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Remarks at the National District Export Council Conference

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Wednesday, November 4, 2009

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Secretary of Commerce Gary Locke
Remarks at the National District Export Council Conference
Washington, D.C.

Hello everyone and welcome to Washington, DC.

I believe we have members from nearly 75 percent of the District Export Councils from across the country represented here today. This is a testament to your commitment to your local communities and to your relationship with the Department of Commerce.

You have been a vital resource to American exporters for well over 30 years, and an indispensable ally for our Commercial Service team.

And as this country emerges from the worst recession in generations, we will need your expertise, your contacts and your export advocacy in your communities more than ever.

Exports are already a growing and substantial part of the U.S. economy. They account for almost 13 percent of our GDP, almost three times as high as it was in the 1950s.

And exports account for over six million manufacturing jobs alone.

But this administration understands these numbers must grow even more.

And, with your help, they can. Our nation has tremendous potential to create and sell more products and services to foreign markets.

This is not as easy as it sounds. In these difficult economic times, there are voices here at home and abroad joining the chorus of protectionism.

History has already rendered its verdict on the utility of turning inward and closing off markets.

These measures do not work and they reduce living standards for us all.

I want everyone here this afternoon to know that the United States is one of the most open economies in the world, and that’s not going to change. Our borders will remain open for the world’s products.

But that commitment will be met by a renewed focus on doing more to ensure the competitiveness of U.S. companies in foreign markets.

And we're depending on District Export Council members to be a valuable partner in that effort.

Today, I'd like to talk about some key strategies the Commerce Department is pursuing to revitalize American exports.

But first, I'd like to briefly address an issue that is on all of our minds: the H1N1 Flu.

On October 23, President Obama declared H1N1 as a national emergency.

I know many, especially those in the travel and tourism industries, are worried about the effect this declaration will have on the flow of people, goods and services across borders.

So, let me be clear: the president's declaration is a precautionary measure to ensure that, if needed, the Secretary of Health and Human Services can waive certain standard federal requirements to help U.S. health care facilities deal with the 2009 H1N1 influenza.

This measure does not represent any change in status of H1N1 in our country—and the president’s action did not result from an assessment of the danger the flu poses to the public.

H1N1 continues to be a relatively mild form of flu for most people compared to the impact of the annual seasonal flu, and it continues to be safe to travel to and within this country, which is why no travel restrictions to or from the United States exist.

America remains open for business, and now, I'd like to discuss with you how the Commerce Department intends to keep it that way.

I've identified five key strategies to pursue in the months and years ahead.

The first element of my agenda is to ramp up the Department of Commerce’s trade promotion activities across the globe.

Right now, U.S. companies aren’t anywhere near maximizing their export potential.

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

We can do a lot better.

With our increasingly interconnected world—where 95 percent of consumers reside outside our borders—global markets can help revive the fortunes of U.S. companies and spur future economic growth.

And Commerce also has a lot of untapped potential in a trade promotion office staffed with some 1,500 people in 77 countries and here at home, including commercial service officers who go out every day to find new customers for American businesses in foreign countries.

My goal is to get more companies engaged with our commercial service corps. I will be relying heavily on National District Export Council members to continue doing their great work as we pursue this goal.

As Commerce seeks 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.

That's why business visa reform is my second trade priority.

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.

For example, the Association of Equipment Manufacturer Executives has reported that its members lose one in three Chinese buyers invited to attend major U.S. trade shows because their visas are denied—even though many of them have previously visited the United States on buying missions without incident.

And Boeing recently had to delay the delivery of a $250 million freighter because an inspector from the Chinese aviation authority didn't receive his visa on time.

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

The U.S. government has already made some tentative progress on improving the situation, but I have also created a departmental task force that will keep national security paramount while working to further improve the business visa process.

Yet another area where red tape is challenging American businesses, and American security, is our export control system—which governs trade in defense and military items, as well as the dual-use products that are designed for civilian purposes but often have military applications.

Our current export control system was designed in the 1950s to prevent sensitive technologies from falling into the hands of adversarial nations that were relatively easy to identify.

Today, old adversaries are now some of our most significant trading partners.

Our global economy is far larger and more integrated, and nations’ economic and security interests are more nuanced.

But our export control system has not kept up.

As a result, we now face a situation where U.S. companies are being shut out of promising markets and promising partnerships with foreign companies, even when they are close allies.

Let me read you a troubling quote from Charles Edelstenne, the president of the Aerospace and Defense Industries Association of Europe. He said:

The only way to resolve technology access and U.S. Government export restrictions is by "not including any U.S.-sourced technology in our products."

It has reached a point where the undeniable appeal of U.S. technology is often outweighed by the time and effort foreign companies must endure to obtain it.

This is a serious problem that compromises U.S. security and damages our economic competitiveness.

And that conclusion is shared by many. Earlier this year Brent Scowcroft, former National Security Adviser to President George H.W. Bush, co-chaired a distinguished panel at the National Academy of Sciences to look into this issue, and they flatly declared:

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

That is why in August, President Obama called for a broad-based interagency review of the U.S. export controls system.

In the meantime, I have asked the Commerce Department's Bureau of Industry and Security—which has jurisdiction over dual use export controls—to immediately explore pursuing two reforms:

  • One: Eliminating dual-use export license requirements for allies and partner nations; and
  • Two: Implementing a fast-track procedure for the review of dual-use export licenses for other countries that do not pose a significant proliferation concern.

These two reforms could affect more than half of the 20,000 licenses Commerce issues each year. But our reform efforts should not stop there.

In short, we need to reallocate resources to focus more targeted controls on highly sensitive item—and to reduce controls elsewhere where they serve no useful security purpose and make no sense.

These reforms could have an immediate and positive impact for American economic competitiveness while strengthening U.S. national security, and I urge all of you to stay engaged in this issue in the months ahead.

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 protect their interests.

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 our exports.

Whether that involves our State Department writing a letter on behalf of an American company that wants to do business in Russia, or our Department of Energy helping to facilitate renewable energy partnerships between US companies and the Chinese government, every federal department has a role to play in promoting American business.

A few weeks ago, I chaired the first Trade Promotion Coordinating Committee (TPCC) meeting of the Obama administration—which brought together 20 federal agencies and departments to develop a government-wide strategy for expanding trade and promoting American exports.

This effort will ultimately create good-paying American jobs.

It was a very productive meeting and we established working groups on a lot of critical issues like:

  • increasing exports for small and medium-size businesses;
  • expanding access to emerging markets;
  • capitalizing on promising new industries like clean energy; and
  • improving our advocacy abroad to make sure our companies aren't subjected to unfair competitive practices.

We will be meeting frequently in the months ahead to make sure we are making concrete progress in all of these areas.

The trade priorities I’ve discussed today—business visa and export controls reform, intellectual property protection, intergovernmental cooperation and trade promotion—will help U.S. companies increase exports, while setting the country on a path to long-term, sustainable growth that creates jobs here at home.

And with the federal government fully engaged in promoting American exports and trade—and working side-by-side with the National District Export Council—I am confident that our businesses will be able to capitalize on emerging opportunities across the globe.

That task is a little easier thanks to the Council and its members. Thank you for having me, and again congratulations on over 30 years of great work.