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Under Secretary of Commerce For International Trade Francisco SÁnchez
United States Association of Importers of Textiles and Apparel
24th Annual Textile and Apparel Importer Trade and Transportation Conference
Wednesday, January 9th, 2013
New York, New York
As prepared for delivery
Thank you very much, Maureen (Gray) for that kind introduction.
And my thanks to Julie Hughes, who we have been proud to work with on many issues; Hubert Wiesenmaier, who has exhibited great leadership; and all those with the United States Association of Importers of Textiles and Apparel, and the American Import Shippers Association, for the opportunity to participate in this 24th Annual Conference.
I had the pleasure of meeting with quite a few of you last year. That’s when Maureen and her team at Ralph Lauren were kind enough to give me a tour of their facility. It was incredible to see all the innovative designs and production up close.
And to me, this experience gave new meaning to the classic Ralph Lauren saying that one doesn’t design clothes, they design dreams. It was really cool to see all these ideas come to life.
And afterwards, there was a roundtable discussion with members of this executive committee, on topics ranging from sourcing to trade policy. And I really appreciate this opportunity to continue the discussion today.
As Maureen mentioned, for roughly three years, I’ve had the privilege of serving as President Obama’s Under Secretary for International Trade. In this role, I am committed to helping American businesses compete and succeed in the global marketplace. Although this work has always been significant, in so many ways, it is more important than ever.
We are living in a time of incredible change because of technology. All of us have access to the world at our fingertips through our computers, tablets and mobile phones.
For me, this hit home over the holidays. Instead of going out to shop, many of my family members and friends chose to stay home and buy their gifts online. And that served as another reminder for me: that consumers have never had more options. And businesses have never had more competition.
While some may view this new global economic environment as a scary reality — I don’t. That’s because I believe in the ingenuity of the American entrepreneur. I believe in the talent and work ethic of the American worker. I believe in the quality of American products. And if given a fair shot, I believe that our businesses, goods and services can compete anywhere in the world.
That’s why all of us in the Administration are working to give businesses that fair shot. We want to link them with the 95 percent of the world’s consumers who live outside our borders. There are great opportunities out there, and American businesses must seize them.
Unfortunately, just a small percentage of American businesses export. And quite simply, we as a nation can and must do better if we are going to fulfill our full economic potential. That’s why it’s been my priority to link American businesses with the opportunities abroad. And it’s also a big priority for President Obama as well.
As you all know, he came into office at a time when the nation was facing the worst economic crisis since the Great Depression. He correctly recognized that we had to go from an economy fueled by leverage and bubbles to one founded on American innovation and products. And as he has said, a key part of this shift is giving these American-made products every chance to succeed by finding new markets and new customers.
So the President set an ambitious goal in 2010: to double U.S. exports by the end of 2014 through an effort called the National Export Initiative. And despite current economic challenges in the global economy, I’m proud to report that we’ve achieved some historic milestones.
In fact, U.S. exports are at record levels. In 2011, U.S. exports reached an all-time high of $2.1 trillion in total value. This included $22 billion in textiles and apparel exports — up 35 percent from the year the President took office. And although we are a few weeks away from knowing the totals for 2012 as a whole, I can tell you that we are again on record pace.
The significance of these numbers extends far beyond the columns of a spreadsheet. What we are talking about here is jobs and growth. In fact, according to the latest data, exports support nearly 10 million jobs, and have contributed greatly to the 34 straight months of private sector job growth the U.S. economy has experienced.
So clearly, the U.S. export story is full of successes. And I want to ensure the next chapter is even better. This means doing all I can to support your industry. After all, it’s a key part of our nation’s economy.
Every year, U.S. consumers spend $340 billion on clothes and shoes*. This economic activity benefits businesses and communities. It also helps employ millions of Americans.
So the impact of your industry goes far beyond the department stores and fashion runways. To borrow Tim Gunn’s catchphrase, you not only “make it work”, you also put people to work.
And that benefits families and communities.
So I’ve worked to learn more about your industry, your opportunities and your challenges. In fact, today marks the 12th textile and apparel industry event I have participated in during my tenure. As I mentioned earlier, I was proud to take part in a roundtable discussion with the members of this body’s executive committee at Ralph Lauren’s headquarters.
I’ve also met with apparel manufacturers from coast to coast and yarn spinners in North Carolina. And I was pleased to kick off the first- ever organizedAmericas Sourcing Supply Chain Summit and Pavilion at the MAGIC Sourcing show in 2011, as well as take part in the Show the next year with a focus on “Made in the USA” products.
From these experiences, I’ve listened and learned. And I’m firmly committed to helping:
- expand sourcing opportunities for “Made in the USA” products;
- increase markets for U.S. exports; and
- reduce barriers to trade.
And today, I’d like to talk about some of the work and progress we’ve made towards achieving these goals. The most obvious measure we’ve taken to expand opportunity is simple trade promotion, meaning getting out there, pounding the pavement and raising awareness about the great opportunities in the international marketplace.
The International Trade Administration has staff located in more than 100 cities and 70 countries. Every day, we are out there talking to American businesses of all sizes. We strive to connect them with the opportunities overseas through activities like trade counseling and matchmaking sessions. And it’s making a real difference.
I hear stories all the time about businesses that have grown and hired workers because of rising export sales. And I ask all of you to get the word out about the services we offer. Tell your friends and neighbors about our website: export.gov. Tell them to reach out to us. We stand ready to help them find international buyers and customers.
In addition to this work, we’re also approaching trade promotion from the other angle by helping global buyers find U.S. manufacturers. As all of you know, products with the “Made in the USA” label are in great demand all over the world. However, a common challenge for international buyers is locating U.S. manufacturers to source from.
That’s why at last year’s MAGIC show, I was proud to announce that our Office of Textiles and Apparel is working on a searchable registry of producers that make their goods in America. It will help address this challenge. Businesses will register themselves in our database, and all those looking for a specific U.S. textile, footwear or apparel manufacturer will now have a place to go.
After I made the announcement, we got a tremendous response. Our private sector partners told us that the registry would save them time and money. They told us that the registry would lead to new partnerships. And they told us it would be a perfect place to match supply with demand.
I’m excited that this ambitious effort will launch in a few months. And I deeply believe that it will go a long way in forming new economic alliances that will increase U.S. exports. However, promotion alone won’t achieve all the goals we seek. We also need good policies that level the playing field for American firms and create new opportunities in important markets.
Certainly, the President understands this, and successfully signed legislation implementing three trade agreements in 2011 with Korea, Colombia and Panama. I know they took a long time to finalize, but the President was determined to get the best deal for the American people. And he did.
In total, these agreements will eliminate a majority of tariffs, and give U.S. companies unprecedented access to these important markets. All three took effect last year and will lead to billions in new exports, as well as support tens of thousands of new jobs.
In particular, the agreements with Colombia and Panama successfully round off the free trade agreements negotiated in the Western Hemisphere region, and add to the proven success of existing trade agreements with several Central American countries:
- the Dominican Republic;
- Peru;
- Mexico;
- and Canada.
This is important because, in 2011, 66 percent of textile and apparel exports were shipped to our partners in the Western Hemisphere — our top market for the industry. So we are poised for even greater regional integration and expanding supply chains which benefits all parties.
And to build on this progress, we continue to be engaged in Trans-Pacific Partnership negotiations. I know that Kim provided you with some remarks on the most current round of TPP talks, so I won’t cover old ground.
I’ll just reinforce the point that the Administration is looking to conclude this Agreement by the end of this year, contingent on meaningful engagement from all TPP Partner countries. And we will look to you — and all industry stakeholders — for your continued engagement as well.
In addition to creating new policy, the Administration has also been working to enhance existing policies. Case in point is the Third-Country Fabric provision in the African Growth and Opportunity Act. I know I don’t have to tell you about the benefits of this measure.
You have spoken out about how this provision is responsible for most of the apparel trade under AGOA. You have spoken out about how this trade creates jobs, both in Africa, and here at home in areas ranging from logistics to retail. You have spoken out about how the provision helps “U.S. retailers achieve lower costs and diversify supply chains.” And I’ve been proud to champion your cause.
When I testified before Congress last summer, I urged them to extend the provision beyond 2015 in order to provide the certainty businesses need to grow trade and create jobs. And I’ll continue to advocate for it because it’s good for business and our economic future.
I was also outspoken about the need to fix the CAFTA-DR. As all of you know, this agreement with our Central American neighbors was negotiated in 2003. And it wasn’t perfect.
In fact, there was a loophole that posed a significant threat to American textile businesses and jobs. Basically, out-of-date language allowed for the use of a certain yarn from countries outside the U.S. and CAFTA-DR region.
When I testified before the Senate Foreign Relations Committee, I reiterated that fixes to it were a priority for this sector and our economy. Kim from my office — and the Office of the United States Trade Representative — were very vocal as well.
With help from industry, we gained a consensus with our partners in Central America and amended the Agreement to require that all types of sewing thread used in apparel that qualify for duty-free treatment originate in the region.
That amendment was signed at the 5 year CAFTA ministerial in February of 2011. Then we worked with Congress to pass legislation implementing this amendment. And the CAFTA fixes were signed into law by President Obama last August, and went into effect in October.
This was a significant win for U.S. sewing thread producers, who are now able to recapture market share in Central America. And I thank you for your support of this legislation of this bill.
In addition, you have also told us about Argentina’s restrictive trade measures. And in August, the U.S. requested consultations with the Government of Argentina under the dispute settlement provision of the WTO. Unfortunately, consultations did not lead to a resolution of our concerns.
So in December, the United States requested the establishment of a dispute settlement panel. And we’ll continue to pursue action as long as necessary so that our companies can compete on a level playing field.
We do so because we want the textile and apparel industry to succeed. When you succeed, America succeeds. When you prosper, American families and communities prosper.
That’s why I pledge to continue to be your ally and advocate. Through promotion, policy and partnership — we have done big things. And I know our future together will bring even bigger successes.
Once again, my thanks to all of you with the United States Association of Importers of Textiles and Apparel, and the American Import Shippers Association, for the chance to be here today.
I’d be happy to answer any questions.
* According to the American Apparel & Footwear Association.
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