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Remarks at America's Business Forum, UCLA, Los Angeles, California

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AS PREPARED FOR DELIVERY

Wednesday, March 3, 2010

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Deputy Secretary of Commerce Dennis F. Hightower
Remarks at America’s Business Forum, UCLA
Los Angeles, California

Good morning.

Thank you, Mayor Villaraigosa, for your kind words, and thank you Dean Olian, for inviting me to UCLA to speak.

Let me recognize both Gary Toebben [toe-bin] and Carlos Valderrama for all of their hard work putting this conference together and for all of their work at the Los Angeles Area Chamber of Commerce.

And congratulations to the Anderson School of Management for turning 75 this year.

When UCLA’s business school first opened its doors three quarters of a century ago, the American economy was mired in the Great Depression.

Debate raged in the halls of Congress and around the country about how best to turn the American economy around.

Unfortunately, trade policy was not as sophisticated as it is today.

Instead of engaging our neighbors and the world, the United States tried to turn our economy around by closing our borders to trade and looking inward.

We all know how that turned out.

Today, even as we dig out from the worst economic downturn since the 1930s, we cannot repeat past mistakes.

We now know that robust foreign trade won’t harm the American economy. Instead, it is key to its recovery.

And that is why this Second Annual Americas Business Forum is so important.

All of us have to do more to ensure more American products are reaching new foreign markets.

At a time when traditional drivers of U.S. economic growth like consumer and business spending are strained, we simply must elevate exports as a key part of our economic recovery efforts.

The Americas Business Forum serves as a critical tool in helping connect small and medium sized businesses in Southern California to market opportunities around the Western Hemisphere.

When more people want to purchase U.S.-made products, it creates a virtuous demand cycle that leads to new job growth right here in America.

And that’s a critical step to getting the American economy back to full recovery.

Even amid the last decade’s speculative mania, exports have remained an integral part of our economy. Last year, they accounted for 11 percent of our GDP, which is almost three times as much as just 50 years ago.

And exports support nearly 10 million jobs in America.

California companies already send significant exports across our North and South borders.

Last year, California exported nearly $32 billion of merchandise to Canada and $4.5 billion of merchandise to South America. Additionally, firms in California sent $981 million of merchandise to Central America.

These numbers show trade within the Western Hemisphere is already robust.

But we can—and we must—do much better.

While the U.S. is a major exporter, we are underperforming.

U.S. exports as a percentage of GDP are still well below nearly all of our major economic competitors.

Today, less than one percent of America’s 30 million companies export—a percentage that is also significantly lower than all other developed countries. And of U.S. companies that do export, 58 percent export to only one country.

With our increasingly interconnected world—where 95 percent of consumers reside outside our borders—these are opportunities the United States cannot afford to miss.

That’s why, in his State of the Union Address in January, the president announced a new National Export Initiative, which aims to double American exports over the next five years and support two million jobs at home.

There have been, of course, been previous endeavors by the government to elevate the importance of exports.

But what sets this effort apart is that this is the first time the United States will have a government-wide export-promotion strategy with focused attention from the president and his cabinet.

And this trade strategy to help all businesses focuses on three key areas:

  • improving government trade promotion in all its forms;
  • expanding export credit to businesses—especially small- and medium-sized ones; and
  • increasing the government's focus on knocking down barriers that prevent U.S. companies from getting free and open access to foreign markets.

To expand exports into new markets, businesses are going to need to produce more of what they already make. And this means businesses will need better access to credit.

Although our financial system has weathered the crisis of 2009, lending is still restricted, especially for small businesses.

As part of the National Export Initiative, the president has called upon the Export-Import Bank—which provides critical financing to U.S. companies when private banks are unwilling or unable—to increase its financing available for small and medium-size businesses from $4 billion to $6 billion over the next year.

But gaining access to more credit is only the first step.

Making sure more markets are available to more American businesses is also critical.

The NEI is also going to increase the government's focus on knocking down barriers that prevent U.S. companies from getting free and fair access to foreign markets.

That includes more rigorous enforcement of international trade laws, combating unfair tariff and non-tariff barriers and cracking down on practices that blatantly harm U.S. companies, like the theft of our intellectual property.

That leads me to the third plank of the NEI, which I know will be of great interest to all of you—and that is the U.S. government increasing its trade promotion efforts in all its forms.

Many American companies don't export, or export less than they should, because they simply don't have the resources to identify promising new markets or the necessary contacts in foreign countries.

And this is where the Commerce Department’s International Trade Administration (or ITA) will be escalating its already substantial efforts.

ITA has a global network of trade specialists posted in 109 U.S. cities and at 128 U.S. embassies and consulates in 77 countries.

As part of the NEI, the president’s 2011 budget gives ITA an additional $80 million to expand its efforts.

With that, ITA plans to bring on as many as 328 trade experts to serve as advocates for U.S. companies, allowing its Commercial Service to assist more than 23,000 clients to begin or grow their export sales in 2011.

The budget also will allow ITA to:

  • Put a special focus on increasing the number of small and medium-sized businesses exporting to more than one market by 50 percent over the next five years.
  • Increase their presence in emerging high-growth markets like China, India and Brazil;
  • And develop a comprehensive strategy to identify market opportunities in fast-growing sectors like environmental goods and services, renewable energy, healthcare and biotechnology

But ITA isn’t waiting until 2011 to step on the gas.

In the next month, they are set to launch a 12-month program to help create jobs in America by identifying:

  • new markets for existing U.S. exporters;
  • increasing the number of foreign buyers to U.S. trade shows;
  • working with private sector partners to encourage more exporting through our market development cooperator grant program;
  • and trying to get more clean energy companies involved in promising new markets.

ITA also will be putting more emphasis on programs that have a track record of success. . . .like their Gold Key Matching Service, which leverages the talents of our commercial service staff to help American business find foreign buyers and distributors.

If you’re an American firm and you want to sell your goods or services abroad, all you need to do is pick up the phone and call 1-800- USA-TRADE.

Commerce Department experts will then:

  • Conduct an international partner search to find potential agents, distributors or other strategic partners for your unique business;
  • They will contact potential overseas business partners to identify companies that could be right for you;
  • And they will work with you to design and implement a market entry or expansion strategy and assign a single point of contact to provide long-term, focused support to help you succeed.

Think of it as match-making for exporters. We'll keep searching for partners and customers for you until you find the right fit.

Gold Key is just one of the many services offered by the International Trade Administration—and like many of ITA’s efforts, they are going to be focused on the small- and medium-size businesses that represent the biggest source of untapped export potential in the United States.

Last year, ITA helped nearly 5,600 companies increase their exports and 85 percent of those were small and medium-size businesses.

And there is no reason why every business that is here today cannot be another business that successfully uses the Commerce Department to access new foreign markets.

The Department of Commerce is here to do everything in our power to help you export your goods and services.

It is why 14 Senior Commercial Officers who work in countries in the Western Hemisphere are here today at this conference. They are here to answer your questions and to work with you if you want to export to the countries where they are stationed.

I urge everyone to attend the country briefing sessions that are scheduled for today and tomorrow.

Use our experts and our expertise. Because when small and medium sized businesses do well, America does well. And that’s important to all of us.

Thank you.