Remarks by Francisco Sánchez, Under Secretary of Commerce for International Trade

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National U.S.-Arab Chamber of Commerce
Monday, February 7, 2011
Washington, D.C.

As prepared for delivery

Thank you so much for inviting me to speak today.  The Middle East and North Africa region has been one of my priorities in my first year as Under Secretary of Commerce for International Trade.

I have been to the MENA region three times in the past 18 months, and I share the optimism expressed in NUSACC’s Economic Outlook that the MENA region holds great potential for U.S. exports in 2011 and beyond.  I am as optimistic as NUSACC’s economic outlook for 2011 and the road ahead.

I would like to thank David Hamod, you and this organization for your tireless efforts to promote trade and investment between the United States and the MENA region.  Today I’ll spend some time speaking about President Obama’s National Export Initiative and about the U.S. bilateral trade relationship with the region.

Before I do, I would like to acknowledge and welcome His Excellency Mr. Ali Aujali, Ambassador of Libya to the United States;

H.E. Mrs. Hunaina Al-Mughairy, Ambassador of Oman to the United States;

H.E. Mrs. Houda Nonoo, Ambassador of Bahrain to the United States;

H.E. Mrs. Alia Hatoug-Bouran, Ambassador of Jordan to the United States; and

H.E. Mr. Aziz Mekouar, Ambassador of Morocco to the United States.

We will have in attendance the ambassadors from all of our Arab FTA partners.  This kind of co-operation is why we should all be optimistic about the future.  Change is afoot throughout the region, and nothing can safeguard the region more so than economic progress.  Thank you all for being here, excellencies, and thank you for working together for a common future.

The National Export Initiative has put trade promotion at the top of the U.S. government’s agenda.  President Obama set the doubling of our exports by 2015 as our main goal.  The International Trade Administration is leading many of the NEI’s components.

We are focusing on promoting trade, counseling American companies on overseas opportunities, opening markets through trade missions and other promotional events, helping to eliminate trade barriers, and ensuring that foreign business environments are transparent and equitable.

The MENA region is important to the NEI.  Our January-November 2010 exports of goods to the 17 Arab countries of MENA and the West Bank and Gaza were $44 billion, up from $40 billion for the same period in 2009. Our leading export markets in the region were the U.A.E and Saudi Arabia. Based on this data, we expect that U.S. exports to these countries for 2010 will be $48 billion.

Those kinds of trade numbers keep me on the road.  Since January 2010, I have had the opportunity to travel throughout the Middle East, accompanying missions to Algeria, Libya, Saudi Arabia, Qatar, and Iraq.  I led two trade missions to Saudi Arabia in 2010, one focused on healthcare and the other focused on energy and infrastructure.  And I am not alone.

Assistant Secretary for Market Access and Compliance, Michael Camuñez, will travel to Saudi Arabia, the U.A.E., and Qatar in March.  Commercial Service Director General Suresh Kumar will lead a trade mission to Morocco, with a spin-off to Tunisia, in early April.  Another trade mission to Saudi Arabia focused on the ICT sector will also take place in April.

Lastly, Secretary Locke will lead a transportation and infrastructure mission to the U.A.E. and Qatar in June 2011.  I hope and trust that some of you will go with us.

So we are not an Administration that is standing still.

We continue to align our trade promotion resources and listen to American businesses about problems they face in global markets.  We all have a lot of work to do.  As the global economy and international trade recover, the U.S. government will have aligned its resources to better serve the American exporting community and to achieve the NEI’s goals.

The U.A.E., Saudi Arabia and Qatar, in particular, will continue to play a central role in our NEI efforts, both in terms of their own market and their position as international business hubs.

From 2000 until 2009, our total trade in goods with the U.A.E. increased by more than 300 percent.  Despite the global economic slowdown and the drop in global trade, including a downtick in U.S. – U.A.E. trade, we continue to run a high trade surplus with the country.

While oil and related industries still play a vital role in the U.A.E., the country’s leadership long ago decided that its future and that of its people lie in a diversified economy.  The government’s diversification efforts are evident in the country’s strategic move into civil nuclear power.  This program will help create high-paying jobs for local Emiratis – and numerous export opportunities for American companies.

The U.A.E.’s diversification can also be seen in its efforts to develop IT and rail technologies and to build the world’s first carbon neutral city, Masdar.  Yet, money for chips, rail and solar does not automatically generate a return.  These expenditures only become sound investments when they are managed by the right people with the right knowledge.

The U.A.E.’s work to improve its educational system demonstrates that its leaders understand this notion.  All of the U.A.E.’s diversification activities expand its economy, create better employment opportunities for its population, and generate export opportunities for American businesses.

As the U.A.E. continues to diversify and distinguish itself as a global business hub, the International Trade Administration will do all it can to help American exporters enter and expand in the market.  This will include our efforts to highlight the country’s trade opportunities, offer products and services that can help American companies find success in the U.A.E.

The U.A.E. is in our sight, and so is, of course, Saudi Arabia, the largest economy in the Middle East with the world’s largest oil reserves.  The Saudi government plans a massive infrastructure investment of more than $400 billion in the next 10 years to diversify the nation’s economy and to create a knowledge-based economy focused on education, technology and financial services.

In 2009, Saudi Arabia imported $10.8 billion in goods and services from the United States and was our 20th largest market worldwide.  From January-November 2010, Saudi Arabia imported $10.4 billion in goods and services from the United States, and American companies have operated successfully in Saudi Arabia for almost 70 years and are market leaders in many sectors. However, you know better than me the increasing competition we face from Asian and European countries.

Saudi business leaders are concerned that American companies are lagging behind European, Chinese and Korean companies in taking advantage of numerous business opportunities in the kingdom.  The Saudis realize that they can expect little or no technology transfer from the Chinese and that U.S. companies are much more attuned to the “win-win” philosophy of international trade. We are doing what we can to help.

As I mentioned, I led trade missions to Saudi Arabia last year and the Commercial Service is planning another trade mission in April to introduce U.S. suppliers to information technology and communication products and services to potential buyers.  Saudi Arabia is the largest IT market in the Gulf, estimated at $3.7 billion in 2010.  I urge you to join this trade mission.

During the December 2010 mission we learned that Saudi Arabia needs 35-40 gigawatts of total energy by 2020, and civil nuclear will account for a significant portion.  The Saudi Electric Company said they are looking for more U.S. industry participation, and they plan to invest $80 billion over the next several years.  The Ministry of Water and Electricity informed us that French businesses currently dominate the Saudi water sector, but there is room for American companies to compete.

As a result of the trade mission, the delegates developed more than 60 sales leads, and they have $25 million in pending contracts.

Finally, let me say a few words about Qatar.  U.S. commercial engagement with Qatar will become increasingly important in light of Qatar’s successful bid to host the 2022 World Cup.  Talk about a ball dropping out of the sky.

Qatar is expected to spend nearly $65 billion to prepare to host the games.  Additionally, Qatar’s recently announced development plan includes nearly $120 billion spent during the next ten years in transport infrastructure projects including roads, ports and rails. Qatar has abundant available capital and is preparing to spend on a wide range of industry sectors including health and medical, housing and real estate and sanitation projects.

Most of you in this room already have travelled to the MENA region, and you operate in the global marketplace.  However, the Commerce Department is here to assist you to take full advantage of international export opportunities.  Our domestic U.S. Export Assistance Centers or U.S. Commercial Service posts overseas can provide you market research information.

These offices act as ITA’s frontline, keeping watch over market trends and trade shows that can generate sales for your business.  Their objective is to find export opportunities for American businesses, and they may be able to share insights on a market or trade show that you or your organization just have not had the time to research.

Through our U.S. Commercial Service, we provide products and services that can be tailored to meet an American company’s export needs.  These may be basic or in-depth market research, background reports on potential agents or distributors, or tailored promotional events.

In Washington, in addition to marketing these trade promotion efforts, we also spend much time resolving market access cases for American companies.  These market access cases arise when there are regulatory, technical, or other trade barriers that hamper an American company’s ability to succeed in a market.

Our Market Access and Compliance section works with private industry, our embassies overseas, and others to develop strategies to resolve these cases through bilateral discussions or in wider global settings such as the WTO.

By working with countries to further improve their trade policies, our Market Access and Compliance office helps create a level playing field that then feeds into a better environment for our Commercial Officers to do trade promotion.  One cannot be done without the other, and I urge you to work with ITA’s Commercial Service and MAC colleagues to find opportunities and overcome barriers.

I have not made my last trip to the region, and many of you are planning to travel there.  We might be going at separate times or, perhaps, on the same trade mission.  But whether we travel separately or together, we are on the same road to progress that hopefully makes prosperity and security in the region commonplace.

Thank you again, David, your excellencies, and all of you for being here today.  I look forward to working with all of you.

http://trade.gov/press/speeches/2011/sanchez-020711-2.asp