Monday, April 26, 2010
US Envoy
Addresses the American Chamber of Commerce
Ambassador
Carlos Pascual
Monterrey, Mexico
(Transcript)
It is a pleasure to speak before the Monterrey Chapter
of the American Chamber of Commerce in Mexico. For over 93 years, the AmCham has worked successfully to promote trade
and investment between our two nations. You were a key supporter of the NAFTA accords. You have had a tremendous
impact on Mexico's economy and in the lives of workers: AMCHAM companies account for nearly 70% of foreign direct investment
in Mexico. Approximately 30% of Mexico's workforce is employed directly or indirectly by AMCHAM member companies.
I commend the AMCHAM in Monterrey and its 392 members
for your work in promoting shared business values and ethics in a globalized and interdependent economy. You have
served your membership well.
Monterrey is at the fulcrum of the economic integration
between the United States and Mexico. You are proof positive that our futures are inextricably linked. This shared
destiny calls for closer cooperation as we work side by side to be competitive, together in North America, in this intense
era of global economic cooperation. This cooperation requires that we in government work with you in the private sector
to provide the right regulatory and other governmental frameworks that facilitate business growth. Most of you in the
private sector have already started this integration. Our governments need to learn from this and move forward with
you.
Last week, I met with some of you here with Transportation
Secretary LaHood to talk about our joint transportation agenda. Both he and I were particularly struck by
the story we were told about Caterpillar’s competitiveness. Production at Caterpillar is bouncing back due to
growing demand for its equipment in Asia and South America. We know that commodity demand in Asia is ahead of the overall
world recovery, so mining centers in China, Chile, and elsewhere are buying heavy machinery. The way that Caterpillar
can meet this demand is inputs from Mexico that make its U.S. manufactured products globally competitive. This Illinois-headquartered
company is currently deriving its growth from global sales, and it is more competitive globally precisely because it produces
here in Mexico. But let’s look beyond this one company and sector.
Mexico is projected to grow at about 4.0% in 2010,
thanks primarily to a growth in external demand. As Mexico’s largest trading partner, much of Mexico’s expected
recovery will be due to the revitalization of the United States economy which grew at 5.6% in the first quarter of 2010.
To keep that process of recovery going, in February,
President Obama launched the historic National Export Initiative to double U.S. exports over the next five years and support
two million new jobs. My colleague Ro Khanna from the Department of Commerce is here today and can talk to you more
about this. To achieve the President’s ambitious goal, U.S. companies must find new markets overseas and
compete more effectively in the global economy. But exports are not a one-way gain. U.S. products bring an injection
of technology and greater efficiency—like the 14 small-scale GE turbines that operate with 50% greater efficiency to
generate power for Mexico City.
This message of two-way gains was central to the visits
of U.S. Trade Representative Ron Kirk and Export–Import Bank (EXIM) Bank President Fred Hochberg when they came in February.
Already EXIM does over $7 billion a year in business in Mexico. To expand that further, we signed a $1 billion Memorandum
of Understanding with Banobras to support infrastructure development. We want your advice on how to channel more of
this financing to SMEs.
Unfortunately, not all the issues before us are rooted
in economics. Today, perhaps the biggest threat to our shared economic success is the increase in violence linked to
organized crime. I had a chance last month to participate in the presentation of the AmCham security study. I
have a sense for the ways in which violence and instability have increased the cost of doing business. I was struck
by how many businesses identified the lack of dependability of the justice system as a key problem—because it means
criminal organizations can act with impunity. Unchecked, violence and instability could cause corporations to rethink
their business strategy of locating in Mexico.
The violence in Mexico spawned by organized crime
also has a human cost. In the past there has been a wide-spread view that many individuals and communities could continue
in normal patterns of life unaffected by this violence. That is no longer the case, as the recent deaths of two students
in this community, at the Tecnologico de Monterrey have shown. And this is no longer the case, as the recent deaths
of three people affiliated with the U.S. Consulate in Ciudad Juarez have shown. You also know it is not the case because
drug trafficking organizations have expanded their lines of operation: to extortion, robbery, and kidnapping—threats
well known to this city.
Still, these are threats that we can overcome—and
we have overcome them—in New York, Los Angeles, Atlanta, Miami, and New Orleans. That does not mean drug trafficking
and consumption will disappear, but we can make it a concern of law enforcement agencies, and not a threat to national security.
It was to set this evolving agenda of cooperation
on security that Secretary of State Clinton, Secretary of Defense Gates, Secretary of Homeland Security Napolitano, Director
of National Intelligence Blair, Chairman of the Joint Chiefs of Staff Mullen, Deputy Attorney General Grindler, DEA Administrator
Leonhart—and others—came to Mexico on March 23. Our agenda must evolve because we must stay ahead of the
cartels and their ability to innovate. We have expanded beyond focusing on the heads of drug trafficking organizations—though
make no mistake we still maintain them in our sights—to attack these entities as corporations: their production, imports,
marketing networks, and money flows. We are investing in Mexican institutions to sustain the rule of law—the federal
police, the judicial system—and we now must start work on a sustainable model of state and municipal police. We
have forged a new vision for the border that will advance both our security and economic competitiveness. And we will
focus on supporting socio-economic investments in cities, starting with Ciudad Juarez, to offer youth an alternative to a
world of drugs and crime.
Our efforts are building new capacity to combat organized
crime. Here are some examples:
- Better channels to share intelligence
- Vetted
Mexican units to undertake sensitive operations
- 5,500 newly trained federal police and a functioning police academy
- 5
Bell helicopters increasing the mobility of military forces
- Scanners, X-ray machines, and other non-intrusive inspection
equipment for ports of entry
- A Spanish-language electronic tracing system to track captured weapons that has increased
traces from 37,000 last year to more than 46,000 this quarter, and
- 107 extraditions to the United States in 2009
of criminal elements.
These channels of cooperation are producing results,
such as:
- The capture of Arturo Beltran Leyva (December
2009), Carlos Beltran Leyva (December 2009), and Eduardo Teodoro Garcia Simental (El Teo, January 2010)
- The arrest
of 303 presumed members of La Familia Michoacana in the United States in October 2009, part of 1,186 arrests over 44 months
- The
arrest of 750 individuals in the United States associated with the Sinaloa Cartel in February 2010, and
- The freezing
of the accounts of 54 members of the Zeta and Gulf Cartels in March 2010.
These are examples. There will be more.
But they are not the only solution to the threat of organized crime. We must move just as steadfastly on the positive
side of our agenda—to create a climate of prosperity. And that is one of the reasons we redouble our efforts to
increase the net competitiveness of the U.S. and Mexican economies. Our ability to compete in global markets will create
jobs and sustain the capacity of our nations to keep our citizens secure. But to succeed, we must be able to compete—so
let’s look at this agenda as well.
Let’s take intellectual property.
According to the World Economic Forum, the world’s 20 countries perceived as having the strongest intellectual property
protection were among the top 27 countries in growth.
If North America is going to compete against Asia,
we must promote innovation and investment in technology and human capital. Respect for intellectual property rights
enforcement is crucial to this goal, and I know the Calderon Administration is committed. A strong IPR regime encourages
innovation, the development of new industries, and robust national economic growth. Mexico needs this if it is going
to succeed in the 21st century. In this regard, we are actively working with our Mexican partners. We have conducted
training programs for Mexico’s customs officials, prosecutors, and judges, providing these authorities with the necessary
tools to protect and enforce intellectual property rights.
This collaboration has paid off. Last year,
Mexico’s customs authorities seized an unprecedented 2,000 tons of counterfeit goods; almost half of these products
were seized by officers who participated in one of these training programs. In addition, Mexico’s judicial system
imposed the longest prison sentence on record in Mexico for crimes against intellectual property – six and a half years.
Earlier this month, Mexico’s Congress passed
legislation granting its public prosecutors the authority to pursue cases involving violations against intellectual property
rights without a prior complaint from the right-holder. The United States government will work with Mexico’s prosecutors
to ensure that they have adequate resources to use this new weapon to protect Mexico’s future.
But more needs to be done on a very personal level.
How many counterfeit handbags are in this room? How many of you use counterfeit software in your business? Who
has recently watched a pirated DVD movie or bought your kid an unlicensed video game DVD? Fighting IPR violations is
about more than just laws and policy. It’s about respecting and supporting a culture of lawfulness. Let’s
all do our part at home and in the office.
When we talk about competitiveness, we have to talk
energy. Promoting clean energy and addressing climate change are top priorities for both Presidents Obama and Calderon
and bilateral cooperation on these topics has been a core item on the agenda every time they meet.
Increasing investment in technology and research and
development to create new products, with a particular emphasis on green technology will place us at the forefront of this
emerging industry, which encompasses renewable energy, energy efficiency, and climate change issues.
Our bilateral cooperation on this most important facet
of bilateral relations got a significant boost with the announcement of the Bilateral Framework on Clean Energy and Climate
Change during President Obama’s first visit to Mexico April 2010.
Ultimately, supporting clean energy and climate change
initiatives between our two countries not only creates a cleaner environment, it fuels job creation and innovative research
and development in both our countries that allows our environmental industries to remain at the forefront of the world.
For example, last year, the Export –Import
Bank (EXIM) provided an $ 80 million direct loan to Clipper Windpower in Carpinteria, California to export 27 2.5 MW wind
turbines to Mexico. The sale is keeping workers employed at Clipper and may lead to job growth at the company.
It is the first export of Clipper’s wind technology outside the US and is also the first EXIM project financing a wind
power transaction and the first large US wind technology sale in Latin America – the first of what we hope will be many.
Climate change does not recognize borders, and that’s
why we also have to think globally. Under President Obama’s leadership, the Administration is working with the
U.S. Congress to pass comprehensive energy reform legislation to address the serious economic and strategic risks associated
with over-reliance on fossil fuels and their effects on global climate.
President Calderon has provided great leadership on
climate change, establishing an aggressive goal of reducing greenhouse gas emissions by 50 percent by 2050. Mexico will
host COP-16 in Cancun in late November this year. This will be a singular opportunity to demonstrate Mexico’s
leadership on what is, in my opinion, the most important global issue of our generation: saving the planet. That’s
not hyperbole, that’s scientific fact. And our two governments are committed to each other, to our NAFTA partner
Canada, and to the world community, to ensure we get this right. There aren’t many second chances on the horizon
on climate change. So I encourage you in the AmCham to be a part of the solution, too.
The border we share is an ever present reminder of
the many security challenges we face, but also the great opportunities for turning the border into something that facilitates
trade, not restricts it. On recent visits to Mexico City, Secretaries Napolitano and Clinton added their voices to yours
in calling for the development of a truly 21st century border. And that is what we are doing--increasing efficiency
by investing in border infrastructure and North American transportation networks. It’s clear to all of us that
we need to do this to keep pace with increasing cross-border trade, up 300% since 1994. One good start is progress on
new ports of entry. In December, we opened the Anzalduas Bridge, the first new border crossing in ten years. We
expect to open two more crossings in 2010, San Luis II linking Sonora and Arizona and Rio Bravo-Donna between Texas and Tamaulipas.
To expand our trade relationship, we must explore
innovative pilot projects that could reduce border congestion by enabling customs and agriculture inspectors to inspect shipments
in commercial zones away from the border and allow pre-inspected containers to move quickly past the border in secured corridors.
The U.S. and Mexican Secretaries of Transportation, when they met here in Monterrey last week, agreed to deepen cooperation
on multimodal corridors. Whether it’s a shipping container landing in Lazaro Cardenas or a Maytag refrigerator
manufactured in Reynosa, our focus must be on streamlining the broader network that moves the product to a storeroom floor
and prospective purchaser in Topeka or St. Louis.
The Obama Administration recognizes that resolving
the ongoing cross-border trucking dispute is absolutely fundamental to facilitating a more efficient flow of goods.
Again, when Secretary LaHood was here last week, he reviewed the status of the cross-border trucking issue with Secretary
Molinar. His staff was working hard on a proposal to resolve the issue. Both sides agreed to establish a working
group to review the proposal once we can share it. I hope I can have more news on this for you soon.
Additionally, to ensure continued competitiveness,
we must work together to develop common, science-based regulations and standards. Mexico, Canada, and the United States
have asked our regulatory agencies to identify concrete areas where we could work with our NAFTA partners and reduce unnecessary
regulatory differences.
As a first step, SENASICA and USDA's Food Safety and
Inspection Service will create a common framework for the auditing and inspection of meat packing facilities later this month.
The U.S. Customs and Border Protection is working with Mexican Aduanas to harmonize and simplify the information shippers
will need to provide to each country in order to facilitate merchandise crossing through the Ports of Entry in both directions.
We hope to continue to reduce the costs of complying with different standards and regulations in food safety and customs operations,
which will perhaps pave the way for comparable regulations in other sectors such as the automotive industry and renewable
energy.
When we talk about increasing our competitiveness,
the promotion of a culture of entrepreneurship should be a top priority. In the United States, as you all know, jobs are largely
created by small and medium sized companies. But those companies need access to financing and credit. Events
such as the Monterrey Venture Capital Conference in a few days will serve to propel this culture forward in Mexico, to the
benefit of both of our nations and our trade relationship.
To make sure that economic prosperity reaches all,
it is important to expand the reach of financial services. This involves such important initiatives as promoting secured
transaction reform, increasing small and medium enterprises access to credit, and encouraging the use of the EX-IM Bank to
finance physical infrastructure projects.
Finally, let me say a few words on immigration: this
continues to be a priority for President Obama and his Administration. The President was pleased to see that Senators
Schumer and Graham have produced a promising, bipartisan framework which can and should be the basis for moving forward.
It thoughtfully addresses the need to shore up our borders, and demands accountability from both workers who are in the United
States illegally and employers who game the system. The White House indicated its commitment to work with Congress to
forge a bipartisan consensus this year so we can continue to move forward on comprehensive immigration reform.
We were also pleased to see Senator Reid’s
statements that he intends to move a bill forward. Fixing the immigration system is consistent with our economic priorities
– it is tough to imagine building the robust economy of the future on the framework of a broken immigration system.
We will press ahead and work with anyone in Congress willing to be a partner on this effort.
We are advancing all of these themes in light of President
Calderon’s visit to Washington on May 19. We hope that our cooperative efforts in protecting innovation, creating
a 21st century border, making our regulations more compatible, and investing in a sustainable future will result in making
our two countries more competitive and contribute to Monterrey’s, and Mexico’s economic growth.
Monterrey is a great city, and has so many unique
competitive advantages besides its geographic proximity to the United Sates. The recent KPMG study, "Competitive Alternatives,"
cited the city as the most cost effective of the 112 cities surveyed in 10 countries for production of aircraft and auto parts
manufacturing, medical devices, pharmaceuticals and telecom equipment. It also ranked first as the most cost effective
for biomedical R&D, IT services, software design, and web and multimedia development - all key factors in our evolving
21st century world economy. The 2010 World Bank "Doing Business Survey" moved Mexico to 51st best place to do business
place worldwide, up four spots from its 2009 ranking, indicating continued overall progress.
However, challenges remain. In the same World
Bank survey, Mexico placed 90th of 183 economies in ease of starting a business. The state of Nuevo Leon dropped from
Mexico's 3rd easiest state in which to do business in Mexico in 2007 to 12th in a 2009 World Bank survey. And you have suffered
greatly as cartel-on-cartel violence has spread throughout Nuevo Leon in the past 2 months.
When President Calderon visits the United States next
month, he will likely emphasize to President Obama that Mexico and the United States are strategic partners. President
Obama shares that view. When President Obama came to Guadalajara in August 2009, he and his Canadian and Mexican
colleagues agreed: “Our integrated economies are an engine of growth”. I believe our destinies
are intertwined, both in terms of the security of our peoples and institutions as well as our economies. Our common
prosperity is at stake today. It depends on our capacity to change and innovate, and Monterrey is in the center of this
change. You’ve already begun the transformation of Mexico and its relationship with the United States. I
look forward to working with you to strengthen that relationship as we move forward.
——————————
Monterrey Chapter, American Chamber of Commerce in
Mexico, April 20, 2010; Consulate General of the United States, Monterrey, Mexico
