United States

Opening remarks

It's great to be in Detroit today and to be a part of this distinguished panel.

It was just about a year ago that we were all sitting around worrying about higher energy costs, global warming, healthcare costs, and the wars in Iraq and Afghanistan. And now we have a new term for those days. We call those the good old days. Because seriously about a year ago we fell into a financial crisis that's deeper than anything any of us have ever seen in our lifetimes. It really has disrupted lives. It's caused businesses to close. It's shattered economies. It's left all of us with an uncertain future. It's left a lot of us with questions as to how we get out of this crisis.

I'm here to talk about a couple of things we need to do to get out of this crisis and I'm going to start with increasing global trade. I think it's one of the greatest tools we have right now to get out of this crisis. Yet at the same time, we're seeing signs of protectionism. Now it's not uncommon during an economic crisis for countries to look inward and to put up barriers to protect jobs. There's a lot of pressure from the politicians to do that. A good example of this is the Buy American program we saw as part of the Stimulus Package. Fortunately the barriers got watered down quite a bit, yet they still sent a horrible symbol to the rest of the world. And it gives a lot of other countries cover for their own protectionist practices. So countries like China, Russia, France, you name it, we're giving them reasons to set up their own protectionist barriers, so not a good deal.

It risks decades of global transformation. We've seen tremendous prosperity in the last six decades due to the increase in global trade. We've actually seen a decrease in global trade over the last six months. Imports and exports out of the U.S. and into the U.S. have certainly dropped over the last six months. But even global trade in total is expected to be down eight or nine percent this year, which are numbers we've not seen in years and years and years. 

I don't think protectionism has done an awful lot of damage as of yet. But if we don't watch it, it will do a lot of damage and it'll change the trends we've seen in the past.

Since the global financial crisis has begun, 78 trade measures have been proposed or implemented by various countries. Some 66 of those are trade restrictions, so not a good trend. 

Let me give you a few facts as to why global trade will help lift us out of this crisis and why it's such a positive force. Fifty-seven million Americans work for companies engaged in global trade. One out of every five manufacturing jobs in the U.S. is linked to the expert of goods. An example close to home - at UPS, for every 40 packages that are imported or exported in and out of the U.S., it creates a new job at UPS. That is one example. Forty packages will create a new job at UPS.

Estimates say that growth in trade since World War II has added about $1 trillion a year, in 2003 dollars, to America's national income. And the estimates also say that if the world's remaining barriers are taken down, it'll add hundreds of billions of dollars to that total as we go forward. We've seen great success in global trade demonstrated by countries like China, India, Russia, Taiwan, Singapore, Chile and Korea. And even though China today is a single-party state, you now see freedom of information, freedom of movement - tremendous progress – and it's been brought about by trade and opening up China.

But we do have a big challenge in front of us in that we must create a system of trade that is fair, workable, rational, and compassionate. What could each of us do? We have to make the case in every way we can, in every possible forum that trade is a major force for good, for growth, and for jobs. We must argue from the head but also from the heart. And we're going to have to pay a lot more attention to those people who are displaced by trade. We have not done a very good job of that in prior years. A good first step was made with the return of the expired Trade Adjustment Assistance Act, which was part of the Stimulus Package. What was even better about that was the fact that beyond manufacturing we are also including service industries in that coverage. So that was a very important part of the stimulus bill.

While we help those displaced, we also can count on one of the most potent anti-trade arguments - that American jobs are being written off as a price of progress. You've got to remember though that the U.S. is still the leading manufacturer in the world and is the leading exporter of goods and services. The U.S. manufactures 25% of all goods right now. Regarding fair trade, it's critical the WTO must insist on fair trade between countries. 

A second point I'm going to talk briefly about, and it goes hand in hand with trade, is that our infrastructure must be improved to meet the demands of modern global commerce. Some countries have done a great job of embracing the future, and some are avoiding it. Unfortunately I think the U.S. is in the second group. Ports, waterways, rail capacities and highways are all pressing issues. The nation's infrastructure received a cumulative grade of D according to a 2009 report card by the American Society of Civil Engineers - a D. 

Here's another quick UPS example regarding congestion. At UPS, if our trucks in the U.S. are delayed five minutes a day due to congestion, it costs us $100 million a year. So five minutes a day costs UPS $100 million a year. You extrapolate that to the other fleets in the country and those are extraordinary numbers - 75 or 80 billion dollars. Also think of what it does to the environment, so it's a big deal. So we need to invest in the infrastructure.

We're encouraged by what we saw in the Stimulus Package. There certainly was attention paid to infrastructure, with a lot of money going to roads and bridges. I would have liked to see more going to air traffic control and rail, but you can't get everything you want. But there is a lot of money going to roads and to bridges. 

The final topic I'll talk about is trade today crosses borders - approximately 20% of business crosses borders. Now one of the things we've got to do in this world is get rid of this burdensome customs process. It is a slow process. It takes days and days and it slows the supply chain down. We've got to do a better job there. There's a lot of room for improvement. And some of the things that'll come out of the Free Trade Agreements are less customs and easier movement of goods.

To wrap up my talk here Eric, I want to say the global economy depends on global trade. It demands cooperation between countries for trade to grow. Besides helping us recover quicker from this economic crisis, one of the other byproducts of trade is less global conflict because when trade crosses borders, armies generally do not. So with that, I'm going to hand it back to you Eric.

Moderated Panel