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Remarks at Trade North America Conference, Detroit, Michigan

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AS PREPARED FOR DELIVERY

Wednesday, September 9, 2009

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Deputy Secretary of Commerce Dennis F. Hightower
Remarks at Trade North America Conference
Detroit, Michigan

Thank you, Terry, for that kind introduction and for your service on the District Export Council.

We have some special guests from Canada and Mexico with us tonight as well as John Engler, president and CEO of the National Association of Manufacturers and the former governor of Michigan—and a former colleague of mine on the board of Northwest Airlines.

Thank all of you for being here.

I have only been on the job at the Commerce Department for a month, but that has given me plenty of time to identify one of the key challenges our department and the entire Obama administration faces:

Keeping trade flowing freely and fairly across our borders.

Canada and Mexico are our first and third largest trading partners—accounting for 32 percent of our total goods exports.

In North America, the U.S., Canada and Mexico—conduct nearly $2.7 billion dollars in trilateral goods trade each day.

Our economic prosperity and the jobs of millions of workers in North America depend on this trade relationship continuing to flourish.

But during these difficult economic times, we have inevitably seen a troubling rise in protectionist sentiment around the world.

Down that path lies more economic pain for us all.

We should all be heartened by the joint statement that Presidents Obama and Calderón and Prime Minister Harper made at their meeting in Guadalajara a few weeks ago pledging to—and I quote—“abide by our international responsibilities and avoid protectionist measures."

But as long as economic uncertainty remains, leaders in the public and private sector have a special responsibility to stay vigilant against impulses to turn inward and close off our markets.

More than most, the people in this room have seen how trade can:

  • create jobs and growth;
  • speed the delivery of transformative ideas and technology, and
  • hasten democracy and the spread of freedom.

Trade has always been crucial to North American prosperity. And it has assumed an even greater significance in the current economic climate, as other sources of growth, like consumer spending, have fallen.

But as we seek to expand our trade, it is important to acknowledge that the benefits of trade have not always been evenly distributed throughout our societies.

At the turn of this century, Gallup polled the American public on whether they thought foreign trade was an opportunity or a threat to our economy. Fifty-six percent said it was opportunity.

By last year, that figure had dropped to 41 percent.

The truth is that as long as trade is perceived negatively by growing numbers of American citizens, it is going to harm future growth prospects for us all.

That is why the Commerce Department, at the behest of Secretary Locke, is pursuing a series of initiatives that will further open up U.S. markets and provide tangible results to workers and businesses alike.

The first initiative is enhancing the United States' trade promotion efforts.

Commerce has an array of tools to help businesses at every point in the cycle—from the birth of an idea, to the standing up of the company with that idea, to finding markets once that idea has been transformed into a product or service.

But what we have found is that too many of these tools are left on the shelf.

As a consequence, many American businesses are missing out on viable opportunities—especially when it comes to accessing foreign markets.

Nine-seven percent of U.S. exporters are small- and medium-size businesses, but they only account for 30 percent of export value.

Meanwhile, of all the American businesses that export, 58 percent export to only one country.

We can do a lot better.

Commerce has export assistance offices in over 100 U.S. cities—and commercial officers in 77 countries, including seven in Canada and four in Mexico, that will actually tap their local contacts in places like Toronto and Mexico City to find new customers for American businesses.

But many businesses are not even aware that we offer these services. Too many businesses are reluctant to even try to navigate the complex government bureaucracy.

So, Sec. Locke has launched a pilot program right here in Detroit to provide a single point of contact for businesses and entrepreneurs. Whether a business needs help patenting a new technology or improving their manufacturing processes or getting access to a new market, they are going to have one place to go to access the full spectrum of both Commerce Department programs, as well as other federal programs available to our businesses. The department's goal is to unveil this concept in Detroit in the early Fall—and if it's successful—we’ll roll it out in other metropolitan areas across the country.

As we seek to open up markets for American companies abroad, the United States must also acknowledge that we have room to improve when it comes to increasing the secure flow of goods, services and people across our own borders.

In particular, the United States often makes it too difficult for foreign company executives to enter here to do business—a shortcoming that has had a tangible cost for American businesses by shutting out some of their best customers.

Historically, processing for special business visas could be done in a matter of weeks, but recently the time has stretched to as much as four months.

The U.S. government has already made some tentative progress on improving the situation, but we have also created an interagency task force with the State Department that will keep national security paramount while further improving the visa process.

Yet another area where red tape is challenging American businesses, and American security, is our export control regime.

Earlier this year, former National Security Adviser Brent Scowcroft chaired a distinguish panel to look into this issue, and he flatly declared:

“The national security controls on science and technology are broken.”

The panel concluded that our Cold War era export control system has constrained both U.S. commercial and military capabilities from expanding into new fields and from applying new scientific developments.

Our export control system seeks to make us safer by preventing sensitive items from falling into the hands of those who seek to do us harm. But we must adapt to America's changing security needs without inhibiting the competitiveness of U.S. companies and institutions. That competitiveness is critical to our economic and national security.

Commerce has already begun to implement programs that will reduce the export licensing burden on U.S. companies.

But we have also instructed Commerce’s Bureau of Industry and Security to initiate a review of our export controls. The review will focus on improving the system by targeting controls at those who seek to do us harm, while ensuring that the traditional control lists keep pace with technological developments. Most important, we’ve asked the Bureau to consider new ways to make the system more responsive, transparent, and efficient to reflect the realities of the global marketplace

Of course, Commerce is not just concerned with helping American companies get their products into foreign markets. Once they get there, we want to ensure they receive the same rigorous intellectual property protections that they would at home.

Despite America's remarkable dependence on innovation for future growth, the current system for protecting U.S. intellectual property—both domestically and internationally—is fraying at the seams.

Every year, American companies in fields as diverse as energy, technology, entertainment and pharmaceuticals lose between $200-$250 billion to counterfeiting and piracy.

That is simply unacceptable.

There are a series of steps the Commerce Department can and will take to improve America’s IP regime, from reforming the U.S. patent office to helping shape upcoming congressional intellectual property legislation.

But fundamentally, our efforts need to begin with better enforcement.

Enforcement of trade agreements is a key element in the plan to rebuild support for trade. We must ensure that U.S. stakeholders reap the full benefits of these agreements, and that our exporters know that we will actively support their efforts. Commerce’s Trade Agreements Compliance Program will play an important role in this monitoring and enforcement work.

There is one final step that must be taken in order to increase the amount of goods and services that America sends to foreign markets: We need to use every lever of the U.S. government to promote open markets and exports.

Whether that involves our Secretary of State writing a letter on behalf of an American company that wants to do business in Mexico, or our Department of Energy helping to facilitate renewable energy partnerships between U.S. and Canadian companies, every federal department has a role to play in promoting American business.

Secretary Locke is the chairman of the administration’s Trade Promotion Coordinating Committee, which includes representatives from over 20 different federal agencies. The secretary plans to bring their full resources to bear for the promotion of U.S. trade.

The trade priorities I have discussed today: visa reform, export controls review, intellectual property protection, intergovernmental cooperation and trade promotion—will help U.S. companies increase exports, while improving opportunities for growth throughout North America.

This administration knows that jobs and growth come not directly from the government, but from government creating a framework that allows the private sector to take risks, and reach across borders to trade and sell and create new opportunities for people to realize their dreams.

And with the federal government fully engaged in promoting American exports and trade, I am confident that our businesses will be able to capitalize on emerging opportunities throughout the hemisphere.

Looming problems from climate change to aging populations demand all the ingenuity that we can muster.

No one country has a monopoly on the knowledge we need, so we must make it easier for our entrepreneurs and innovators to cooperate and collaborate with one another no matter where they live.

That task is a little easier, thanks to the diligent work done by many of the people in this room to bring the U.S., Canada and Mexico closer together.

Thank you.