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U.S. Secretary of Commerce Delivers Remarks at U.S. Conference of Mayors Winter Meeting

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AS PREPARED FOR DELIVERY
Wednesday, January 22, 2014
CONTACT OFFICE OF PUBLIC AFFAIRS
202-482-4883

Thank you, Mayor Smith, Mayor Reed, Mayor Gray, Mayor Cannon, and Bill.  Ambassador Medina-Mora – It’s great to see you again.   I’ve enjoyed working with you.  I look forward to strengthening the already-close ties between our nations.  Also, I am aware that several mayors from Mexico are with us.  Welcome to all of you.  

What an honor it is to be with America’s mayors.  I have met with dozens of you in my first 6 months as Secretary.  Yours is a tough job.  You are at the forefront of our nation’s most pressing issues – from quality education for future generations… to attracting businesses and jobs… to infrastructure investments… to pension reform as you just heard… and so much more.

At the same time, you are on-call 24/7 – for fires, floods, filling potholes… and, yes, snow removal.  I say that because I come from Chicago.

From my perspective as a business leader for 27 years and now as Commerce Secretary, what is most clear to me is this: As a mayor, each of you is on the front lines of our country’s economic growth.  You have helped local employers survive the recession – and you are now helping them grow once again.

Altogether, our businesses have created more than 8 million jobs over the past 4 years, including 2.2 million last year alone.  Also, our GDP has grown for 10 straight quarters… exports are at record highs… and the housing market is coming back in many parts of the country.  

Make no mistake, though: We still have more work to do to create jobs, lift incomes, address inequality, and expand opportunity.  In particular, Congress needs to extend unemployment insurance for millions of people in our communities who are still searching for work.  And, as the President said, we must also raise the federal minimum wage. 

More broadly, I strongly believe that government at the federal and local levels should be teaming up with businesses to provide them with the tools they need to keep growing.  I want to briefly highlight three areas where I think we can partner to make a difference.  Notably, these ideas are all part of our new Open for Business Agenda at the Commerce Department.

First, the Commerce Department has made improving workforce skills and training a top priority – a first for my department.  I have had many conversations with government and business leaders in cities across the country – some here today – who describe the challenge of finding workers with the right skills.

What has become clear – to borrow a great line from my friend, our Labor Secretary Tom Perez – is that we cannot afford to just “train and pray.” 

Simply put, we must align local training efforts with the workforce needs of business in order to create direct paths to good jobs for our citizens.  Local companies and mayors play a crucial role in this effort.  There is no one better suited to bring together all of the key stakeholders – employers, labor, colleges, and others – than those of you in this room.

In particular, you have strong relationships with local business leaders who are the key to successful training partnerships. 

I am particularly encouraged by the ties that are blossoming across America between manufacturers and community colleges, relationships we encouraged in my work with Skills for America’s Future before I became Secretary.

I think we should all do more to support local firms as they step up to help shape curricula at high schools, local colleges, and other training institutions. 

For our part at the Commerce Department, we are pushing to ensure that federal funding for workforce development provides a good return-on-investment.  The President wants us to ensure that these efforts lead to jobs.  In particular, the Commerce Department will put a greater emphasis on supporting local workforce needs through the funding from our Economic Development Administration and our Manufacturing Extension Partnership program.  In addition, the National Advisory Council on Innovation and Entrepreneurship – a group of stakeholders convened by the Commerce Department – will now have a major focus on industry-driven skills partnerships.  That council will be a vehicle to share best practices.

If you already know of a model that works in your region, I hope that you will share it with us… and with other mayors and communities across the country.

My team wants to hear your voice on this issue… because we know that solutions are found at the local level.  You have the answers for ensuring that every American city and town has well-trained workers who will help our businesses innovate, compete, and grow.

My commitment is that – working closely with you – my Department will continue to listen and lead on this issue in close partnership with the departments of Education and Labor.  We must all work together… because a globally competitive city requires a globally competitive workforce.  

A second area where we can work together is manufacturing. My family has been involved in manufacturing for over a half-century.  I know that you – like me – feel a sense of pride in “Made-in-America” as we walk the factory floor of a local manufacturer.

The good news is this: Manufacturers punch above their weight.  For every dollar spent in manufacturing, another $1.48 is added to the economy – the highest multiplier of any sector.  And – based on the latest Commerce Department data – new hires in manufacturing have 38 percent higher earnings than new hires in other sectors. 

The better news is this: American manufacturing is coming back with nearly 600,000 jobs added over the past 4 years.

And the best news is this:  Communities like yours are becoming more and more attractive for manufacturing investments.

A week ago, I was at the Detroit Auto Show and heard about automakers that are ramping up their investments in the United States:

from the Jeep plant in Ohio… to Ford’s increasing investments in Michigan…  to Volkswagen’s plans to invest $7 billion more in North America over the next five years.

More than ever before, global manufacturers are looking to expand in the United States.  There are a number of reasons for this: our rule of law, our intellectual property protections, our stable financial markets, our research institutions, our enormous consumer market, low-cost and abundant energy, access to capital, and most importantly, the ingenuity of our people.

Our Administration is seizing this moment. We are connecting foreign businesses with economic development officials across the country through a program called SelectUSA. This is the first-ever federal effort aimed at attracting foreign direct investment and encouraging reshoring.

SelectUSA has had several success stories.  For example, the team recently helped Rupert, Idaho, attract a 200,000-square-foot food processing plant that will open later this year and create 100 jobs.

On a larger scale, we recently held our first-ever SelectUSA investment summit in Washington, D.C., where over 500 companies from 60 countries met with over 200 economic development officers.  Mayors Brainard, Doyle, Gluba, Jones, and Martinez came.  The feedback has been that the leads from that summit were very ripe, and the return on time invested by mayors and economic development officers was very good.

If you want advice from Commerce employees stationed at a foreign embassy… or if you want high-level advocacy from the Administration when competing with foreign locations for an investment… or if you need someone to help one of your potential investors navigate federal regulations… SelectUSA stands ready to help.  In short, our SelectUSA team serves both as an advocate for your communities… and an ombudsman for potential investors.

At the same time, we want to support all of you who lead bottom-up efforts to develop smart and strategic economic development plans – plans that position your community for that next big investment. That is why I recently met with some of you at the White House to launch a competition that Commerce is leading through our “Investing in Manufacturing Communities Partnership.”

This competition will reward communities that demonstrate best practices in attracting and expanding manufacturing.  We want to support you as you create the best long-term strategies for designing and making investments across many key areas – such as supplier networks, research institutions, infrastructure, and more.

We plan to award up to 12 communities with the official designation of “manufacturing community.”  Among other things, these winners will receive elevated consideration for federal grants totaling $1.3 billion dollars… as well as dedicated liaisons at federal agencies to serve as your concierge to federal services.  The deadline to apply for this competition is March 14. 

Let me emphasize that one of the most valuable aspects of this competition is the process of bringing all of the local stakeholders together to create a comprehensive economic development plan.  As mayors, you can bring together disparate groups in your community to develop a 21st-century plan.   You are uniquely positioned to break down silos and drive the disruptive change in thinking that our country needs now.  I encourage you to embrace this crucial leadership role as we enter this period of opportunity for the United States.

Third and finally, the Commerce Department and City Hall can work more closely together to promote exports.  As you might know, 95 percent of the world’s customers live outside our borders.  Mayor Smith gets it.  He has made exporting his top priority during his term.

Clearly, we have some momentum.  Our data shows that 2013 will likely be a fourth consecutive record-breaking year for U.S. exports.  In November, we hit an all-time monthly record of $195 billion in U.S. exports.  And our trade deficit fell to its lowest point since October 2009.

In addition, export-related jobs pay about 15 percent higher than others – creating greater economic security for the middle class.

However, it is clear to me that exporting should be an even bigger part of the DNA of our business communities.  After all: As a percentage of GDP, we are not doing as well as any of our 20 free trade agreement partners.  Only 40 percent of U.S. companies in tradable sectors are exporting.  And over half of our exporters are only trading with one market. 

Clearly, exporting to more markets is just good business… which is why I am pleased to say that we just launched the “Look South” Initiative.  Today, more than half of America’s free trade agreement partners are in Latin America.  These 11 economies are growing fast, with diverse, young populations – and each has a burgeoning middle class.

These markets are fertile ground for more U.S. exports: Tariffs are low, if they exist at all. Many of these countries have high standards in areas such as intellectual property protection, customs procedures, and government procurement opportunities. Most importantly: Businesses, governments, and consumers in these countries want high-quality goods and services that are Made in America.

I am thrilled to be alongside Ambassador Medina-Mora to say that the first event to support the Look South Initiative will take place in two weeks when 18 businesses will join my team on my very first trade mission – to Mexico City and Monterrey.

Clearly, business opportunities are growing in Mexico due to a number of factors: the leadership of their new Administration, liberalization of key sectors such as telecommunications and energy, and Mexico’s relatively young and fast-growing middle class.  Mexico is a great place for businesses here in the United States to consider as their first international market.

But we want U.S. businesses to look even further South, as well… In May, Commerce will help lead a delegation of hundreds of U.S. businesses to Trade Winds, a massive trade promotion event. This event will be hosted in Colombia, a country where we have seen double-digit growth in U.S. exports since our new agreement went into effect in mid-2012. In Colombia, we will connect our delegation to potential partners and buyers from all of the Look South countries.

The fact is, trade with Latin America is no longer just for companies involved in oil, mining and infrastructure…  We need to get the word out about emerging fields such as medical equipment, IT, safety and security, environmental technologies, franchising, and more.  Notably, these are industries where many of our smaller businesses can be very competitive.

If a business in YOUR community is interested in the latest research on new trends and opportunities in Latin American countries and sectors, please direct them to export.gov/LookSouth.

Already, this initiative has the support of groups like the U.S. Hispanic Chamber of Commerce… as well as corporate supporters like UPS and FedEx.  

And the Look South Initiative also needs the partnership of America’s mayors.  Please use this initiative as a platform for your own export promotion efforts.   Our 100-plus U.S. Export Assistance Centers around the country stand ready to help.

We want to work with you to organize outreach events…  We want to connect your local firms with potential buyers and distributors… We want to share market intelligence tailored to the strengths of your local industries… And we want to certify and support your trade missions.  Let’s partner up and amplify the message to Look South.

One last point on trade. We need to make sure that American businesses and workers have the best possible opportunity to compete on a level playing field.  Our nation cannot afford to stay on the sidelines as trade partnerships grow and flourish throughout the world.  And we canNOT let others set all of the rules for 21st-century trade.

Right now, the United States, Mexico, Chile, Peru, and 8 other countries are in the late stages of negotiations on the Trans Pacific Partnership.  This agreement will be crucial to high-standard, 21st century trade in one of the most dynamic regions of the world.

From the U.S. perspective, once negotiations are complete, this trade agreement must be approved by Congress. 

The first step in that process is passing Trade Promotion Authority. This legislation allows Congress to assert its role in trade negotiations, guiding the overall objectives of U.S. negotiators.  Once Trade Promotion Authority is approved, we are one step closer to expanding market access, ensuring a level playing field for exporters, and supporting more good-paying jobs across the country.

I encourage all of you here today to make your voice heard on this important issue.  I believe strongly that U.S. firms and workers are ready to compete and to meet the growing demand for Made-in-America products and services around the world. 

Mayor Smith, and mayors of America, my commitment to you is this.  The Department of Commerce – and this Administration – will serve as your partner.  We will be responsive and outcomes-driven because we know that you demand nothing less in City Hall.

I will leave you with a quote.  On Monday, we observed Martin Luther King Junior Day.  I joined with a dozen Commerce employees at a local nonprofit that provides food delivery for those living with AIDS, cancer, and other illnesses.  One of Martin Luther King’s famous quotes is this: “Life’s most persistent and urgent question is: ‘What are you doing for others?’”

As mayors of our great nation, you have dedicated your lives to answering that question.

I look forward to working with you to help create the conditions for your communities to thrive.  Let’s send a clear message throughout the world that America’s cities and towns are open for business. Thank you.