Posted at 1:25 PM
Today, U.S. Secretary of Commerce Penny Pritzker delivered keynote remarks at the Progressive Policy Institute’s (PPI) event on the Trans-Pacific Partnership (TPP). The program highlighted key issues raised in PPI’s new report, “A Big Deal for Small Business: Seven Stories of How the Trans-Pacific Partnership Would Boost America’s Small Exporters.”
In her remarks, Secretary Pritzker underscored the economic benefits of TPP, particularly for small and mid-sized businesses, through export-driven growth. Additionally, she emphasized that TPP will make the United States stronger abroad, knitting the country closer together with its allies and enhancing security and stability across the entire Asia-Pacific. Secretary Pritzker stressed the urgent need to pass the agreement this year, and that the time is now for the pro-trade community to make its voice heard.
Remarks as Prepared for Delivery
Thank you, Congressman Beyer, for the kind introduction. I loved walking the exhibition floor with you at the SelectUSA Summit earlier this year and hearing about all of the amazing investment opportunities in Northern Virginia. Please send my best to Megan.
I would also like to recognize the Progressive Policy Institute for planning today’s event and recently releasing a report that highlights the benefits the Trans-Pacific Partnership would create for small businesses. It is fitting that we gather today in a building named after Sam Rayburn, who served as Speaker of the House during World War II. He oversaw the House during a period of isolationism, when many members of Congress thought the United States should cut itself off from the world.
The Speaker disagreed. He argued with his colleagues that our country could not afford to ignore what was happening in Europe – eventually changing enough minds to pass the Lend-Lease Act and the Marshall Plan. Imagine what the world would look like without those two pivotal pieces of legislation that helped lay the groundwork for peace and rebuilding in the wake of World War II.
Today, although we live in a very different time, the United States is once again called to choose between retreating into isolationism or embracing our position and influence in the world. The choice is clear: We must choose engagement over isolationism. We must choose prosperity over protectionism. We must choose the Trans-Pacific Partnership.
Today, I want to tell you why TPP is good for our economy, good for our standing in the world, and good for our national security. As large and diverse as our country is, we still only account for five percent of the global population. Ninety-five percent of the world’s consumers live outside our borders, and 80 percent of the world’s purchasing power is outside the United States. But too often, American companies lack equal access to foreign markets and confront significant barriers to entry.
For example, automotive goods face a 70 percent tariff in Vietnam. Machinery and capital equipment face a 59 percent tariff in Malaysia. And poultry faces a 40 percent tariff in Japan. On day one, TPP will eliminate 98 percent of these tariffs. In effect, this means that 18,000 tariffs, which are like taxes on many of the products and services American companies create, will be gone immediately.
By linking the U.S. with some of the fastest growing countries across the Asia-Pacific, we will strengthen existing supply chains and build new ones across a region that comprises nearly 40 percent of global GDP.
TPP will help small businesses grow by reducing red tape and costly export delays.
As the trade agreement with the most extensive protections for the digital economy, TPP will prohibit tariffs on digital products, promote the use of electronic signatures in e-commerce transactions, and help ensure the free flow of data across borders – all of which are critical to small businesses that rely on the Internet to access new markets and sell their goods.
Consider the impact of TPP on Auburn Leather Company, which has manufactured its leather products in Auburn, Kentucky for over 150 years. Over the last twenty years, they have grown from just 12 employees to 110 men and women, who today make one million leather shoelaces a week. How did they get there? By exporting their products around the world. With annual export sales of $14 and a half million dollars, Auburn Leather ships their products to 29 countries – including TPP partners Vietnam, Japan, and Mexico. These exports directly support 86 of the company’s 110 employees.
Yet in several TPP markets, the company faces tariffs as high as 20 percent, hurting sales and limiting job growth in America. TPP would immediately eliminate those tariffs and level the playing field for small businesses like Auburn Leather, so that they can compete in the fastest growing region in the world.
But before we can unlock the benefits of TPP, we need the agreement signed into law. And we need it done now – because our competition is not standing still.
Since 2000, other countries have passed nearly 100 new trade deals in the Asia-Pacific region - and many of them disadvantage our companies and workers. Indeed, because TPP partners like New Zealand, Vietnam, and Malaysia already have trade agreements with China, American exporters today have to pay the full tariff rates that their Chinese competitors do not.
The United States has long been a leader in the Asia-Pacific.
Many of our TPP partners continue to not only welcome but rely on a strong U.S. presence for everything from keeping the seas open for trade to protecting their territorial integrity to supporting closer economic integration. If we cannot cross the finish line with TPP, the 11 other countries who negotiated with us – and, in many cases, made great sacrifices to reach this agreement – will be forced to re-think that faith in U.S. leadership.
Let me be clear: this is not mere speculation.
Whether it is Prime Minister Key of New Zealand, Prime Minister Lee of Singapore, Prime Minister Abe of Japan, or any of a number of other officials, our TPP partners have made it clear that U.S. failure to follow through on TPP will require them to hedge their bets and consider closer relations with others in the region. Our country cannot afford to miss this opportunity to secure our influence in the Asia-Pacific and ensure American businesses can compete.
TPP will also make our country stronger abroad, knitting us closer together with our allies and enhancing security and stability across the entire Asia-Pacific. Secretary of Defense Ash Carter put it best when he said, “Passing TPP is as important to me as another aircraft carrier.”
Since the end of World War II, U.S. leadership in international trade has helped usher in an era of peace and prosperity. We believe in the values of openness and fairness, and the Asia-Pacific has increasingly embraced those values. Furthermore, TPP can combat the threat of violent extremism by creating opportunity where there is poverty. Through this agreement, we are laying the foundation for peace and progress toward democratic ideals.
The benefits of TPP – for our economy, for our standing in the world, and for our national security – are clear. But a trade deal is only as good as its enforcement.
At the Department of Commerce, we are fully committed to enforcing U.S. trade laws and ensuring that our partners comply with their obligations under the World Trade Organization and our free trade agreements – including the Trans-Pacific Partnership. We are cracking down on companies and countries that don't play by the rules in record numbers. Currently, we are enforcing 350 anti-dumping and countervailing duty cases – a 15 year high. Once implemented, we intend to strongly enforce the new trade rules laid out in TPP – just as we have with past trade agreements.
Simply put: TPP will allow us to shape the rules of the global economy to advance our economic strengths and our values while protecting American companies from unfair trade. We must not let this opportunity pass us by.
If we are going to cross the finish line on TPP, we need you as our partners, making the case for trade in your communities, in your states, and nationwide. I urge you today to reach out to your friends, your family, your neighbors, and make your voices heard. Tell them how TPP will grow U.S. businesses and how that will translate into more jobs for American workers, more customers for American companies, and more growth for our economy.
The world is depending on us.
With the heated rhetoric around TPP louder than ever, the time is now to secure high-standard trade agreements that reflect our interests and our values, ensure our workers can compete on a level playing field, and maintain American leadership in the 21st century global economy. Thank you.