Sanchez: Mutual Integration in U.S. Interest

BY FRANCISCO SANCHEZ

Today, more than ever, we have to appreciate that we share mutual interests that can only be served by our mutual economic integration. (…)

We know already that the growth of global trade has spurred the creation of a new middle class throughout the world.  And from that middle class the future can rise. 

Latin America is not absent from this historic lifting-up of millions from poverty.  These new consumers are driving new economic development on a global scale. (…)

President Obama  (…)  understands that the world has become a global marketplace and is on the verge of fueling a massive increase in consumption across our hemisphere.  Increasing market integration can be highly rewarding across the region. 

A well-known example is Embraer.  The demand for its airliners is growing around the globe, yet 60 percent of the components of these Brazilian-produced jets are American-made.  Our job is to find the thousands of Embraers in the hemisphere that can make an integrated model economy work to create jobs and improve the livelihood of millions.

The moment we face is made more opportune by the fact our economies are growing again.  In this context, it is important that the American economy as well as the economies of hemisphere have started to grow again.  Had we gathered in this forum last year, our anxiety over an American economy shedding jobs and on the verge of a depression would have been our topic of conversation.   

Today, one of our topics of conversation is that, ten years ago, China was Brazil's 12th largest trading partner; now, it is Brazil's No. 1 trading partner.  China was Colombia's 35th largest trading partner in 2000 and is now its fourth-largest. (…) 

Though today the word ‘trade’ is defined by acronyms -- WTO, Doha, FTA’s and many more –, increased global trade and our growing interdependence are moving millions of individuals from poverty.   To take advantage of the opportunities before us, we have a lot of work ahead of us.  We must remain focused on the problems of low educational attainment, lagging public health, anemic transportation system and dangers to the environment.  We have to understand just how far we have to go.   

The rise of the middle class in many nations is the platform on which market integration can advance, for it is the new middle class that forms a powerful market that as it grows needs products and services that extend from the most basic to the most sophisticated.  The rise and growth of the population of the hemisphere has made it fertile enough ground for private-sector growth and investment.

We are following our own advice in the United States on this very subject.  Before the recession hit in 2007, the contours of America’s future were forming and exports made up nearly 13 percent of the nation’s GDP – the highest since 1916.

Thus President Obama’s National Export Initiative has two short-term goals:  To double exports in the next five years and to support two million jobs.  However, the long-term purpose of the NEI is to put America on a track to take full advantage of the global marketplace within global trading rules. 

To that end, we are developing and discussing how to engage in new commercial strategies for the hemisphere.  We want to know where we can be in these markets in five years’ time, including the reduction of trade barriers.   

I will continue to work towards resolving the outstanding issues in the free trade agreements with Panama and Colombia and assist where I can to complete negotiations on the Trans-Pacific Partnership.  And, as always, we want to be more than a good neighbor, which is why we are heavily involved in helping to rebuild Haiti and to help Chile recover from the earthquake.

A good place to continue our conversation is in Atlanta in November.  There, the American Competitiveness Forum will tackle the very problems that if not solved will limit how competitive all of us can remain.  We should meet there again.

We have often said that we are important to each other.  Those words have never been more true.   (...)  The future of business in Latin America is the business of the future itself.  If we do not recognize our mutual interests and the need to integrate them into a competitive model, we do so at our own peril.

Francisco Sanchez is the U.S. Under Secretary of Commerce and International Trade. This column is based on his prepared remarks at the Business Future of the Americas, Lima, June 21, 2010 organized by the American Chamber of Commerce in Peru.