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Alan Larson, Under Secretary of State for Economic, Business, and Agricultural Affairs Remarks to Lieutenant Governors Association Washington, DC, February 14, 2000 |
Thank you for your invitation to meet with you today. I am delighted to have the opportunity to discuss how the federal government, and in particular the State Department, can work for you and with you to advance our shared agenda of increased prosperity at home and abroad. At the State Department, we're acutely aware that effective diplomacy begins at home. During her time at State, Secretary Albright has made it a point to travel widely throughout the United States and learn first hand what Americans think about our role in the world. She also feels it is very important that this Administration communicate to the American people the importance of strong engagement with the rest of the world and the necessity of adequate resources to support that engagement. I similarly have been enlightened and energized by my travels around the country. And much of what I try to accomplish on a day to day basis -- be it expanding markets for American farmers, creating more and cheaper transportation links with other countries or promoting market reforms in the developing world -- is informed by my Iowa roots. Abroad, the State Department works closely with U.S. states as they seek to expand their export base and promote investment from foreign companies. Most states have offices abroad, particularly in Europe, and many governors have led trade and investment missions overseas. The State Department, through our network of embassies and consulates, has added to the success of these efforts by assisting companies to make valuable contacts, providing useful information about particular markets, and helping to ensure that U.S. companies can compete on a fair basis with their foreign counterparts. Every chief of mission in a U.S. embassy abroad is charged with working with our private sector to expand opportunities for U.S. companies. Most take this responsibility very seriously, and ambassadors set the tone for their embassy staffs. Moreover, in vigorously promoting our trade and investment interests abroad, we also serve our greater foreign policy interests. Exemplary business practices and good corporate citizenship are among the best exports the United States can offer. In fact, I was pleased recently to inaugurate with Secretary Albright the State Department's annual award for corporate excellence. One of the winners was F.C. Schaffer, a medium-sized firm from Louisiana building state of the art sugar mills in Ethiopia, while the other award was presented to Xerox, headquartered in Connecticut, for its outstanding corporate citizenship, innovation and business practices in Sao Paulo, Brazil. Our American values are also very much in evidence as we work for more openness for our exports of services and goods. Over the past 5 years, the State Department has negotiated 42 open skies agreements with foreign governments. These agreements completely deregulate civil aviation, giving air carriers freedom to introduce new services to meet the needs of passengers and business. We have also dramatically opened up civil aviation markets in Canada, France, Japan, China and Mexico. These deals have an enormously positive impact on local economies; a single daily international air service can generate hundreds of millions of dollars in local spending every year. A recent study shows that the economic benefit for Chicago per passenger is 5-6 times greater for international than for domestic service. And as a result of these agreements, many more cities are now only a stop away from foreign markets and cultures. At the national level, the benefits are equally compelling. Just as a result of our agreement with Japan, we will add almost $1 billion annually to our aviation services trade surplus. The same agreement is expected to lead to another $1 billion in new investment. We are also working hard on helping to realize the enormous international potential of electronic enterprise. This will not happen unless we can push excessive government regulation and telephone monopolies out of the way. That is why we are pressing foreign governments in every way for reduced telecom rates, open-endedness to foreign investment and competition rules that force monopolies or dominant operators to permit interconnections with their networks at competitive prices. If we can integrate transportation and communications networks, we can vastly improve the delivery of goods and services from all over the world to the customers' front door. We can free many workers for the need to commute to a factory or an office, and let them schedule their work around other interests and obligations. We can achieve on a global basis the efficiencies of the division of labor and just-in-time delivery, eliminating the waste of excessive inventories and production of goods for which there is not real demand. This is just a small foreshadowing of the many benefits to ordinary citizens that increased global economic integration is likely to bring. But to many Americans, globalization is a troubling concept as well. The recent WTO ministerial meeting in Seattle showed in particular the widespread unease about further trade liberalization, with concerns about the environment and worker rights at the forefront. Having been in Seattle, I'm aware of the extent to which some of the demonstrators would go to make their point. Let me say a few things about Seattle and world trade. First, as President Clinton has stated, the concerns of those demonstrating peacefully in the streets of Seattle have come through loud and clear. It has and it remains a principal goal of the United States to put a human face on the global economy, including the world trading system. This means creating a forum within the WTO on trade and labor, to take measures to ensure that expanded trade and enhanced environmental protection go hand in hand and to make the WTO itself more open and accountable. We need to do more to convince our trading partners in the developed and developing worlds that adoption of these measures would result in the increased public support on which the health of the world trading system depends. Notwithstanding the setback at Seattle, we must move forward, not backwards. In fact, global talks on agricultural and services trade have already begun, as mandated by the Uruguay Round agreements. We are now working with our trading partners on finding an acceptable formula for a new round of broad-based trade talks. Our goals are the same before and after Seattle: substantially lowered barriers in agricultural, goods, and services trade and improved rules for the trading system of the 21st century. Extension of Permanent Normal Trade Relations (EPNTR) to China is one of the President's top priorities for the year 2000. China's accession to the World Trade Organization and PNTR are fundamental to America's foreign policy of engaging constructively with the PRC and, in the process, strengthening our own security and prosperity. WTO accession and PNTR will open China's markets to U.S. business, agriculture and services, without requiring us to provide any significant additional access for China to our already open market. And let me assure you, we will also be able to keep in place in the U.S. measures that prevent China from trading unfairly here. If we do not extend PNTR, however, we will place our providers at a competitive disadvantage with regard to their European and Japanese competitors in what will surely be one of the biggest markets in the 21st century. This year we will also be working hard to obtain final Congressional approval of the Africa Growth and Opportunity Act and the Enhanced Caribbean Basin Initiative. Both measures will provide strong support for market-oriented economic growth and economic reform in regions of great interest and considerable commercial opportunity for the United States. Another worthwhile initiative which we hope to see passed in the current Congress is the Southeast Europe Trade Preference Act, a measure that would help facilitate export-oriented growth in a region that has been hit so hard by conflict. I would like to turn to two areas that involve the roles of state and federal governments in our foreign economic interests. First I would like to bring to your attention an effort on the part of the United States and the European Union to negotiate market opening sectoral agreements in services sectors such as insurance, architecture and engineering. Under these so-called "mutual recognition agreements," the U.S. and EU would agree to recognize accreditation or licensing granted under each other's regulatory systems. This would facilitate the work of professionals on both sides of the Atlantic, and in doing so, lower the costs and increase the scope of investment and trade. Since trade in services between the U.S. and EU exceeds $130 billion, these cost savings would be significant. But since many of these areas are subject to state rather than federal regulation and certification, we need to work with you as we enter into negotiations with the Europeans. I think this is a worthy effort that can bring real benefits, particularly in making your states more attractive destinations for foreign investment. We hope to get started on these talks next month. An issue of some delicacy that involves the relationship between the federal and state governments concerns efforts on behalf of some states and localities to impose economic sanctions for reasons of foreign policy. The motivations for doing so are very understandable. There are certainly enough governments around the world that engage in conduct that stirs public indignation and prompts calls for a strong government response, such as the abuse of human rights in Burma. And I am sure that among the motivations for state legislatures to pass sanctions measures is the desire to be supportive of efforts on the national level to deal with these governments. However, this is one area where we could use a little less help. The most effective way to achieve change abroad is through multilateral coalitions. It is difficult enough for the United States to have an impact acting alone; it is even more difficult for individual states and localities. When dealing with foreign governments, it is important that the U.S. speak with one voice. In fact, the Administration has filed an amicus brief in support of the Foreign Trade Council's suit against the Massachusetts law that discriminates in the awarding of state contracts against foreign and domestic companies and their affiliates that do business in Burma. Although both we and the State of Massachusetts have the same goal of promoting democracy and human rights in Burma, the state statute conflicts with the federal sanctions regime, particularly in its inflexibility and extraterritoriality. We believe the President should have the authority to impose sanctions as well as to be able to use leverage by moderating them when appropriate. I ask for your support in making the use of economic sanctions a more effective foreign policy tool. Surely there are other opportunities for fruitful economic cooperation between the federal government and the states. As we enter the 21st century, we have much to be optimistic about. Our economy is strong and likely to remain so. Unlike so much of the rest of the world, we have already taken many of the steps necessary to ensure our long-term competitiveness. I look forward to working with you as we look together to advance our economic interests abroad. Thank you very much. [end of document]
All Remarks | Economic and Trade Policy | Secretary of State | Department of State |
