AS PREPARED FOR DELIVERY
Tuesday, March 29, 2011
CONTACT OFFICE OF PUBLIC AFFAIRS
Commerce Secretary Gary Locke
Remarks at National Export Initiative Small Business Conference, Los Angeles California
Hello everybody. Thanks for those kind words, and for having us here today.
I’d like to give a special thanks to the people who helped make this event happen:
• Mayor Villaraigosa and the team from his office;
• James Ellis, Dean of USC’s Marshall School of Business; and;
• Dick Drobnick, Director of the Center for International Business Education and Research (CIBER).
They were helped, of course, by staff and students here at USC, as well as staff from the U.S. Commercial Service.
The Commerce Department has been partnering with USC and the Marshall School to stage Asia-Pacific Business Outlook meetings for more than 20 years.
These outlook meetings have a long track record of success, which is why we’ve brought the Commerce Department’s “New Markets, New Jobs” Small Business Tour here today.
Of course, as we meet here this week to discuss the important business of exports, many of us are also thinking of our friends in Japan who are dealing with much more immediate and pressing challenges.
I join with all Americans in extending my deepest condolences to the Japanese people in the wake of this terrible earthquake. Our hearts go out to the families and communities that have been torn apart by this unimaginable disaster.
And the United States is doing everything it can to help the Japanese people recover.
The U.S. government has deployed a Disaster Assistance Response Team that includes personnel ranging from nuclear experts to urban search and rescue teams.
The recovery effort in Japan will obviously take many years and the United States is in Japan for the long haul.
There can be no doubt that Japan will emerge even stronger from this crisis. That’s the nature and character of the Japanese people. And there is no doubt that the Asia- Pacific region – with Japan at the forefront – will continue to be an economic engine for the entire world.
Helping Southern California companies export more to the Asia-Pacific region and to other markets around the world is why we’re here on the second stop of our “New Markets, New Jobs” small business tour.
The purpose of this multi-city tour – which began in Minneapolis last month and will take us to a different city each month for the rest of the year – is simple:
To help small and medium-sized American businesses sell more goods and services around the world, so they can create more jobs here at home.
In the next few minutes, I’ll explain how we’re going to do it.
But first, I think it's important to identify the stakes of what we’re talking about here today.
In his State of the Union address in January, President Obama said how important it was for America to win the future.
He said the most important contest our nation faces is not between Democrats and Republicans, but between America and countries around the world that are competing like never before for the jobs and industries of the future.
And the primary goal of the Obama administration is to give businesses like yours the tools you need to win in the global economy.
On the one hand, we’re aggressively incentivizing investment here in America.
That’s why the December tax cut package signed by President Obama featured a new expensing benefit, which will allow companies to write off 100 percent of their machinery and equipment purchases made in 2011.
That is the largest temporary investment incentive for manufacturers in the history of the United States.
And in his State of the Union address, President Obama called for comprehensive corporate tax reform. He said he wants to work with Congress to get rid of the loopholes, level the playing field and use those savings to lower the corporate tax rate for the first time in 25 years without adding to our deficit.
At the same time, the administration is making unprecedented efforts to help companies like yours break into foreign markets.
The simple fact is that the more American companies export, the more they produce. The more they produce, the more workers they need. And that means jobs. Good paying jobs here at home.
Consider that exports directly support nearly 10 million U.S. jobs, more than 700,000 of them in California.
Or that one in three manufacturing jobs and almost one in five agricultural jobs are tied directly to exports.
And these are good-paying jobs that pay 15 percent more than the typical wage in America. Exactly the type of jobs we need a lot more of.
That’s why early last year President Obama announced his National Export Initiative, which mobilizes departments throughout the federal government to double U.S. exports by 2015 and support millions of new jobs.
We’re already off to a good start. Exports have been a key driver of America's economic recovery, accounting for nearly half of U.S. economic growth since the recession ended in mid-2009.
That represents export’s biggest share of U.S. growth over an 18-month stretch on record.
And exports today account for 12.8 percent of all U.S. economic output, which represents the highest share of our economy since the Commerce Department began tracking this figure in 1929.
Exports to Asia have been a major part of this top-line increase.
Last year, U.S. exports to Asia exceeded those to Europe for the first time.
And merchandise exports to East Asia in particular were up 27 percent last year.
There’s still plenty of room to grow.
Current projections for East Asia’s economic expansion in the coming year surpass 7 percent.
And the Obama administration wants to ensure American companies can capitalize on this potential.
You saw a great example last December, when President Obama signed a landmark trade agreement with South Korea. We are working hard to get this deal through the U.S. Senate, and if it passes, it could boost annual U.S. exports to Korea by $11 billion and support at least 70,000 American jobs.
America’s economic output is expected to grow more from the U.S.-Korea agreement than from our last nine trade agreements combined.
The United States has also been very active in the Asia Pacific Economic Cooperation (APEC), the top organization for strengthening regional economic integration in the Asia-Pacific community.
This May, the Commerce Department is hosting a major meeting for small- and medium-sized businesses in Big Sky, Montana aimed at helping APEC’s member governments build a better environment in which your companies can do business.
Small- to medium-sized businesses are absolutely critical to expanding American trade with Asia and all around the world.
Despite all the progress we've seen in growing American exports over the last few years, we can do so much more.
Consider the fact that only 1 percent of U.S. companies export – and of those that do, 58 percent export to only one country, typically to Mexico or Canada.
Now, of course it's important to sell more within the United States.
But in a global economy where 95 percent of the world's consumers live outside U.S. borders, you've got to go where the customers are.
The more markets you are selling in, the more diversified your customer base is. That’s why U.S. companies that exported a lot generally held up better than companies that didn't during the previous recession.
And the truth of the matter is that your “made-in-the-USA” goods and services are highly valued and greatly desired throughout the world!
Now, there are plenty of reasons why many U.S. companies don’t export:
• They may have trouble getting the financing they need to produce more of their goods; or
• They may be worried about getting timely payment from unfamiliar foreign customers.
• They may have difficulty understanding and navigating foreign customs and regulations; or
• They may not have the networks to get the meetings they need with potential distributors, customers or foreign government decision-makers.
The National Export Initiative or NEI, is designed to help more companies – like those gathered here today – overcome these hurdles.
We understand that when you're running a small business, you’ve got:
• Payroll to meet;
• Orders to fill; and
• Customers to serve
You might not have time to go searching for government services that can help your business.
So we’re coming to you.
Over these past few days, we’ve had representatives from the:
• Export-Import Bank;
• Small Business Administration; and
• The Department of Agriculture;
From the Commerce Department, we’ve got representatives from our International Trade Administration, which advocates for U.S. businesses in 77 countries around the world, and has outreach teams in over 100 cities across America.
Some of you might be familiar with our Gold Key Matching Service – where, for a reasonable fee – our Commercial Service staff go out and find foreign buyers and distributors for American-made products.
If you’re an American firm and you want to sell your goods or services abroad, all you need to do is pick up the phone and call 1-800-USA-TRADE.
Commerce Department experts will then:
• Work with you to design and implement a market entry or expansion strategy;
• Conduct an international search to find potential agents or distributors for your unique business; and
• Contact potential overseas business.
Think of it as match-making for exporters. We'll keep searching for partners and customers for you until you find the right fit.
Gold Key is just one of the many services offered by the International Trade Administration and our local commercial service offices. And our local teams can connect you with resources from our other government partners, like the Export-Import Bank.
To cite just one example of the great work the Export-Import Bank does, they’ll actually guarantee payment from a foreign customer that wants to buy your good or service. This is the type of security a small business owner needs to sleep at night!
Two of the Commerce Department's export assistance teams are right here in Los Angeles, and they’ve got a proven track record of connecting California businesses to those foreign markets:
Just look at the work our team did with Cappuccine, Inc., a small gourmet coffee mix manufacturer based in Palm Springs.
Since connecting with our U.S. Commercial Service in the past few years, this company has gone from exporting to five countries to more than 25 countries.
Our team has helped Cappucine with:
• Meeting foreign health certificate requirements;
• Doing due diligence on distribution channels; and
• In connecting the company to foreign representatives at regional trade events throughout Southern California.
Cappuccine’s now derives 46 percent of its sales from exports, compared with about 25 percent a decade ago.
Our goal here this week is to help everyone enjoy this kind of success.
I know for many companies in Southern California, you're just starting to see the benefits of an economy that’s growing again. I'm confident that that positive momentum will continue in the year ahead.
But one thing is clear:
For the American economy to produce the millions of new jobs we need in the years ahead, our small and medium-size businesses must lead the way.
When you succeed, the entire American economy succeeds.
And the Obama administration will do everything it can to give you the help you need.
Thank you everyone again for coming today.