Secretary's Speech

Commerce Secretary Carlos Gutierrez Remarks to the American Chamber of Commerce
São Paulo, Brazil

Thank you.

I'm pleased to be back in Brazil and to have the opportunity to speak with you. I appreciate the important work of your organizations.

Thanks to each of you for being here--representing companies based in Brazil and throughout the Americas.

President Bush and President Lula had a good meeting at Granja do Torto in November. They talked about our similar aspirations and objectives.

Our presidents recognize the changing global economy. They know that our countries' individual competitiveness will increasingly be defined by the level of cooperation within our region. So they agreed to strengthen our relationship.

I came here this week to launch the U.S.-Brazil Commercial Dialogue with my counterpart, Minister of Development, Industry and Trade Luiz Fernando Furlan.

On Tuesday we talked about increased cooperation and trade between our countries.

Commercial Dialogue
Minister Furlan and I believe the Commercial Dialogue will help clear the road to greater economic engagement.

We have a shared interest in creating the right conditions for global competitiveness.

In fact, the overall theme of our Commercial Dialogue focused on actions we can both take to increase our mutual competitiveness. We agreed that improving customs is one way to do this.

We know that manufacturers--like many of you here today--have to be agile. We understand that you operate in one country, while sourcing from several others. So, clearing customs quickly and easily is vital to staying competitive.

Having an efficient ports system is a competitive advantage.

We also agreed to technical cooperation on standards and patents and trademarks.

A possible area for future cooperation is in opening new markets. As Brazilian companies seek new markets, including China, India and Russia--and as exports to China diversity beyond commodities, to include more technology, pharmaceuticals, and software--I expect our interests to become even more aligned.

We have new opportunities to cooperate. For example, it is in our mutual interest to disrupt the international supply chain of pirated goods. And we can better protect and enforce our intellectual property rights.

The trend in the Americas is to open economies, welcome investment and engage in trade.

All the focus on a few loud voices that sound very antiquated are distorting the true picture.

Today, the great majority of the nations in the Americas honor democratic principles. They are realistic. They are pro-business. They understand the value of a strong private sector. They welcome capital and they are pragmatic.

Regardless of Party, the overwhelming majority of nations throughout the Americas have the same goals. They want to create jobs, improve social justice and to improve the lives of all our citizens.

Our challenge is to deliver the benefits of democracy to all of our people.

Most countries, after much experimentation, have realized the challenge is not redistributing poverty, but to lift people out of poverty.

We owe our people results. Governments and business will be judged by results.

Trade, capital and free enterprise deliver results. Isolationism and protectionism do not.

NAFTA
Look at what's happened since NAFTA was implemented.

From 1993 to 2005, the growth rate for Canada is almost 50 percent. For Mexico, it's almost 40 percent. And the United States has grown almost 48 percent.

Our combined trade went from roughly $300 billion dollars to roughly $800 billion dollars.

Canada is experiencing its lowest unemployment rate in 30 years. At 4.6 percent, U.S. unemployment rate is lower than the average of the 60s, 70s, 80s, and 90s. And Mexico has sustained single-digit inflation and now has the highest dollar reserves in years.

Chile/CAFTA
We are seeing similarly impressive results in Chile.

We expect to see results in the CAFTA countries as well.

The World Bank reports that economies that sign free trade agreements tend to grow an additional 0.6 percent annually during the first five years after implementation.

For CAFTA, this would translate into lifting nearly half a million Central Americans out of poverty by 2010.

We should be doing more business together in the Americas.

The United States is proud to be Brazil's largest single trading partner and largest single foreign investor.

But we believe that we should do more business together.

While our U.S.-Brazil bilateral trade has grown to nearly $40 billion dollars, there's still a lot of potential for growth.

On a per capita basis, we trade significantly more with all other NAFTA countries ($5,618), DR-CAFTA ($771) countries, as well as Chile ($735)--not surprisingly.

But what may surprise you is that the United States also trades more per capita with Argentina ($217) and Columbia ($327). Our bilateral trade on a per capita basis with Brazil is $212.

Facing Global Competition
Today, we in the Americas must compete in a global economy that includes 2.3 billion people in China and India.

In fact, Brazil competes with Asian economies more than it does with the United States.

China has attracted more than $622 billion in total foreign direct investment. And China's global exports last year totaled over $762 billion.

This could be a great time for Brazil and the Americas to unite and compete.

Real leadership is about results. Whether you are from North America, Central America, South America. All belong to the Americas. This is not the time to be divided or to narrow our thinking. This is the time to recognize that we can deliver results by uniting and becoming more competitive.

For the world's leading free market economies, the challenges we'll face during the 21st century demand cooperation.

The United States stands ready to do our part, we are optimistic about the future of the Americas, and we are proud of our friendship with the people of Brazil.

Thank you.