State Department Live: Economic Relationships Between the United States and Latin America

Jose W. Fernandez
Assistant Secretary, Bureau of Economic and Business Affairs
Washington, DC
October 18, 2011

**This is an English translation of this "State Department Live" interview, which was held in Spanish. Please see the original Spanish transcript at //**

MR. OSTICK: Good afternoon. I am William Ostick, spokesperson for the Bureau of Western Hemisphere Affairs. I’d like to welcome you to State Department Live, a new interactive space and video platform with the objective of communicating with international media in the region. Our subject for today is the economic policy of the State Department, and how it manifests itself in the region. If you wish to participate, you can send questions via Twitter using #askusa. You can also communicate with @statedept, @econengage, @usaenespanol, and with our, again, I’ll tell you our Twitter handle, #askusa. We have Jose Fernandez with us today, Assistant Secretary for Economic and Energy, and Business Affairs. We ask our participants to utilize the bottom part of the screen where the titles of the questions for the Assistant Secretary appear. We would like to welcome you and your questions, are going to try to answer as many as possible within the time that is allotted to us. We have approximately 30 minutes. We would like to start with some words from the Assistant Secretary, and after that we will take your questions. Mr. Secretary.

ASSISTANT SECRETARY FERNANDEZ: Thank you, Will, it is a pleasure to be here and speak to our colleagues and friends in Latin America… and to speak about a very important subject for the Obama administration and for secretary Clinton, which are the economic relationships between the United States and Latin America. Naturally, they are relations that go beyond just the economic aspect, we share human relations, there are nearly 50,000,000 Hispanic individuals in this country… but the subject that, that is of great concern to me, here in the State Department is the economic and business side, and I am happy to tell you that our relationship is going very well, we have, I just got back from the meeting of Caminos a la Prosperidad in Santo Domingo, in which Secretary Clinton participated, and in which we were able to reaffirm economic relations among the fifteen countries gathered there, and of course today we are celebrating the fact that the treaties of Panama, Colombia, and South Korea are moving forward in the U.S. Congress. It is indeed a pleasure to be here, and I am looking forward to the questions that journalists and our colleagues in Latin America have for us.

MR. OSTICK: Thank you very much. We have a question from the Diaros y Noticias agency. “What does the United States think about the strong presence of China in the South American Region, and in particular in the area of energy? Is Washington concerned by this strong presence? China has investments in the region of over 5.5 million dollars by means of SinoPec.”

ASSISTANT SECRETARY FERNANDEZ: China is a very important partner for the United States, it is a country which has opened up greatly towards Latin America in recent years, and this has many important ramifications. Chinese investments, and China’s business in Latin America, are benefiting many countries in the region… it can be seen in trade between China and Brazil, between China and Argentina, they are very strong trade relations. We look very favorably on this, we believe that this benefits Latin American Countries, and what we are trying to do from the point of view of the State Department is to help our own companies to compete, and see that our companies receive equal treatment, that they remain competitive, under certain equitable rules, we are willing and our companies are willing to continue having trade relations in Latin America where we have been doing well for many years. Thus, we see China as a… as a competitor, for North American companies it is a competitor who we are willing to cooperate with, and we see it in a favorable manner for Latin America because it is one more competitor for North American products.

MR. OSTICK: Very good, thank you very much, now we have a question here from Jacqueline Guevarra from the Semana de Colombia magazine. “By what percentage do you believe that exports from the United States to Colombia will go up over the coming years as a result of the treaty? What investments do you foresee in the country?

ASSISTANT SECRETARY FERNANDEZ: Alright. We are very happy that the treaty with Colombia is moving forward, it is a treaty that has been under discussion for a very long time in the U.S. Congress and we are thrilled to see that it has, that it was approved last week. Trade relations with Colombia, to be very clear, are of top importance, it is one of our key markets and Colombian companies also do a great deal of business in this country. In the least year, for example, U.S. exports to Colombia reached approximately twelve billion dollars. According to experts considering the consequences of the new treaty for the United States, our exports should increase by approximately a billion dollars. This figure naturally depends on the desire of U.S. companies to work in Colombia, but we look very favorably on this because eighty percent of duties with Colombia will be reduced immediately, and the rest will be gradually eliminated, and we believe that our companies, agricultural companies, equipment companies, they are going to be able to compete on equal terms in Colombia, and we believe that this is going to result in an increase in exports not only from the U.S. to Colombia, but also, and this is very important, from Colombia to the U.S. The idea behind these treaties is that they benefit both parties… and we are very pleased with this. Yes, though, we believe that exports from the U.S. to Colombia are going to increase.

MR. OSTICK: We have another question in the same area… “When will the free trade treaties with Colombia and Panama go into effect?”

ASSISTANT SECRETARY FERNANDEZ: I have to… we are waiting for the treaties to be signed and approved by both the Colombian and the U.S. Congress.

MR. OSTICK: They’ll be signed on Friday, right?

ASSISTANT SECRETARY FERNANDEZ: Yes, they will be signed on Friday… we will have to look at the exact agreement, but it is imminent in this case, it is something that we believe that Colombian and U.S. businesses will be able to use very soon.

MR. OSTICK: We have a question here from Edith Saldaño, from Mexico el Financiero: “When will companies see the benefits of the agreement regarding shipping, we do not see companies requesting permission to cross the Mexican border using this agreement with U.S. companies. What are the benefits for both countries and the companies… what benefits will companies receive from this agreement?”

ASSISTANT SECRETARY FERNANDEZ: This last week, our Department of Transportation issued the first permissions granting authority for… for Mexican shippers to be able to enter the US, and in turn, the Mexican government decreased duties imposed on U.S. goods by approximately 50%, the reason for the problem with the truckers, this is, this is an event that will have many consequences and for which we will rapidly see results. No, though, last week was the first time that our Department of Transport allowed truckers to enter the United States. What will the benefits be… one benefit is that our exports to, to Mexico will be able to increase due to the fact that the duties imposed by Mexico are going to be eliminated, and in turn, Mexican truckers are going to be able to be allowed to transport products to this country, and this will create new jobs on both sides of the border, which both countries will generate as a result of this type of trade.

MR. OSTICK: Thank you very much. Another question from Araceli Arias from Diaro el Universo, I imagine from Ecuador. “Ecuador has achieved a new expansion of the ATPDA through the approval of the free trade agreement with Colombia. What possibilities does Ecuador have of maintaining a duty program without needing to reach a trade agreement?

ASSISTANT SECRETARY FERNANDEZ: Alright, first of all we are very happy about being able to extend this agreement until the year 2013, so that we have a couple of years, and we will see at that point, we have every intention of continuing to improve our trade relations with Ecuador, but thankfully we have two years that this treaty has been extended, and therefore, we are going to continue working on this subject.

MR. OSTICK: Thank you. I remind viewers and participants that we can be contacted by Twitter, #askusa or also #econdiplomacy, or by the Twitter handles @statedept, @econengage, and @usaenespanol. We have a question here from Humberto Echechuri, from the newspaper Tribuno de Salta. “The U.S. has its own economic problems, but Europe doubtless has many more, due to the fact that it is a region including many countries. What impact will this situation have on Latin America (the European situation)?”

ASSISTANT SECRETARY FERNANDEZ: This is difficult, this situation in Europe, I believe, is a concern to all of us, it is a situation that will have to be resolved by the European community, by European governments, what we are trying to say, here in the Department of State as well in other U.S. government agencies, is that we are willing to assist, any type of measure that the Europeans take to move forward and out of this difficult crisis. The effect on Latin America will depend on what happens, naturally, but it must be considered that for many years Latin American governments have taken measures to protect themselves from this type of infection, as we call it, in other regions of the world, they have taken measures to reduce their fiscal deficits, they have taken measures to protect their markets, and therefore, while we are, of course, going to suffer if something happens, I still believe that measures have been taken in a large majority of Latin American countries, that they have taken sound measures to protect themselves. That said, what I believe is most important these days is to try to help them get out of this, of the crisis that they are going through currently.

MR. OSTICK: Thank you. Another question from Argentina, this time from the south of the country, Mauricio Lorenzo Renoso from Santa Cruz, Argentina asks us: “In her discussion, Secretary Hillary Clinton referred at length to the relations between the United States and Asia… but she did not make any reference to alignment of political strategies with Latin America. In this sense, what is the position of the Obama administration towards the southern continent: will it insist on free trade treaties, or will it attempt to toy with a new model of relation?”

ASSISTANT SECRETARY FERNANDEZ: OK, madam secretary on this last… in the last discussion that she held, which was last Friday in New York, in the New York Economic Club, at various points discussed our trade relations with Latin America. In fact, she noted that forty-three percent of exports from the U.S. go to Latin America, and reaffirmed that the relations between the U.S. and Latin America are fundamental for the U.S. economy and also for our relationship. We… all of our colleagues here in the Department of State and all of our agencies in the Obama administration are paying a great deal of attention to Latin America… I just returned from the Dominican Republic, where we spoke on how to encourage economic growth at the same time that we created social inclusion projects, how to look for a way that we could all benefit from economic growth, both the Clube Empresarial but also women, minorities, how education could be improved, how the economy could be made more competitive. We are doing a great, great deal of work on the economic side… another example that I can give, last Friday, the reason that I could not attend Secretary Clinton’s discussion is that we were here in Washington spending a half day with our Brazilian colleagues, holding an economic partnership dialogue, in which we were speaking of ways in which we could improve economic relations between Brazil and the U.S., and there is so, so much that could be mentioned, economic relations with Latin America continue to improve not only with Brazil, but also, by means of GAMA, with North American countries, we are going to continue doing this, and Secretary Clinton has mentioned this on many occasions, both in Santo Domingo and also last Friday, she has spoken very strongly and emotionally about the need to continue improving these relations.

MR. OSTICK: Thank you, and a related question. “What are you doing to ensure energy security for the environment and for the competitiveness of Latin America?”

ASSISTANT SECRETARY FERNANDEZ: Well, we have several agreements in the area of energy, we have one named ECPA, which is the creation of certain associations and collaborations with various countries in order to improve the Latin American energy system, in the Dominican Republic for example, we held the fourth dialogue of the year, we’ve had four already, for CAREF, which is a forum on renewable energy in Central America, named CAREF for its acronym in English, in which we gathered regulators from Central and Latin America, investors in the area of renewable energy, companies operating in this area, and we spoke of what it is that governments in the region could do in order to encourage renewable energy in Latin America. This is the fourth dialogue that we have held, and in each dialogue that we have been able to meet for, we have been able to speak to more than one hundred individuals, we have had the opportunity to discuss what several countries are doing to encourage the use of ethanol, to encourage the use of solar and wind energy. So then, we have great plans, we have major initiatives on energy that are moving forward with the intent of improving in this area, and because we share, not only with our European colleagues, but also with our Latin America colleagues, the need to reduce our carbon footprint as it is called, in the area of energy. Thus, it is something that we see as a great opportunity for future collaboration between the U.S. and Latin America, and our regulators, which need to be, the government needs to be willing to assist in encouraging this type of energy.

MR. OSTICK: Thank you very much, and another question in the area of energy. Armando from Caracas asks: “Will Venezuela continue to be a secure provider of petroleum for the U.S. and the world, what recommendations do you have for oil companies who wish to invest in Venezuela?”

ASSISTANT SECRETARY FERNANDEZ: Venezuela continues to be a very important energy supplier for the U.S. in terms of petroleum products, in fact various, not only is it an exporter of petroleum, but it also plays an important role because it is the owner of CITGO, so it has, not only important effects on petroleum products but also gasoline products. It is a very important supplier, and in that the subject is investment, we insist in the same thing that we insist on for any other country, which is that U.S. companies are treated in an equal manner and that our agreements are respected.

MR. OSTICK: Another question regarding the empowerment of women. “What is the Department of State doing to support the economic empowerment of women?”

ASSISTANT SECRETARY FERNANDEZ: Yes, this is a key issue for Secretary Clinton, for the last twenty years or more, she has been focusing attention on this subject, and she sees it as a fundamental aspect of what we do in the Department of State. She has named an ambassador for women’s affairs. In the Dominican Republic, she met with businesswomen and in many places, in fact, I understand that today she was in [Bolivia] where she met with a group of women, we are always speaking of the need for creating opportunities for fifty percent of the population, and she has very clearly said on many occasions that it is not sufficient to encourage economic growth if fifty per cent of the population is not participating in this activity. So, Secretary Clinton has made this one of her principal issues, and we have, in the economic area, created various programs in Latin America to assist entrepreneurship in Latin America, personally I was closely involved in a project in Peru aimed at seeking a way to assist businesswomen, in small to medium sized businesses, help them, first to receive business training, the training that they would receive in business universities and trade schools, and together with buyers in American companies who wish to purchase their products. So, certify women’s businesses, offer them good training, and seek customers… because there are no businesses, either made up of women, men, or both, that could survive without the presence of women. Therefore, it is a subject that we are paying very close attention to, we are involved with several organizations working in Central America, with our colleagues in the government, looking for ways in which the governments may give more consideration to this subject, and we’re going to continue pushing, it is a subject that, I would say, is one of the most important that Secretary Clinton is promoting at this time.

MR. OSTICK: Very good, thank you. Armando de Caracas sends us another question regarding Venezuela. “What should Venezuela do to attract more foreign capital?”

ASSISTANT SECRETARY FERNANDEZ: What Venezuela needs to do is what any other country, including the U.S., needs to do in terms of attracting foreign capital: maintain clear rules, fair rules, strong rules, maintain a state of law, and this is something that any country would have to do. For example, right now in the U.S. we are promoting an order from President Obama to bring more inversion to the U.S., called Select USA, and in this project, we are looking at our own regulations, we are seeking to see what we can do in our own country to make foreign investment easier, to ensure that the rules are clear, that they are applied in an equal and transparent manner, and this is what any country in the world needs to do.

MR. OSTICK: Let’s go back to the subject of Colombia. “Is the United States interested in Latin American products, specifically those from Colombia? In which products?”

ASSISTANT SECRETARY FERNANDEZ: I am not in the private sector, but I can say that… all of the flowers that I’ve given my wife over the last few years have come from Colombia, and I know that… the flower market is very important, there are many others, coffee of course, agricultural products, Colombia has many things to export. Our, what we are not going to do in the Department of State is to attempt to predict which products will be imported, what we try to do is look for the best way to encourage exports, encourage trade, and we believe that the private sector is the one which is going to have to decide this. This sector, if it is left alone, and not disturbed, seeks its own opportunities, and this is what we are trying to encourage, to create opportunities, lower duties, make products of both countries more equal, and we believe that businesspeople are going to decide what should be exported.

MR. OSTICK: Thank you. We have two related questions. Caesar Agosto de Sosa de Quito asks, “What is the amount of cooperation between the U.S. and Latin American countries? Will this amount be reduced in 2012?” The related subject is, “how is the U.S. assisting in development priorities for emerging markets,” so, two related subjects?

ASSISTANT SECRETARY FERNANDEZ: Alright, first of all, I am not sure at this time, I’ll have to send it later, the amount, but we are trying to encourage, and this is something that should be made very clear, that relations with Latin American countries go well beyond those of simply national relations, assistance… it is a relation between partners, what we are trying to say is, attempt to create conditions that North American and Latin American countries may cooperate, may have treaties for development. I’ll offer the example of agriculture, OK? The need to provide food for the world is something that we are all familiar with. What we are trying to do is to seek a way to do this in which our agricultural companies that possess great technology, that have a great level of knowledge of how to improve production work in many countries of the world, including Latin America, to increase food supplies. This is the type of development that we are performing, it is not a question of simple supplying good, we are well beyond that at this point, these relations with Latin America have moved past this scope, we are trying to create conditions in which the private sector may cooperate, may generate more wealth, and that it is something sustainable, because this is what the last few years have shown us, something that we have learned, which is that in order to maintain sustainable cooperation, we need to find a way to involve the private sector, because governments come and go, one president today and another tomorrow, but the important thing is to maintain this continuity, and the only way of doing this is with the private sector.

MR. OSTICK: Thank you. Now, we’re almost out of time, we have one last question, and a chance to offer some closing words. The question is this: “What is the importance of Latin America as an economic ally of the U.S.”?

ASSISTANT SECRETARY FERNANDEZ: Latin America is fundamental as an economic ally and political ally, starting with one of the first things that I stated at the beginning of this interview, we tend to forget the human connections that we have with Latin America, the fact that the most important, largest minority in this country presently is the Hispanic population, which one can see in in my native city, New York, neighborhoods where Dominicans live, neighborhoods of Colombians, so the most important aspect is the human one. Secondly, history itself is a great help to us with Latin America, we have two hundred, three hundred years in which we have tried to solve problems, we are part of a family. We have our problems, like any other family, but there is a knowledge, a familiarity between the U.S. and Latin America that takes time to build, centuries of relations, and this is part of the importance, part of the reason for which we always will need to pay close attention to Latin America, working with Brazil, with Mexico, on economic subjects, working with the region in other countries, we are working with Brazil in Africa [for example]. So, it is of fundamental importance, we need both, each needs the other. Thank you.

MR. OSTICK: Thank you so very much. Unfortunately we have run out of time. I remind our participants that they can follow us by Twitter, #askusa or also @usaenespanol, you can also follow us at @statedept, @econengage, @useenespanol, #econdiplomacy. If you still have questions that need to be answered, we can respond directly by means of e-mail. We appreciate your participation, on behalf of the State Department Live, myself, the subsecretary, ah, Assistant Secretary Fernandez, we thank you for your involvement. Good day and until next time.