Remarks at the World Affairs Council of Atlanta
Assistant Secretary, Bureau of Economic and Business Affairs
As Prepared for Delivery
Thank you, Michael, for that introduction. And thank you, Ambassador Charles Shapiro, for inviting me here today.
It’s great to be back in Atlanta. I remember years ago a friend told me that it’s considered rare and special to meet on a street that isn’t called Peachtree.
Charles drove me here today because these same friends used to warn me it can sometimes be hard for out-of-towners to find their way around.
“If you’re lost, don’t worry,” they told me. “Just keep following the signs saying ‘Scenic Drive.’ You’ll either get back to where you started – or you’ll end up in South Carolina. Either way, you’ll have a great time!”
But in all seriousness, I am delighted to come here to discuss the Trans-Pacific Partnership agreement, which was signed this year on February 4th in New Zealand.
I am always delighted to meet business leaders, having been one myself for twenty years. As Michael mentioned in his introduction, I’m the first person to be put in charge of economic policy at the State Department who previously served as both a CEO and ambassador. The reason that’s important is that I actually know what it’s like to make payroll and can make sure that Secretary Kerry’s policy is grounded in issues that matter to American businesses – and to SMEs in particular.
As a former businessman, I know the importance of finding new markets. So when it comes to supporting a trade deal that expands markets for Atlanta businesses and products, so they can compete in one of the world’s fastest growing regions; and a trade deal that eliminates more than 18,000 taxes that various countries slap on Made in America products, then it certainly has my support and, I hope, all of yours.
I firmly believe the American people will support TPP if they are simply given the facts and the figures.
When it comes to TPP, the bottom line is this: American businesses, workers, farmers, and consumers can all benefit greatly. Additionally, America can take a decisive step to expand opportunities in Asia-Pacific markets representing 40 percent of global GDP, and a regional middle class that will grow to an estimated 3.2 billion people by 2030.
Today, I want to share a few facts and figures that speak to the case for TPP – with a special focus on Atlanta, which is the largest exporter in the state – and the 18th largest in the United States
In 2012, which is the latest data available, nearly 8,000 companies exported goods from the Atlanta metropolitan area.
Most of those goods went to TPP member countries, such as Canada, Mexico, and Singapore. South Korea, another Free Trade Agreement partner, was ranked number four.
Germany, which is part of the EU, and therefore T-TIP, was also a big Atlanta export market, ranking number five.
Of these Atlanta-based exporters, 88 percent were SMEs with fewer than 500 employees.
That tells me at least two things: First, Atlanta’s small businesses already know the value of exporting to the world. In fact, in 2014, the Atlanta metropolitan area benefited from existing trade agreements, sending more than half (52.2 percent) of merchandise exports to free trade agreement partners.
Second, when TPP passes – and eventually, T-TIP – tariffs will be removed from many sectors. And those Atlanta businesses, and others who want to expand markets, will do even better.
Judging by the biggest ranked exporters in Atlanta in 2014, some of the businesses who stand to gain include transportation equipment; non-electrical machinery; computer and electronic products; chemicals; processed foods; electrical equipment, appliances, and components; and many more.
Farmers also stand to gain substantially, with a recent report predicting some of the greatest percentage gains for the agriculture sector.
By reducing tariffs and opening new markets for agricultural products, TPP will help generate rural economic activity, increase farm income, and support local jobs.
For example, Vietnamese cotton tariffs, currently as high as ten percent, will be eliminated; Japanese and Malaysian tariffs on cotton will be locked in at zero percent.
Japan and Vietnam will eliminate tariffs on poultry products; Malaysia will establish tariff-rate quotas for live chicks, poultry meat, and eggs.
Japan, Malaysia, and Vietnam will eliminate tariffs on all tree nuts, including almonds, pecans, macadamia nuts, and walnuts.
Malaysia and Vietnam will immediately eliminate all tariffs – and Japan nearly all tariffs – on fresh and processed vegetables. All three countries will eliminate tariffs on potatoes and potato products.
Georgia currently exports $3.1 billion in agricultural products per year.
According to the Peterson Institute, TPP will bring in an additional $357 billion in U.S. exports by 2030. That means America growing faster; American businesses and farmers exporting more; and more and better paying jobs. That’s above the more than 209,000 jobs across the United States that were supported by goods exported from Georgia in 2014.
I would eat up the clock if I listed all the benefits of TPP. So let me just highlight a few more:
TPP is the first trade deal to set rules for state-owned enterprises.
TPP is the first to have a chapter that makes sure small and medium sized businesses benefit from its provisions.
TPP is also the first to take on the issue of the digital economy. It ensures the free flow of data across borders. It removes tariffs on information technology products. And it pushes back on localization requirements.
In sum, TPP is good for America. It’s good for Atlanta’s businesses, workers, farmers – and consumers. And it positions the U.S. economy to build on the successes that we have enjoyed in the past few years. Since the recession ended, our employment has steadily risen. And our manufacturing jobs have enjoyed their longest period of year-on-year growth since the 1990s.
This is a truly critical moment for America’s role on the global stage in the 21st century. By moving forward on this deal, we can fulfill our “rebalance” to the Asia Pacific which recognizes that our prosperity and security are inextricably linked to this region.
We can remove the barriers to our competitiveness – not just by removing tariffs but by forcing state-owned enterprises to compete with us on a commercial basis.
We will also create the first deal in history to set new standards around the world for rule of law, accountability, intellectual property rights; and the strongest labor standards and environmental commitments in history.
As Secretary Kerry has said: “Without a doubt, these trade agreements are at the center of defending our strategic interests, deepening our diplomatic relationships, strengthening our national security, and reinforcing our leadership across the globe.”
The Secretary has also said: “If we retreat on trade, our influence on the global economy will be diminished. And if our economic stature is in doubt, our ability to deliver on defense and political challenges will be increasingly questioned.”
TPP offers new opportunities for Atlanta-based companies – and the U.S. in general – to reach out to new markets and benefit from liberalized, high standard trade.
But the key is to have an agreement in force as soon as possible – and to bring home the best trade agreement for our workers and our businesses.
Trade votes are always hard. But we are convinced in the end that, if enough people, including business leaders, express their support for the jobs in their communities, the growth for their companies, and the opportunities for employees in their districts, the facts will speak compellingly for themselves. And we will have the necessary support.
Your involvement can, and will, make the difference, not only for TPP but other important trade deals on the horizon, such as the Transatlantic Trade and Investment Partnership.
These deals will create even more opportunities to expand our prosperity and economic security for generations to come.
We can’t afford to ignore the 95 percent of markets beyond our shores.
We cannot afford to let other countries that do not share our values dictate labor and environmental standards around the world – ultimately damaging U.S. interests.
Nor can we walk away from this opportunity to build a secure and prosperous future for our country.