Secretary of Commerce Penny Pritzker made a speech to the Los Angeles World Affairs Council on Thursday about the untapped potential for export markets for US companies, and the new plans the Commerce Department has to encourage more overseas trade and investment. “Let me be clear: if you are an American business, the time is now to consider selling your product or services abroad.”
Pritzker, whose great grandfather emigrated from Russia, also made a strong plea for Congress to pass immigration reform, which she said was “a moral as well as an economic issue”, and would expand “the high skilled worker programs that our businesses need to grow”.
US exports increased by $600 bn between 2009 and 2012 to a total of $2.2 trillion – but still only account for 13.5% of our GDP (China’s export ratio is double, and Germany’s ratio is four times the US rate). Only 1% of US companies export their products, and of those, 58% export to just one country – usually Canada or Mexico. The figures show that companies who export to more than one country increase their sales exponentially.
Following this logic, Pritzker announced her new "Look South Initiative", aimed at encouraging US companies to look at markets in all 11 Latin American countries with whom we have free trade agreements – Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama and Peru. She pointed out that in Colombia’s case alone, since Washington signed a free trade pact last year, US exports to that country have doubled. “These 11 economies are fast growing, with diverse industries, young populations – and each has a burgeoning middle class… Most importantly, businesses, governments, and consumers in these countries want the high-quality goods and services that our companies offer.”
Pritzker, who was appointed as Commerce Secretary last June, comes from the very successful Pritzker family, who founded the Hyatt hotel chain amongst other investments. 11 members of the Pritzker family are listed on the Forbes 400 billionaire list – Penny Pritzker herself was ranked #252 with a total net worth of $2.2 bn. She brings with her 25 years of business experience in the private sector to her new job at the Commerce Department.
Noting that there are ongoing talks with some Asia-Pacific countries including Japan, Singapore, Australia New Zealand and Vietnam under the so-called “TPP” framework, as well as a parallel set of negotiations over a free trade agreement with the EU, (helpfully and memorably acronymed as the “TTIP”), which together would cover 60% of world GDP, Pritzker hailed the value of inwards investment to the US. “More than ever before, global firms are looking to expand in the United States for a number of reasons: our rule of law, our intellectual property protections, our stable financial markets, our universities, our enormous consumer market, low-cost and abundant energy and most importantly, the ingenuity of our people.”
To read the LA Times coverage of our event with Secretary Pritzker, click here.