Remarks by Assistant Secretary of Commerce Suresh Kumar, Taiwan Business Community Luncheon

OT-1114E | Date: 09/14/2011 | Taipei, Taiwan September 14, 2011 | (As Prepared for Delivery)

Assistant Secretary of Commerce Suresh Kumar in Taiwan Business Community Luncheon, Taipei, Taiwan September 14, 2011 (Photo: AIT Images)

Thank you very much for your introduction, Scott. I would like to thank our trade partners for hosting this lunch today: ASOA, The American State Offices Association, which consists of 12 member states, all of whom have been vital supporters of our National Export Initiative; the ROC-USA Business Council which continues to be one of the premier business advisors for U.S. companies looking to conduct business in Taiwan; the Importers and Exporters Association of Taipei and the New Taipei Importers and Exporters Chamber of Commerce, both leading business organizations that have helped facilitate introductions between U.S. exporters and Taiwan buyers; and the Discover America Taiwan Committee, which remains a paradigm for the U.S. Travel and Tourism industry here and in markets around the world. Welcome, everyone.

Let me by commend Taiwan for its strong and growing bilateral trade with the United States. Taiwan is one of our top trading partners and while it currently ranks as our ninth largest trading partner in the world it will likely become the 8th largest in 2011. We share a common interest in an ever-widening range of regional and global issues, from economic development to climate change, and from health to education.

Taiwan and American businesses share an affinity for each other, and we are here to support business aspirations for further collaboration and sustainable growth.

In 2010, U.S. exports to Taiwan increased forty-one percent making Taiwan not only one of our largest markets but also one of our fastest growing markets. About 500 US companies have a subsidiary in Taiwan.

While our trade relations are strong, the opportunities for further growth are immense. We see opportunities for more open public tenders, and liberalization and greater transparency in standards that can further increase market access. The U.S.-Taiwan trade relationship is very important and I hope that my visit will further strengthen the positive business climate and help explore and establish newer opportunities.

The U.S. has always been an innovation driven society that values and nurtures creativity. The bedrock of U.S. society is innovation. We gave the world mobility via the motor car and the airplane, and connectivity via the Internet and GPS. When the U.S. has invented the world has benefitted. American technology, products and services improve lives and livelihoods worldwide. This is why a cache of "Made in the USA" is valued more than one made anywhere else. The foundation for Taiwan's technology exports is the microchip and computer that were invented in the USA. Besides the inventiveness of our entrepreneurs and the productivity of our workers much of our innovation is owed to our world class universities, laboratories, teaching hospitals and our institutions of higher education. This is the reason why 27,000 students from Taiwan prefer the U.S. for studies over any other country at any given time: the U.S. is the most desired education location worldwide. In an era of global trade our commercial ties are deep and our economies are interdependent.

America's entrepreneurship and inventiveness, our ability to innovate, and our commitment to commercialize innovation by promoting free and fair trade provides technologies, products and services that improve lives and livelihoods worldwide. This is the reason why President Obama has called on us to out-build, out-educate, and out-innovate every other country on earth, even as we reinvest in strengthening our envied infrastructure.

The Administration is committed to laying the foundation for future success through policy mechanisms, such as a Research & Development tax credit that spurs innovation and creates employment, and others that influence common standards, increase predictability and reduce risk. Innovation is the foundation for sustainable competitiveness in the 21st century. It is how U.S. companies and our products and services can reach the 95% of consumers who live outside our borders. Winning the future requires increasing investment in research and development. This is why the Administration has set the goal of investing a full three percent of our GDP into research and development. Through the American Jobs Act that President Obama proposed to the U.S. Congress last week all businesses will be able to write off the investments they make in 2012.

Global trade and commerce are the foundation for an inter-connected world and innovation in the U.S. and inventive U.S. entrepreneurs means better access to our products, services and technology that improve lives worldwide.

Global trade policies must encourage and nurture innovation, protect intellectual property rights, and influence our trade partners to resist imposing local content and indigenous innovation requirements that impede innovation and deprive their consumers of access to superior technologies, products and services.

Both our economies play an important role in the broader Asia Pacific Economic Cooperation (APEC) organization, which has a goal of advancing prosperity and sense of community in the Asia-Pacific region. According to some estimates, APEC economies have generated nearly 200 million new jobs and seventy percent of the overall global economic growth during the past decade. APEC has now become the primary regional vehicle for promoting open trade and practical economic cooperation in the region. APEC and Taiwan have also worked hard to improve the promotion, protection and enforcement of intellectual property rights.

APEC’s mission aligns with the Obama Administration’s goal to move forward on tangible initiatives that build a “seamless regional economy” by achieving outcomes in specific priority areas: (1) strengthening regional economic integration and expanding trade; (2) promoting green growth; and (3) expanding regulatory cooperation and advancing regulatory convergence.

President Obama announced the National Export Initiative in 2010 with the goal of doubling U.S. exports in 5 years. Through the National Export Initiative, the U.S. & Foreign Commercial Service, the organization that I am privileged to lead, assists U.S. companies in expanding their global footprint to reach more customers worldwide. Our network of offices includes locations in 108 U.S. cities and U.S. Embassies and Consulates in more than 75 countries.

Last year, the Commercial Service assisted 18,000 U.S. companies in their exporting endeavors, of which 16,000 were small -and medium-sized firms. As a consequence 5,600 companies exported for the first time or increased their exports overseas; 85 percent of these were small and medium-sized businesses.

Altogether the Commercial Service helped U.S. businesses post over 12,300 export successes or transactions in 2010. Taiwan contributed almost one of every 12 export successes last year. Every $1 invested in the Commercial Service last year returned $135 to the American taxpayer by way of facilitated exports. Last year U.S. exports of goods and services grew 17% vs. 2009 which is better than the 15% compounded annual growth rate required to double exports within 5 years. Exports contributed nearly half of the 3.0 percentage point growth in real GDP in 2010. The $1.84 trillion total in exports of U.S. goods and services last year represents the second-highest annual total on record.

Here in Taiwan, the U.S. Commercial Service at the American Institute Taiwan has ranked at the top within the Commercial Service for number of export successes over the last several years and has taken a proactive lead in promoting the NEI. Last year alone we recorded nearly 1000 export successes valued at $233 million and this year we are on track to do even better. The AIT Commercial Section, both here in Taipei and in Kaohsiung, have stepped up our efforts through the very partnerships represented in this room: together we will seek every opportunity to advance our mutual interests and engage our offices to work together for the good of the Taiwanese business community.

You, our partners and Taiwan businesses and importers are the foundation of our strong trade partnerships that are vital to the prosperity of U.S. and Taiwan business community. By partnering with the US&FCS International Buyer Program, over 40 Taiwan businesses were represented at the National Association Broadcasters trade show in Las Vegas earlier this year where they signed over sixty purchase or agency agreements valued at over $2 million U.S. dollars.

The commercial team has also worked to increase U.S. business participation in USA pavilions at trade shows here in Taiwan. Our companies showcase their innovative products and services and see firsthand the market opportunities in Taiwan. To capitalize on these opportunities and further assist Taiwan buyers a representative from the U.S. Export-Import Bank will be visiting Taiwan to promote financing options such as loan guarantees to help Taiwan buyers of U.S. goods and services.

The U.S. has always been the sought after location for Taiwan students seeking higher education. Last year there were nearly 27,000 students from Taiwan studying in the United States, making Taiwan the fifth largest source of foreign students studying in the United States

There were nearly 300,000 visitors from Taiwan who traveled to the United States last year for business and tourism contributing over $1 billion to the U.S. economy. These are remarkable statistics for an island of 23 million people and highlight the strength of our relationship. We welcome visitors from Taiwan. Please continue to visit the U.S. and discover the spectacular natural beauty from “sea to shining sea.” Whether on business or a dream vacation, the U.S. has much to offer any visitor.

The Obama Administration is committed to opening more markets. The expanding global middle class is expected to add over a billion new consumers over the next 15 years. Taiwan’s interest to increase its purchase of U.S. products is a win-win scenario. Taiwan has proven that establishing a free and open trading regime is the recipe for generating economic benefits for both sides. The robust growth in our bilateral trade creates a broad range of opportunities in the logistics and manufacturing sectors.

To further enhance our competitiveness and provide opportunities for our trading partners, the Commerce Department recently launched SelectUSA, a new program to mobilize our ambassadors, our state governors, state officials, and our federal government to attract more investment to America. Foreign direct investment helps sustain innovation in the U.S. and provides those who invest in the United States access to the most productive workforce in the world and a gateway to over 600 million people in the U.S. and in 17 countries with whom the U.S. already has FTAs. There are excellent reasons to invest in the United States. The U.S. has always been open to foreign direct investment and welcomes foreign firms to participate in our economy. I encourage you all to take a look at the numerous investment opportunities available in the USA.

Doubling exports requires us to help exporters enter more markets, influence more companies to export, and to ensure our trading partners’ compliance with trade agreements currently in force to help U.S. companies increase sales. We help create trade relationships on both sides of our borders so as to encourage mutual business growth. This is what the Department of Commerce does – we help connect U.S. companies to market opportunities, encourage companies to export, and work to ensure compliance with trade agreements.

Please let me make this point very clear — economic partnership between United States and Taiwan businesses are here to stay. Both sides are committed and eager to work together and write new and prosperous chapters in our commercial relationship. The growth of U.S. exports to Taiwan is inspiring. U.S. exports of $26 billion, on a per capita basis to Taiwan, is among the highest in the world. While the President has called for doubling U.S. exports between 2009 and 2014, we believe Taiwan can lead the way and we have the potential of trebling our exports during this period.

There are many positive aspects of the relationship between the people of Taiwan and the people of the United States, including our shared democracies, close cultural, security and academic ties, and of course our ever-increasing economic and commercial cooperation. There are challenges ahead, but the opportunities to grow together are even greater. I encourage all of you to continue to work with us to realize the full potential of these opportunities. I know that our US&FCS in Taiwan will provide you all the assistance you need to further enhance your business with U.S. companies. I also hope the people of Taiwan continue to look to the people of the United States as friends, and to U.S. businesses as inventors and partners in our shared goal of creating prosperity through trade.

Thank you for having me here with you today.