are doing right now in Iraq. Governor Calderon told me an amazing statistic this morning. Not only are there over 5, 000 Puerto Ricans serving in our armed forces in the theater of operations in Iraq, but an overwhelming number of that group are volunteers who specifically signed up to fight for freedom in that benighted country.

There is absolutely no more fundamental form of witness and absolutely no greater testimony to the role that Puerto Rico plays as part of the United States - and plays on behalf of the United States - in demonstrating our continuing commitment to freedom and a future where we all can live in peace.

I want to honor specifically those Puerto Ricans who have fallen and add what words we can to comfort their families in their terrible loss. If there is any consolation, it can only be that their sacrifice makes possible everything else that Puerto Rico and the rest of America enjoys.

My friends Chirry and Tito Colorado took me to old San Juan yesterday. I had the opportunity to see the many families flying their kites with their children down at the old fort. I was struck by how much that vision is what life is ultimately all about and how important family is as a foundation of life here in Puerto Rico and in all our lives.

What it also did was speak volumes about the importance of the sacrifice that so many Puerto Ricans are making to ensure that there is never a day when those families cannot enjoy that afternoon by the old fort. I want to make a commitment to all of you that, in our sphere, we will make every effort to live up to the example of their sacrifice and to ensure that Puerto Rico succeeds on their behalf.

Thank you very much for the opportunity to speak with you today.