Secretary's Speech

Secretary of Commerce Carlos M. Gutierrez
U.S. Chamber of Commerce
Washington, D.C.

Thank you for inviting me to the U.S. Chamber.

I just came from a meeting with President Bush, and he sends his regards. He understands the importance of keeping American businesses strong, and I'm pleased to be here on behalf of this Administration.

I believe business leaders are true heroes in our economy. Too often it is easy to criticize businesses ? as if being successful in business is a bad thing. Businesses are driven by people with the ingenuity and drive to create new ideas, opportunities and most importantly, jobs. So, thank you. You and your employees are the ones who make this the greatest economy on earth.

Today, I'd like to highlight the strength of our economy. If you read the latest editorials and economic outlooks, you'd be hard pressed to find a consistent message or a clear picture. I'm always amazed that pundits insist on highlighting the negative. Listen to these headlines from 2006:

• "Economy's surge stirs questions about when slowdown may come"
• "Economic storm signals"
• "Intimations of Recession"
• "An Anemic Jobs Recovery"

To read the paper, you'd think our economy was spiraling into a black hole. But let's take a look at the facts:

• Our economy grew 3% over the last four quarters; that's 20 straight quarters of uninterrupted growth.
• This morning the Labor Department announced that 167,000 new jobs were created in December.
• That's over seven million jobs created since August 2003--more than all of the European Union and Japan combined.
• Unemployment is low at 4.5%.
• Real after-tax income per person has risen by 9.4% since the President took office.

We do have some challenges, of course. The softening housing market has loomed as one sector which could potentially drag down economic growth. In my book, the correction in the housing sector was inevitable. The good news is that our economy has been able to absorb the correction.

Once again, our economy has proven to be resilient and strong enough to withstand shocks that would knock over most other economies. And time and again the naysayers have been proven wrong.

Our economy is strong because U.S. business is strong.

The stock market has hit record highs. Corporate profits were at a 40-year high for the 3rd quarter.

And small- and medium-sized businesses continue to contribute to the economy as well. They employ half of all private sector employees and pay more than 45% of U.S. payroll.

Ten to 15 years ago, companies measured success by how much business they did abroad. There was a belief that the U.S. was a mature market and the only place for growth was outside our borders. But that was a misconception. Today, many companies find the U.S. to be their strongest market.

If you can make it here--you can make it anywhere. A strong U.S. foundation lays the groundwork for international expansion.

So, how do we keep U.S. business strong?

To keep our position of strength in the world, we cannot be complacent. We must recognize three key realities:

1. The best thing we can do to continue to grow our economy and our citizens' prosperity is to continue to make this the best country in the world to do business.

2. We must open foreign markets, engage competitively in trade, and spread free enterprise to the rest of the world.

3. Finally, we must face the reality that, without a strong workforce, we won't be able to achieve our full potential.

Keeping the U.S. the best place in the world to do business will require maintaining a pro-business tax and regulatory environment, addressing regulations and taking action to solve our energy needs.

An important way in which we support a strong business environment is by being good stewards of public resources. As the President said earlier this week, "We've got to make sure we spend the people's money wisely."

That's why he is putting forth a five-year budget proposal that will balance the federal budget; why we will work to restrain spending, particularly in the area of earmarks; and why the President must have line-item veto authority.

If we accomplish these fiscal goals, we can keep taxes low for Americans and promote policies that reduce regulation, create incentives for innovation and promote investment.

We did just extend some key tax relief with the passage of the "Tax Relief and Health Care Act of 2006." This $38 billion tax cut is cause for praise, but it is not enough. We need to recognize that the last thing our government, businesses and citizens need is a tax increase. In fact, we need to make the tax relief permanent.

Also, our regulatory environment must not unduly burden business. Regulation should protect as necessary but not stifle innovation, competition and progress.

Tort reform and medical malpractice reform are two areas in which we need to ensure regulations don't hurt economic growth.

Another great challenge to our economic future is energy dependence. While the recent legislation which opened key portions of our Outer Continental Shelf will help reduce our dependence on external resources, there is more to do.

Opening ANWR is an excellent solution. We must also push for alternative sources, such as biofuels, and innovative technologies which will reduce our overall consumption, and provide new opportunities for U.S. businesses. America must become more energy self sufficient.

Opening more overseas markets is another way to keep U.S. business strong. In an increasingly global economy it is easy for some to suggest protectionism would protect American jobs. It won't. The only way to protect American jobs is to encourage innovation, expand job training, promote private investment and compete. Doing so requires that we continue opening markets throughout the world.

Business has responded with tremendous enthusiasm to the new opportunities and we are creating an export culture throughout our country.

In fact, exports of goods and services have increased at a 5.8% annual rate since President Bush took office. And exports are now outgrowing imports.

In 2005, the U.S. was the largest exporter of goods and services in the world with $1.3 trillion dollars. 2006 will be another record year. Through October, overall exports grew 13.1% from the same period last year, while imports grew 11.7%. Exports to China surged 34%. Imports from China grew 17.6%.

And, although FTA (free trade agreement) countries only make up 7.3 percent of the world's GDP, exports to these countries comprise 42.5 percent of U.S. exports.

We need to stay on the track of opening overseas markets. The Omnibus Trade Bill was a hopeful sign Congress will continue to recognize that American businesses, workers, farmers and consumers benefit from trade.

Last month I was in South Korea where I discussed the importance of the KORUS FTA, which will be the largest Asian FTA and our largest FTA since NAFTA.

Around the globe we are seeing double digit export growth. Greater access to new markets, such as Peru and Colombia , will enable U.S. businesses to hire more, produce more, export more and create more wealth.

And keep in mind that opening markets involves more than just trade--it includes investing and competing in foreign markets--which also benefits the U.S. economy.

For example, a company that opens a bank and provides its services in another country gains access to new consumers, while growing market share and building wealth for stockholders and employees back home.

The export of our business values--good governance, safe working conditions, and respect for intellectual property rights and the rule of law--is also essential for a thriving international economy.

Let me also add that America remains committed to working to keep the international economy growing. Advancing Doha negotiations would be an important way to further that commitment, and we are working hard on this issue.

Since President Bush took office, we have implemented free trade agreements with 10 countries and negotiated market opening agreements with four more. These agreements have boosted our economy and provided greater access for exports of American goods and services, and greater choice to millions of American consumers.

We can't predict what the Congress will do, but trade promotion authority is critical so that the United States can continue to open markets around the world - which is why no president should go without it.

We must also ensure we have the best workforce in the world to drive U.S. business.

First and foremost, we must educate our own workforce for the future. The No Child Left Behind Act was an important initiative for addressing challenges within our public school system. And it's working. The gap among minorities is closing while student achievement is rising across the U.S.

This progress is cause for celebration for the sake of our children, and for the sake of our economy. An educated workforce will help America stay competitive in the future. And that is the central focus of the President's American Competitiveness Initiative, another important component of our plan for a workforce for the future.

We simply must do a better job sparking student interest early on in fields of science, math and technology. Without these young people in the pipeline to run your businesses in the future, U.S. economic leadership could be at risk.

But the workforce of the future isn't limited to a discussion about education. Immigration is also a part of the puzzle. While we work to create a stronger foundation for our own students, we must still acknowledge the current shortage of high-skilled workers. We need to attract and keep the talent that currently comes to the U.S., studies in our great universities and returns home to compete against us. So we need immigration reform for high-skilled workers.

We also have a labor shortage. Everywhere I go, business owners tell me they can't fill jobs. Immigration is a critical issue facing our economy and our workforce. We have begun to deal with the issue by addressing border security--the first and most important aspect of reform, but it is only the first step.

We need to create a temporary worker program, and a path to legalization for workers who can achieve the appropriate requirements. We need a comprehensive solution.

In 2007, the President remains steadfast in his commitment to keeping taxes low, opening up new markets for American goods, restraining government spending and reducing our reliance on foreign oil, among other issues.

Obviously, the November election provided us with a different framework from which to address these concerns. And while President Bush will continue to govern by his principles, he has directed his Cabinet to reach across the aisle to work with members of both parties for the common good.

Together, we will address the challenges facing our nation, and our economy. The U.S. Chamber is a trusted voice in American business. We rely on your input, your expertise and your activism.

In 2007, we will continue to push forward with our agenda and look forward to working with the U.S. Chamber and business leaders across the country to continue to promote the policies that will bring further prosperity and promise to all Americans.

Thank you.