Within the Western
Hemisphere, liberalized trading systems have provided substantial
benefits to the countries that embraced them, and greater
benefits almost certainly will follow with the elimination
of remaining trade barriers, says U.S. Secretary of Commerce
Carlos M. Gutierrez
U.S. Secretary of Commerce
In his September 20 remarks at a U.S. Chamber
of Commerce conference on Latin America and the Caribbean,
Gutierrez extolled the advantages of economic integration
while also praising countries throughout the Americas for
assisting victims of Hurricane Katrina, which struck the
United States' Gulf Coast region of Louisiana, Mississippi
and Alabama at the end of August. (See Hurricane
"We are grateful for the outpouring
of compassion from our friends in the Western Hemisphere,"
said Gutierrez. "Hurricane Katrina dramatically shows
how integrated our nations and our economies are. New Orleans
and other Gulf ports are key gateways to the global economy."
In fact, "Hurricane Katrina underscores
the importance of providing the highest common level of
protection from man-made or natural threats," he added.
And because they recognize their mutual dependence, countries
such as Canada, Mexico and the United States already are
"working together economically and to improve our respective
security," said Gutierrez.
THE BENEFITS OF ECONOMIC COOPERATION
The commerce secretary pointed to the economic
growth engendered by the North American Free Trade Agreement
(NAFTA), which has yielded impressive results for Mexico,
Canada and the United States since its passage in 1993.
During the period from 1993 to 2004, Mexico's economy has
expanded by 36 percent, Canada has experienced growth of
46 percent, and the U.S. economy has grown by 44 percent,
Gutierrez said. (See North
American Free Trade Agreement.)
The free-trade agreement between the United
States and Chile is another example of this pattern, according
to Gutierrez. The U.S.-Chile pact has "been good for
the United States; we've regained our position as Chile's
number-one supplier of goods and services," he said.
"It's also been good for Chile; U.S. imports from Chile
are also up strongly."
Gutierrez cited the Security and Prosperity
Partnership (SPP) initiative recently implemented by Mexico,
Canada and the United States as "another example of
our heightened level of economic and security coordination."
This sort of partnership "is necessary for regions
to be fully competitive within the global economy,"
In view of heightened global competition,
the nations of the Western Hemisphere aggressively must
pursue opportunities for growth, Gutierrez said. He urged
hemispheric governments to help establish the proposed Free
Trade Area of the Americas, which would eliminate trade
barriers throughout the region.
Gutierrez praised the U.S.-Central America-Dominican
Republic Free Trade Agreement (known as CAFTA, or CAFTA-DR)
as "an enormous step forward in the process" of
greater regional integration. He also announced that the
U.S. Department of Commerce is organizing a business development
mission to Central America, with the participation of several
U.S. companies. (See Central
America Free Trade Agreement-Dominican Republic.)
Countries that pay attention to global trends
and adapt accordingly, will lay the foundation for long-term
prosperity, he said. "We've got to move beyond the
inward-looking mentality that opposes greater cooperation
and ignores where our competitors will be in 10 or 15 years,"
said Gutierrez. "Integration can help us grow more
efficient, more secure, and more competitive when measured
against our global competitors."
Following is the text of Gutierrez's remarks,
as prepared for delivery:
United States Chamber of Commerce
United States Chamber of Commerce's Forecast
on Latin American and the Caribbean Conference
Remarks by Secretary of Commerce Carlos
September 20, 2005
Thank you for that introduction, Jim [Fendell].
I very much appreciate this award. It is gratifying to be
recognized by a group that has done so much to advance economic
freedom in our region. Thank you.
Let me begin by expressing my thanks to
all of the countries that have offered aid and donations
for Hurricane Katrina relief.
This was one of the worst natural disasters
to strike the United States and it struck a geographically
vulnerable area. We are saddened by the losses but we're
committed to rebuild our Gulf Coast. We are grateful for
the outpouring of compassion from our friends in the Western
Hurricane Katrina dramatically shows how
integrated our nations and our economies are. New Orleans
and our other Gulf ports are key gateways to the global
Hurricane Katrina underscores the importance
of providing the highest common level of protection from
man-made or natural threats.
Canada, Mexico, and the U.S. are already
following this path. We're working together economically
and to improve our respective security.
Consider the strong growth in our countries
since NAFTA passage. Between 1993 and 2004, our countries
have grown 36 percent in Mexico, 44 percent in the U.S.,
and 46 percent in Canada (in real terms). We would never
have grown this quickly with barriers blocking commerce
between our citizens.
Consider the Chilean example. The U.S.-Chile
FTA has been a powerful example of trade's power to build
ties. It's been good for the United States; we've regained
our position as Chile's number-one supplier of goods and
services. It's also been good for Chile; U.S. imports from
Chile are also up strongly. Our new FTA-driven exports vary
from Alaskan coal to California citrus, to services provided
by a Tampa-based construction management firm.
We're selling twice as many bulldozers.
We're shipping more than five times as many tractors. We're
sending twice as much fertilizer and 40 percent more business
Transport vehicle sales are up over 700
percent and passenger vehicle sales are up 75 percent. Take
whatever measurement you choose; people in Chile and people
in the United States are better off because we are trading
freely with one another. The message is clear: together,
we are stronger.
Chile opened its markets, welcomed competition,
and it produced the strongest growth record in Latin America.
Roughly half the people in Chile lived below the poverty
rate in 1987.
Following market reforms during the late
1980s and 1990s, that number had fallen to less than 20
percent. We need to expand those opportunities to the poor
living throughout Latin America. The way to do it is through
greater trade, investment, and economic cooperation.
Last year Chile grew at 6.1 percent with
inflation in check at 2.4 percent. Can you imagine how economic
performance like that could transform lives if it could
be replicated across Latin America?
The Security and Prosperity Partnership
(SPP) initiated by Presidents Bush and Fox and Prime Minister
Martin is another example of our heightened level of economic
and security coordination. This is necessary for regions
to be fully competitive within the global economy.
It's also an opportunity to build more competitive
business communities for strong economies. Last June in
Ottawa, we discussed strategies to raise regional competitiveness.
Some have asked why, with the successful North American
Free Trade Agreement already in place, are our leaders so
focused on integration?
In Europe and Asia, countries are working
together regionally to improve their competitive positions.
China is negotiating free-trade agreements
with regional trading partners, including the Association
of South East Asia Nations and Australia.
Japan and Korea each have an FTA agenda
of their own with countries in the region.
Through the SPP, we are ensuring that North
America is the world's most open and competitive market.
I would like to see that cooperation and integration extend
from pole to pole in our hemisphere.
The SPP and NAFTA have been opportunities
to build more open and secure societies in North America,
but the spirit behind these initiatives responds to the
reality of 21st-century economic competition. Their lessons
should be applied across our region.
CAFTA is an enormous step forward in that
process. Many of you played an important role in our victory.
You worked extremely hard to pass this agreement. You've
overcome opposition in the CAFTA countries.
Local Latin American AmChams were a key
asset in building momentum for passage. We've succeeded
despite protectionist pressures in the U.S. This win was
a critical building block for the future of free trade,
and I congratulate everyone who earned this victory.
Our upcoming business development mission
to Central America is showing us that there is strong interest
among U.S. companies for opportunities in the CAFTA markets.
Next month, I will lead this group to Guatemala, Honduras,
and El Salvador.
We are targeting a wide range of industry
sectors. This includes everything from automotive parts
and services equipment to textiles.
We're going to take some 15 to 20 companies.
The interest extends to companies of all sizes, from small
and medium-sized entrepreneurial enterprises to the largest
multi-national corporations. We saw interest on the part
of companies from across the country.
These companies all have one thing in common:
they recognize opportunity in Central America and they are
eager to begin doing business in those markets. Their interest
will mean more investment, more trade, and eventually added
job creation in the U.S. and Central America.
We've got to move beyond the inward-looking
mentality that opposes greater cooperation and ignores where
our competitors will be in 10 or 15 years.
Integration can help us grow more efficient,
more secure, and more competitive when measured against
our global competitors.
The Americas can be the foremost economic
region in the world. There are unnecessary barriers that
compromise our regional competitiveness. We can do better.
Our driving objective should be to make
the flow of commerce within the Americas both safe and seamless.
The memorandum of understanding we saw signed
this afternoon is a positive sign. This cooperation will
help American companies navigate legal challenges and will,
in turn, help bring more foreign direct investment to Central
Another objective is to further integrate
sectors that comprise a significant portion of our economy.
We can make progress together through cooperation and joint
research in areas like food processing, transportation,
and information technology, to offer only a few examples.
The SPP is showing us how to eliminate the
distortions that skew North American markets, and reduce
the costs of trade and promote innovation and market development.
CAFTA was also a critically important step
in the advance of economic freedom. These young democracies
are fragile. They needed our support. And I'm proud to say
the United States met our responsibility to stand with their
democratic, free-market aspirations.
The borders among Canada, the U.S., and
Mexico have long been bridges between neighbors and commerce.
The hopeful optimism of our new CAFTA partners
and the Chilean example showing trade's uplifting power
argue against tariffs and trade barriers. President Bush
challenged the world at the United Nations to extend trade's
benefits to people everywhere. As the president said: "The
United States is ready to eliminate all tariffs, subsidies
and other barriers to the free flow of goods and services
as other nations do the same."
We are committed to a successful conclusion
of the Doha round. Here in the Americas, NAFTA's success,
CAFTA passage, and Chile's strong growth should encourage
countries to put aside divisions to seize our potential
through a Free Trade Area of the Americas.
Our opportunity is to redefine our borders
within the Americas. We must look beyond our present economy.
Our challenge is to redefine regional integration by setting
a bold new standard for the 21st century.
Isolated and apart, we will never approach
our economic potential. Together, we can make our hemisphere
the most potent economic engine in the world. We can master
the new realities of global competition while lifting up
our people to greater prosperity and opportunity.