U.S. Commerce Secretary Carlos M. Gutierrez
United States Hispanic Chamber of Commerce Wednesday, April 20, 2005
Washington , D.C.

(Remarks As Prepared for Delivery)

As champions of the private sector from around the country, you know very well that our national destiny is tied to free trade. The Hispanic Chamber has been a powerful voice for entrepreneurship and opportunity. The American Dream is the hope of ownership. Under the President’s policies, Hispanics are increasingly achieving success in both business and homeownership. The climate of opportunity is alive.

We have over 2 million Hispanic small business owners in this country. And the President’s tax cuts gave the average Hispanic small business owner over $3,000 in tax relief last year. You’ve been strong supporters of international trade and a powerful ally for everyone working to build a brighter future of open markets and shared prosperity.

Preserving opportunity for American small business owners and entrepreneurs requires open markets for U.S. goods and services. Your support for CAFTA is welcome and appreciated.

Thank you for your vision, your consistency, and your passion on this issue. Your contributions have helped America become a more open and stronger country. Thank you for all that you’ve done.

America is the world’s most dynamic economy largely because we are the country most deeply committed to the principles of free trade. Trade frictions between the early colonists and the English Parliament pushed our Founding Fathers toward independence. We have never accepted limits on our commerce.

While there have been setbacks from time to time, Americans have traditionally looked outward to embrace a vision of economic engagement.

We are a country of explorers and travelers and traders. Americans don’t gaze out to sea and fear competition coming ashore. Americans look abroad and dream of new opportunities. For that reason, free-market forces govern our economy. No country is more open. No country stands to gain more from a global trading system that drops barriers to competition. In a fair contest, America will always come out on top.

The world has many developed market economies but none of them are growing as fast as the United States. We are expanding at double the rate of most of our trading partners. Last year, our economy grew at 4.4 percent. Compare that to 2 percent for the EU, 2.7 percent for Japan, and 3 percent for Canada.

We didn’t achieve growth like that by shying away from competition or putting up walls—it’s not in our nature. There is no other major economy in the world that is as vibrant as the United States. Why do we place such a high value on growth?

There is simply no substitute for growth. Growth gives us options. Growth gives us the opportunity to do more of the things we all want for our society. Growth creates jobs.

Growth raises our productivity and our standard of living. And without strong economic growth, countries lack the resources to build strong civil societies.

This is a vibrant, growing, and prosperous economy. Unemployment is at 5.2 percent. This is lower than the averages we’ve seen in any of the last three decades. We have this wonderful combination of high growth, declining unemployment and a low inflation rate. And it’s rare to have those three powerful trends come together.

The challenge is to keep that going. We need an environment that encourages innovation and promotes risk taking. We have a rare opportunity to plant the seeds of far stronger growth within some important allies in Central America.

One of our highest trade priorities is to put the Free Trade Agreement with Central America and the Dominican Republic to work strengthening our hemisphere. There’s compelling economic logic behind this agreement. Simply put, CAFTA means jobs for American workers.

We already have free trade with Central America. But it’s one-way free trade. 80 percent of the imports from Central America already come into the U.S. duty free. CAFTA levels the relationship, giving American domestic companies broader access to this valuable market. It would create the second-largest U.S. export market in Latin America.

The CAFTA market is already a larger export market than India, Russia, and Indonesia combined. We already trade more with Central America and the Dominican Republic than we do with Australia ... and more than we trade with Brazil.

The U.S. Chamber of Commerce predicts that U.S. sales to the region could expand by more than $3 billion in the first year. The American Farm Bureau estimates that U.S. farm exports could grow by $1.5 billion a year.

Many manufacturers would benefit: information technology, farm and construction equipment, paper products, medical and scientific equipment, and pharmaceuticals.

CAFTA strengthens business relationships and competitive sourcing within our hemisphere. Many Central American producers use U.S. parts and materials. It’s important to preserve the working relationships between U.S. producers and their customers in Central America.

What would it say about the prospects for global free trade if we didn’t meet the challenge in our own hemisphere?

The strategic logic of CAFTA is overwhelming. This vote, to adopt CAFTA, is an important step in the advance of economic freedom. As we all know the Central America of the past was very different. The region was often at war. Many Central Americans lived under dictatorships and military regimes.

Then, some very brave and committed people—leaders—turned the tide toward freedom, free-market principles, and the rule of law. Today, as a result, there are peace agreements and democratically elected governments. And there have been sustained periods of economic growth.

The people of Central America see CAFTA as more than a trade agreement. It is the foundation of a lasting partnership. CAFTA can bring stability. It will lock-in regional commitments to the foundations of self-government: Respect for human rights, the rule of law, property rights, and access to capital.

CAFTA is the partnership that will help these countries on the road to prosperity. We can accelerate the trend toward economic, political, and social reform. However, regional progress is not guaranteed. There are still forces opposed to democratic government and economic freedom.

Central America is broadly embracing the principles of self-government and the rule of law that are responsible for stability and prosperity in the United States . Here’s the question. How can America do anything less than stand with our brave friends in Central America ? These young democracies are fragile and they need our support.

And there’s a long-term benefit to this agreement. With regional economic consolidations taking place in Europe and Asia, CAFTA has the potential to further integrate the western hemisphere so that we can better compete in other markets around the world.

President Bush has other priorities on the trade front. We look forward to completing the Doha Round of trade negotiations. We’re looking for progress on market access for services. Some of our most competitive companies are frozen out of promising markets by exclusionary rules. We’re working to reduce trade barriers. Trade negotiations have already taken an $8.3 billion cost disadvantageoff the backs of American workers and American farmers. We’ll continue dismantling tariff and non-tariff barriers.

President Bush has shown that we will confront trading partners who fail to live up to the terms of our trading agreements. We will lay down the law if trading partners game the system. An innovation-driven economy like the United States must be especially wary and active to counter the threat posed by the theft of intellectual property. We need to stop intellectual property rights piracy.

As all of you know, many of the challenges posed by the global economy are difficult. The President has a bold, free trade agenda. Accomplishing these goals won’t be easy. But, as I learned during my first cabinet meeting, President Bush isn’t serving to play as he calls it: “small ball.” He’s here to confront the big challenges on the horizon.

This country has been through a lot over the last four years and we’re poised to do amazing things in the years ahead thanks to people like all of you.

Thank you for listening. Now, I’d like to hear from you.

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