trade, investment, and the need for global fluency in america's business communities

8/10/2019 Trade, Investment, And the Need for Global Fluency in America's Business Communities

1/6

5/8/14 10:3rade, Investment, and the Need for Global Fluency in America's Business Communities at the Los Angeles World Affairs Council

Page ttp://www.commerce.gov/print/news/secretary-speeches/2014/01/09/trade-investment-and-need-global-fluency-americas-business-commun

Published onDepartment of Commerce(http://www.commerce.gov)

Trade, Investment, and the Need for Global Fluency in America's

Business Communities at the Los Angeles World Affairs Council

Submitted on January 9, 2014 - 3:45pm

Categories: Secretary Speeches[1] Look South[2] International Trade Administration[3] Office of t

Secretary[4] Secretary of Commerce Penny Pritzker[5]

AS PREPARED FOR DELIVERY

Thursday, January 9, 2014

CONTACT OFFICE OF PUBLIC AFFAIRS

202-482-4883

Commerce Secretary Penny Pritzker

Trade, Investment, and the Need for Global Fluency in America's Business Communities at the Los

Angeles World Affairs Council

Thank you, Terry.

It is wonderful to be here in Los Angeles, a city that is a gateway to the world. And I am very pleased to be here with all o

you from the World Affairs Council, an organization with a proud legacy of facilitating meaningful conversation and acti

around critical global issues.

Many think of me as a Chicago native, but what most don't know is that I actually grew up in California. I came of age he

as this state asserted itself, not only domestically but also on the international stage. From trade to financial services to

innovation to entertainment and much more, Los Angeles has helped shape how our nations culture and our values are

perceived abroad.

Today, it seems fitting for me to be back in California now as Secretary of Commerce to start a national conversationon the need for greater global fluency in Americas business communities. What that means is helping Americas

companies take full advantage of the opportunities to do business all over the world.

At the Department of Commerce, we just launched a new strategic vision we call it our Open for Business Agenda. W

are prioritizing trade and investment as the first pillar of this agenda. And that is what I am here to talk about today,

because of the critical importance that trade and investment play in the nation and this region in particular.

Los Angeles is one of Americas top three export hubs. And a headline from The LA Times just yesterday reported that
http://www.commerce.gov/category/bureaus-and-offices/office-secretaryhttp://www.commerce.gov/officials/secretary-commerce-penny-pritzkerhttp://www.commerce.gov/category/bureaus-and-offices/office-secretaryhttp://www.commerce.gov/category/bureaus-and-offices/international-trade-administrationhttp://www.commerce.gov/category/tags/look-southhttp://www.commerce.gov/category/news-type/secretary-speecheshttp://www.commerce.gov/


2/6



California exports have jumped to pre-recession levels due to a strong performance in November.

At the national level, exports have jumped by more than $600 billion since 2009 to $2.2 trillion in 2012. It looks like we

will hit yet another record for 2013. Also, the Commerce Department announced this week that our trade deficit hit a 4-

year low in November.

The Presidents National Export Initiative has raised awareness about the fact that 95 percent of the worlds customers a

outside our borders. We have worked to train and empower many businesses to become exporters. But let me be clear

Leaders like you are responsible for this progress.

As a result of all of our efforts, U.S. exports have risen to account for roughly 13.5 percent of our GDP.

Yet vast opportunities remain. While our exports are reaching record-high dollar levels, as a percentage of GDP we are n

doing as well as any of our 20 free trade agreement partners. And only 40 percent of U.S. companies in tradable sectors

actually exporting.

Simply put, trade and investment must become an even bigger part of the DNA of our economy.

We need more stories like Louroe Electronics. Their CEO, Richard Brent, is here with us today. Louroe is a small

manufacturer with about 25 employees, and they make specialized audio equipment and microphones for hospitals, polistations, and university labs.

A few years ago, they were exporting $80,000 in goods per year to Mexico. But Richard knew they could do MUCH mo

and he called the Commerce Departments Export Assistance Center here in Los Angeles.

Our international trade specialists worked with the Louroe team to research the potential demand for their products in

Mexico. Then, we identified potential customers in country and set up appointments for Louroe executives to meet with

them. As a result, Louroes sales to Mexico quickly grew to more than $1 million. In fact, they recently secured financin

to expand their business in Central America. Lets congratulate Richard and his team.

All over Los Angeles and all over this country, we have the potential to foster more success stories like this.

Let me be clear: if you are an American business, the time is now to consider selling your product or service abroad.

With that in mind, heres what I want to focus on today: First, I want to talk about one region of the world where we can

and should be boosting our exports right now. Second, I want to highlight how the Commerce Department serves as a

partner to businesses all over the country as they look to sell their goods and services abroad.

Today, more than half of Americas free trade agreement partners are in Latin America. These 11 economies are fast

growing, with diverse industries, 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 are

developing high standards in areas such as intellectual property protection, customs procedures, and openness in

government procurement. Most importantly: Businesses, governments, and consumers in these countries want the high

quality goods and services that our companies offer. These considerations are vitally important to U.S. firms looking to

business abroad.

Today, we are announcing a new effort led by our International Trade Administration We call it the Look South

Initiative. The Look South Initiative will help businesses across the United States explore Latin Americas markets, learn

about emerging opportunities, and tap into federal programs that can help companies sell more products into the region


3/6



expanding their bottom line.

With 58 percent of U.S. companies exporting to only one market, usually Canada or Mexico, Look South will help

companies understand why exporting to more markets is just good business.

While the typical business that sells to just one market generates roughly $375,000 in export sales, companies with 2-4

export markets have average export sales of $1 million dollars: And those who export to 5-9 markets average $3 million

export sales.

The first major event of this initiative will take place next month when Louroe and 17 other businesses will join me and t

Department of Commerce team on my very first trade mission which will take us to Mexico. As you know, the NAFTA

agreement is now 20 years old. Over that period, trade with both Mexico and Canada has increased dramatically. And o

supply chains along the border have become inextricably linked. Put simply, we make things together with goods and

components crossing our borders often three or four times before a product is finished.

I am very involved in developing the next phase in our relationship with Mexico through efforts like our new High-Level

Economic Dialogue, which was launched last fall by Vice President Biden during a trip we took together to Mexico City.

The Vice President continues to lead the Administrations efforts today in this critical work. Clearly, business

opportunities are growing in Mexico due to a number of factors: the leadership of their new Administration, liberalizatioof key sectors such as telecommunications and energy, and Mexicos relatively young and fast-growing middle class.

Mexico is a great place for any American company to consider as their first international market. And if you are already

active in Mexico, we want to help you look even further south.

That is why, in May, Commerce will help lead a delegation of hundreds of U.S. businesses to Trade Winds, a massive trad

promotion event. This event will be hosted in Colombia, a country where we have already seen double-digit growth in

exports since our new trade 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. This endeavor will also make stops in Peru, Chile, an

Panama. You can find more information on this initiative atwww.export.gov/looksouth[6].

I encourage you to bookmark that website for another reason: Our experts are taking a fresh look at emerging trends anopportunities for U.S. businesses in Latin America. And they are posting country-specific and sector-specific research on

that site.

For example, many of you already know about the vast opportunities available in oil, mining, and infrastructure. But we

are also seeing a new set of opportunities in industries such as medical equipment, information technology, safety and

security equipment, environmental technologies, franchising, and more. Notably, these are industries where many of ou

small and medium-sized businesses are very competitive.

One last crucial point on Look South -- We need business leaders like you to partner with us.

We need you to take a second look at your position in these markets to ensure that you are taking full advantage of freetrade. If you are already well established in the region, we need you to look at your partners and business-customers wh

could follow in your footsteps. In addition, we need your help to reach out to other local groups and chambers whose

members might just need a little bit of training in order to break into these markets. I am pleased to say that the U.S.

Hispanic Chamber of Commerce and the Association of American Chambers of Commerce in Latin America are stepping

up. We would also like to see companies organizing events, conducting outreach, and contributing in their own unique

ways. For example, both UPS and FedEx are supporting Look South. Finally, we must work together to cultivate even

more advocates to spread the Look South message particularly local and state government officials in border cities an
http://www.export.gov/looksouth


4/6



states. If you have additional ideas for how to make this effort a success, please don't hesitate to reach out to Mike

Masserman, whos here with us today and leads our trade promotion efforts.

There are many more steps that we must take to create the conditions for you to compete and succeed on the global stage

Let me give three examples.

First, we need to push forward with two major trade agreements that will open up vast new opportunities for American

businesses.

Right now, we are working to conclude negotiations with 11 other countries, including key Look South markets, on the

Trans Pacific Partnership. Here in California, the benefits of TPP will be significant. Nearly half of Californias goods

exports more than $60 billion worth go to TPP countries. And this agreement should help us sell even more

California-made goods and services, and to move them across the Pacific.

At the same time, we are moving forward with talks on a free trade agreement with the European Union the

Transatlantic Trade and Investment Partnership. T-TIP is crucial for lowering both tariff and nontariff barriers to trade

Together, the TPP and T-TIP will cover more than 60 percent of global GDP. Our businesses need to start preparing

right now for the unprecedented opportunities that will flow from these two agreements. I am sure that some of you adoing just that. Not only do businesses need to start preparing for these agreements, we also have to provide sufficient

training for our workers to succeed in an increasingly global economy.

Once negotiations are complete, all trade agreements must be approved by Congress. The first step in that process is

passing Trade Promotion Authority. The fact is every President has had this authority going back several decades. Once

Trade Promotion Authority is approved, we are one step closer to opening new markets, ensuring a more level playing

field, raising global standards, and supporting more American jobs. I encourage you to make your voice heard on Trade

Promotion Authority and these two crucial trade agreements.

Second, we need to support and welcome more foreign direct investment into the United States. This is one of the

Presidents top priorities, and it is another key way we are working to compete in a global economy.

Los Angeles County is now home to about 4,500 foreign-owned and affiliated businesses. Directly and indirectly, these

firms employ about one in ten private sector workers in this region. These businesses are a crucial part of the fabric of th

economy here in the Southland.

Today, the United States has never been better positioned to attract foreign investment. More than ever before, global

firms are looking to expand in the United States for a number of reasons: our rule of law, our intellectual property

protections, our stable financial markets, our universities, our enormous consumer market, low-cost and abundant ener

and most importantly, the ingenuity of our people.

The Administration is seizing this opportunity. Through SelectUSA, we are connecting foreign businesses with economicdevelopment officials across the country. Our SelectUSA staff are serving as ombudsmen to foreign companies as they

navigate the U.S. market so they can make their investments here.

We need your help to foster a broader understanding of the benefits of foreign direct investment. U.S. subsidiaries of

multinational firms employ more than 5.6 million U.S. workers, pay an average compensation of $77,600, and account f

20.5 percent of the value of U.S. goods exported in 2011. We are seeing the benefits of foreign direct investment in

communities across America. In Spartanburg, South Carolina, BMW has invested roughly billions, and employs 7,000


5/6



people in the area. This is a success story worth replicating in every state in our union.

Finally, a third way we can strengthen our competitive edge is by passing comprehensive immigration reform.

We are a nation of immigrants. My own great-grandfather came to the United States from Czarist Russia, dirt poor, at th

age of 10. He taught himself English, worked several jobs, earned his law degree at night, and opened his own law practi

at age 30. I am sure many of you in this room have similar family stories.

Today, the facts are clear: About 40 percent of the Fortune 500 were started by immigrants or their children. Immigran

start about 28 percent of new businesses in the United States, even though they only account for 13 percent of the

population. Here in LA, immigrants account for over one-third of the metro areas total economic output.

The problem is this: Our current immigration laws do not support a dynamic and competitive, 21st century economy.

The Senate-passed bill will help change that. It will expand the temporary and high-skilled worker programs that our

businesses need to grow. It allows us to staple a green card to the degrees of graduate students, instead of forcing potent

innovators and job creators to leave after being trained at our universities. In addition, the bill takes common-sense step

to increase the number of international visitors such as business travelers by improving the visa waiver program and

the entry process.

Overall, estimates show that this bill will grow our economy by $1.4 trillion dollars over the next two decades while

reducing our deficit. Here in California, immigration reform could create 77,000 new jobs and boost the state economy

$7 billion in the near term. Put simply, this must be at the top of our to-do list. I encourage you to continue to make you

voices heard.

In closing, let me emphasize that this is just the beginning of a national conversation on the topic of global business

fluency.

As business leaders, we must include global markets including those in Latin America in more of our activities.

Perhaps more than anywhere else in the country, business leaders here in Los Angeles each of you are poised to help

lead in growing our economy through trade and investment.

I saw first-hand at a very young age how people from every corner of the world came to California to build ties of

prosperity and friendship with the United States.

America needs your leadership as we build a globally fluent, more competitive nation in the 21st century.

My commitment to you is this. The Department of Commerce and this Administration will serve as your partner. W

will be responsive and outcomes-driven, and we will demand a strong return on our investment because we know that

you demand nothing less of your own businesses.

Lets work together to create the conditions for firms like yours to grow and hire in the months and years ahead. And let

send a clear message to the world that America is Open for Business. Thank you.

Source URL (retrieved on 05/08/2014 - 11:34am):http://www.commerce.gov/news/secretary-

speeches/2014/01/09/trade-investment-and-need-global-fluency-americas-business-commun

Page Links:
http://www.commerce.gov/news/secretary-speeches/2014/01/09/trade-investment-and-need-global-fluency-americas-business-commun


6/6



[1] http://www.commerce.gov/category/news-type/secretary-speeches

[2] http://www.commerce.gov/category/tags/look-south

[3] http://www.commerce.gov/category/bureaus-and-offices/international-trade-administration

[4] http://www.commerce.gov/category/bureaus-and-offices/office-secretary

[5] http://www.commerce.gov/officials/secretary-commerce-penny-pritzker

[6] http://www.export.gov/looksouth

trade, investment, and the need for global fluency in america's business communities

Documents