President’s Export Council Meeting

President’s Export Council Meeting


Chairman McNerney: Okay,
welcome, everybody. Someone stole my gavel. I hope that’s not a
message for me and Ursula. Vice Chair Burns:
I didn’t take it. Chairman McNerney:
Yo didn’t take it? Okay. I thought you had it in
your plan to go to Poland with it or something. Listen, again,
seriously welcome. Since we met — since we
last met in September, the team’s work has continued
on a lot of fronts, and it will be reflected in a
record number of letters that we will
discuss later today. So we do have
a lot to cover. The President is expected
to join us within the hour or so. I’m looking at
Valerie — not or so. Yeah, the ‘or so’
part was emphasized. We’ve dealt with this
before, we can do it. So the strategy is going
to be just plow ahead, and when he walks in we just
stop and pretend as if we’ve been waiting for
him for the last hour. (laughter) We engage, and for those
of you that are new, you will have no
trouble engaging with our President on issues that
are of importance to us. He expects it
and asks for it. So why don’t we
just jump into it. Ursula, do you
have any comments? Vice Chair Burns:
Just some quick ones. Chairman McNerney: Yep. Vice Chair Burns: I think
this meeting is, as most of them are, timely. The Administration
is actually making significant progress —
I call it firing on all cylinders — on the trade
agenda in the past year; it’s really great to see. Secretary Pritzker has
been an amazing partner, and Congress in general
has been an amazing partner. And I welcome and we
welcome the NEI/NEXT Initiative that I think
the Secretary will talk a little bit about. We think it is time for us
to redouble our efforts since we — and
adjust our strategy since we probably will miss our
doubling exports by 2014 goal, but that should not deter us
too much from pushing hard to the next level. We have a lot of barriers
that Congress knows about. My industry in particular,
we are facing a barrage of proposals to block
cross-border information flows and data flows. And this is, I think, the — a new area that Congress
is helping us on, and making sure that we make progress. And I think that Virginia
Rometty of IBM will cover that a little bit later. On the government side,
we’ve continued to fight all of the natural and
unnatural resistance to opening borders to trade,
and just keep pushing. So I am please with the
progress that we’ve made so far, really pleased
with the partnership that we have with the Commerce
Department and the USTR, and all the agencies to
help us push through. Thank you so much
for the work. Chairman McNerney: Okay,
thank you, Ursula. And before turning over to
the Secretary, I’d just like to offer a comment. Loretta, where are you? Loretta — for those of
you that aren’t aware, Loretta Schmitzer, this
is the third PEC she’s staffed over the
last 20 years. Okay. In this incarnation
supporting me from a Boeing organizational
perspective, but she was also part of
Commerce Department for staffing one of the PECs, and so 20
years of PECs and she’s retiring. So I just wanted to
recognize Loretta’s efforts. (applause) We will miss you Loretta. Valerie, do you have
a couple of comments? Valerie Jarrett:
Thank you, Jim. Good morning, everyone. It’s a pleasure
to be here. Of course I want to be
here as always by thanking both Jim and Ursula
for their leadership of this extraordinary board. Many of you have been here
since the beginning, and so I think you’d agree
with me that this has been productive and
constructive, and a good example of the private-public partnership that is so important. In this year’s State of
the Union, the President said this is going
to be a year of action, and it has certainly been. And the actions that we
have taken have been informed by the advice
and counsel that we’ve received from
so many of you. I do want to mention there
are a couple of new folks to the table since
our last meeting. The President’s Cabinet Secretary Broderick Johnson down at the end. Broderick, wave so
everyone says hello to you. Who helps coordinates all
of the Cabinet’s functions through the White House. And also our new
administrator for SBA, Maria Contreras-Sweet. Maria, wave to the crowd. And not new to the table,
but in a new capacity, Jeff Zients, who you
all know now is the President’s director of the Council on Economic Advisors, right? National — I knew
I got it wrong. As soon as I said it, I
said that sounds an awful lot like Jason’s — that
sounds like Jason’s title. The NEC, National
Economic Council. And you’re going to be
hearing from him shortly. So my message is simply
that there is this strong alignment of
interests, and as the President focuses on how to grow the
economy, exports in trade are an integral
part of that agenda. And so the work that you
have done throughout his Administration, our agenda
today reflects that priorities. And so I just want to
really thank you for your service, and your
willingness to — with everyone having such
a busy agenda, do what you do. And we couldn’t really do
it, what we do without the leadership from the
Secretary of Commerce Penny Pritzker, who has
not just hit the ground, but hit the skies,
hit every mode of transportation running
since she’s been here. So thank you Jim for a
chance to say a few words. Chairman McNerney: Thank
you, thank you, Valerie. And the White House
engagement and Cabinet level engagement,
Loretta informs me, has never been stronger,
ever been stronger then it has during this PEC era. So we thank you for that
engagement and appreciate it. And it enables the
effectiveness of the work of this group to be
magnified, much more than it would be otherwise. So sorry, but Penny,
my partner in crime. Secretary Pritzker: Yes,
well, thank you, Jim, and thank you, Ursula, for
all of your great work. And to all the members
of the PEC, we really appreciate your
leadership and your advice. The letters that you put
together, as always, are extremely valuable to us. I’ll just say one thing
before I kind of get in to talking about NEI
next, which is this is a team effort. And you know, I’ve been
here now almost a year, and one of the things
people ask me, what suprises me about
being in the public sector, and I would say what’s
extraordinary to me is the team effort. And the PEC members saw
it earlier today when Ambassador Froman and I,
and Ambassador Rice sat and, you know, spoke with
you about some of the things going on
around the world. And what you need to know is that the folks in the White House, the folks at
USTR, Commerce, you know whether it’s
Transportation or Ex-Im, OPIC, you know we’re all
working together to try on your — you know,
grow the economy. And Jeff is a great
leader of our interagency processes, as
is Ambassador Rice. So I think that’s —
hopefully you come away from your visits here with
a message of, you know, we may not always
agree on every fine point, but we really do have — are
trying very hard to get to the best answers,
taking into account all the facts. And as I think, Jim,
you said, these are unbelievable
complicated challenges we deal with at certain times. So let me talk a little
bit about exports. From the start of
President Obama’s time in office, this
Administration has been focused on
increasing exports. It’s been a central pillar
of the strategy for economic growth,
and for good reason. We know that more exports
means more good jobs in the United States, we know
that more exports means better business for our
companies, and we know that it means that
all of you and our other businesses throughout the
United States will be able to reach more
customers, if we do a good job supporting exports. That led to the creation
of the National Export Initiative, which you all
were very instrumental in creating, with lots of
principles behind it. And you’ve been critical
in our achieving enormous success in our exports
over the last four years. We’ve had four straight
record years of exports. We have $2.3
trillion of exports. One-third of our growth
since 2009 has been driven by exports. Our manufacturing sector
is growing and selling more made in America
products over seas. Nearly 30,000 businesses
are exporting for the first time since
the recession. More than 1.6 million
Americans are earning paychecks thanks to the
export-supported jobs. So this is an
extraordinarily important pillar in our
economic growth. And American-owned
companies are expanding facilities, and adding new
ones, and bring jobs to America, and investing
both here and abroad, and that is undergirding
this growth. So taken together, these
facts and figures paint a very clear picture and
send a really clear message. There’s no better time to
invest or do business in the United States, but
there’s also no better time for
American-located businesses to be exporting. And with these major
gains, though, there’s still a lot more work
that we can be doing. And when the PEC met last
September, we discussed the need for
better metrics. And that conversation
inspired a full-scale assessment, which included
focus groups in 11 cities, surveys that reached 6,000
customers and partners, an evaluation of the impact
of our trade missions, our trade shows, and our
popular services, as well as an examination of
what are the potential opportunities for us. And the findings were
really instructive. Leaders at the Department
of Commerce took this feedback very seriously
and worked with our sister trade organizations
to develop what we call NEI/NEXT. And NEI/NEXT is
data-focused and customer-driven. It will help ensure that
more American businesses can fully capitalize
on markets opening up across the globe. We have five strategies
that undergird NEI/NEXT. The first is that we’ll
help businesses find their next customer abroad. The second is that we’ll
increase the efficiency of a company’s first
and next shipment. Third is, we will help
firms finance their next order. Fourth is, we will help
communities integrate trade and investment into
their Next growth plans. And fifth is we will open
the next big markets around the world for
our companies, while ensuring a level playing field. So importantly, under
NEI/NEXT we’re going to support the creation of
data for three purposes: to help businesses make
better decisions, to better inform communities
throughout the United States, so they can
better integrate trade and investment into their
economic development strategies, and to
help us in the government gather feedback from customers,
industry, and stakeholders to continuously
improve our efforts. So NEI/NEXT is going to be
a driving force behind our work to help American
businesses grow, export, and create jobs. NEI/NEXT will continue
to extend the reach of American innovation and
ingenuity around the world. And NEI/NEXT will enable
and empower us to deliver our central
message loud and clear, which is ‘America is open
for business.’ But to do this
successfully we can’t do it without your
guidance and help. And the feedback that you
give us is invaluable to not just those of us in
leadership, but frankly to our teams. And for that we
are really, really grateful, and we
recognize, and I recognize having sat in the private sector
and been part of these committees that provide
advice, how much work goes into it. So I not only thank all of
you who are on the PEC, but I really thank your
staffs for the support work that
they’re doing, working with all of our staffs to make
this happen. And thank you for your
leadership in helping American companies
compete throughout the world. Chairman McNerney: Thank
you very much, Patty. I mean, I think
we’re with you. NEI/NEXT, a lot of fresh
ideas, new metrics, and I know a lot of the letters
today that we’re going to review are responsive to
some of the things that are called for, so I
appreciate it very much. Another theme we’ve had is
manufacturing innovation, and I think, Jeff, were
you going to make a — offer a couple of
comments along the way? By the way, we’ve been
giving Penny some plaudits for her engagement
with the business community, but this fella here,
Jeff Zients, has reached out about as fast
as Penny has. So keep competing
in that regard. Director Zients: I’m fine
being in second place. Chairman McNerney: It’s
highly appreciated Jeff. Secretary Pritzker:
Jeff, we’re partnering. Chairman McNerney:
That’s right, I forgot. Director Zients:
Two-minute run here. You know, for all the
reasons that you all know so well we do have
the wind at our back for manufacturing
and exports given the skill of our workforce, the
productivity of our workforce, the fact
that we are the world leader in innovation, and now this new comparative advantage in energy. What I think in addition
to all of that, and what we’ve been focused on
this week, and will continue to be focused on, is the
level of entrepreneurship and
innovation around manufacturing. In fact, you look at the
data, this is the highest level of entrepreneurial
activity in the manufacturing sector that
we’ve seen in over 20 years. And this week the
President’s really been highlighting that to call
it out, and hopefully add even more momentum to it. He went earlier in the
week to Pittsburgh to a tech shop to look at
realtime innovation and manufacturing. I know he really enjoyed
that visit; Valerie was with him. Yesterday we hosted here
at the White House, the President hosted a makers
fair, the first ever makers fair. And to the extent, I could
track what was going on, it was really cool; a lot of it was way over my head. We also announced that the
federal government would be opening up our spare
capacity to entrepreneurs and makers. So when NASA has, you
know, has stated there are wind tunnels that that
can help makers test the aerodynamic facets of
their products; that’s now open for their use. So we’re — that’s about
$5 billion worth of advanced equipment, which will now be open to entrepreneurs. We had 90 mayors commit
to the Maker Challenge. So they’re now finding
spare capacity in their libraries and other
government buildings to host makers and put
in place leading edge equipment, which all of
you know is becoming cheaper and cheaper. So I think that we should
be looking for the opportunity for these
new companies to export right away, and that
really can help with NEI/NEXT and help to grow the economy. I’m looking forward to our
conversation on Ex-Im, in that I do think it’s a
timely matter, and I know Fred and Robert are
going to talk more about it, but I think it is time
for us to be focused on Ex-Im reauthorization. Thank you, Jim. Chairman McNerney: Thanks,
Jeff, I appreciate the plug on Ex-Im. I think we’re going to
hear from Fred, maybe a similar theme later. My only comment on the
list of technologies you’re supporting, just go
easy on the wind tunnels. (laughter) We’ve got that — Marillyn
and I got that covered. (laughter) Secretary Kerry has joined us; we’re delighted to have you here. We’re not sure what your
timing is, Mr. Secretary. We could offer you a
minute now to make some remarks, or we could wait
another half hour or so after reviewing
the letters. Which would you prefer? Secretary Kerry: Let’s
review the letters, and I want to figure out what
everybody is talking about. (laughter) I want to figure
out where I am. (laughter) Chairman McNerney: Yeah. The busiest man in the
world, right here to my right. So look, why don’t we turn
to the letters, and let’s move through these
expeditiously, but with the proper process. I think our first letter
is underlining the importance of trade
promotion authority, and I think, Ken, Ken Frazier,
were you going to summarize for us? Thank you very much, Ken. Kenneth Frazier:
Thank you, Jim. Building on the work of
the PEC over the last several years, this
letter on trade promotion authority underscores the
role of TPA to advance tangible
progress on trade. As we all know, TPA is
a critical piece of the trade framework, namely
establishing congressional objectives for what the
Administration will deliver in high standard and comprehensive trade agreements. Given the changes in the
global economy over the last few years and
the important trade negotiations currently
underway, it’s timely to update our goals since TPA was
last passed in 2002. We also must update TPA to
reflect changes in U.S. law, for example, that
are relevant to intellectual property, which
is a cornerstone of our economy. TPA is crucial to ensure
that we pursue trade agreements that reflect
both our values, as well as the opportunities in
the current and future global economy. TPA is Congress’
opportunity to set goals and expectations,
not just on substance but on process. TPA ensures that Congress’
voice is heard, and that there are mechanisms in
place to share information and to seek guidance from
legislators throughout the negotiations. For all these reasons, we
urge the Administration to continue its engagement
with Congress and to seek passage of TPA as
soon as possible. We remember Ambassador
Froman’s comments earlier this morning
about, what’s the cart, and what’s the horse, in terms of substantive agreements like
TPP versus TPA, but we underscore the importance of TPA. Chairman McNerney: Thank
you, thank you very much, Ken. And I think the other side
of the coin, obviously, even though we’re calling on the Administration to continue, the emphasis is
our engagement. And I know Mike will
probably remind us of that later when he
makes his remarks. But a big part of the TPA
equation is us continuing to weigh in, continuing to
make it a priority as we work the Hill and meet
with friends and supports. So that’s — we don’t
mean to ignore that responsibility as we call
for more effort from all of you. Is there any other
discussion or are we pretty much singing to
a common choir here? I think we are. So with no objections,
and I don’t see any, the letter is adopted. Second letter. Jenny, and you warmed
up earlier today over breakfast on cross border
data flows, but why don’t you give us a
summary of the second letter on cross data border flows. Virginia Rometty: Okay,
well then — and first I should say that the
Administration has taken a number of actions
already in this area. It’s both cross data
flows, cross border data flows, as well as
data localization. And in fact, these are
a threat not only to operation globally, but
also to business globally, and frankly it’s a threat
to how governments can even operate, and the
benefits they get. So the past two years,
both Secretary Pritzker and Ambassador Froman had
both been very helpful in their attempts and
their efforts here, because we have seen some
successful rollback of troubling policies. I think many people are
well aware of the India preferential market
access policy that got pulled back. But since, and quite
clearly, since the Snowden revelations,
what has happened is you see an increase now in
governments who are advocating and promoting
local and digital protectionism — just
to list some of the countries, Brazil,
Turkey, Russia, Indonesia, Vietnam, Nigeria, India —
and they’re in the forms of cross-border or
the data protection, or keeping data local. And honestly, there
are many times often a condition to do
business there. So while privacy and
security, those are often the reasons
stated for this, outright stated, this is really
a form of protectionism. And it is really
often driven by local competition, local
commercial competition. I don’t think that anyone
would argue that you need data. It’s a lifeblood
of an economy. It’s for our governments. It’s for our businesses,
for small, medium enterprises as well to
succeed around the world. And while privacy and
security are essential, it’s just really important
that, we believe, that any local requirements for
this, it will actually just create trade barriers
and do nothing for privacy and security at
the end of the day. So, we would advocate that
we really work together to defeat any of this
digital protectionism. And in the short term,
please continue — the Administration — to do
what we’ve been doing as these creep up. We go work on
them bilaterally. But, as we spoke about
earlier today with Ambassador Froman, the
most important thing is to intensify the focus on all
the trade agreements, to be sure that they actually
— that there are rules there that
prohibit that and protect, that we’re able to move data and
not have to store data locally. And I’d just end on the
point that this isn’t about a technology
industry issue. This is every
company’s issue. It’s every company, every
industry, and frankly all governments’ as well, and
their ability to both create economic
prosperity and move jobs. Chairman McNerney: It,
taken to an extreme, it would impair our ability to conduct business globally. And so threading this
needle between being sensitive to local
sensitivities on privacy on one hand, but not
allowing agreements to wrap — local interest to
wrap themselves in that cloak, to in essence to
produce a protectionist environment is what I
think is the point. So, and I know Ursula and
you, Ginny, have felt very strongly as we’ve
crafted this letter. Is there any other
discussion on Ginny’s proposal? Without objection then,
we will adopt the second letter. And our third letter is
on innovation policy. I believe Ian Read
is — of Pfizer. Welcome. Ian Read: Thank you. Chairman McNerney: And
look forward to hearing a summary. Ian Read: Thank you. Well look, the letter
recommends a comprehensive national innovation and
competitiveness policy. I think the United States
has become accustomed to thinking of itself as a
leader of innovation and the strongest
country in the world. But the reality is that
we no longer hold a commanding edge. We are still ahead, but
it’s being eroded rapidly by competitors. Other nations,
particularly in Asia, are using national
policies with a comprehensive approach to
innovation to attract research and development investments,
and to promote innovation that’s threatening
America’s competitive edge. And they are succeeding. Some examples are, in the
biomedical sector, India, China, South Korea,
Taiwan, have implemented aggressive national
strategies. This has fueled a rise of
15.1 billion in biomedical investment in Asia from
2007 through 2012. And this is at the direct
expense of investments in the U.S. In 2000, Singapore
launched a biomedical scientific initiative to
develop Singapore economic competitiveness and
establish the country as a center of biomedical
excellence. They’ve created an
investment climate that includes financial and tax
incentives, infrastructure improvements,
strong IP, regulatory frameworks and talent retention. They’ve managed to, in
a decade, double the employment R&D, and
they’ve now have increased their pharmaceutical
exports by 500 percent to just over 6 billion. China launched a similar
innovation platform under which research
expenditures have grown by over 300 percent in the
period between seven and 12. And at this rate, China’s
funding of R&D is expected to surpass
that of the U.S. by 2022. So China is churning out
hundreds of thousands of life science graduates
every year, and increasing their ability to
be competitive. So I believe we should
identify innovation as a national priority, and
just not narrowly looking at it by saying
increasing funding for STEM education, or creating
a more robust R&D credit. We should push for
a comprehensive multi-faceted policy
framework that includes long-term
investment and policy changes to support innovation. Such a policy would
support collaboration between government,
academia, and industry in every sector that
benefits from innovation. It would help retain
talent in the U.S., restore funding to basic
research, expansion of education in STEM, and it
would drive reforms in national tax, intellectual
policy, and civil justice systems to create a more
favorable environment. Now I think it’s time for
the United States to step back, and just like
it’s looked at having a national energy policy,
it needs to step back and have a national innovation
and competitive policy to ensure that the United
States continue to grow and prosper from the
abilities we have here. Thank you. Chairman McNerney: A
very timely reminder and recommendation. I think this is one of
these where, going down a list of specific actions
is difficult at this stage, but it needs to get
on the national agenda. And I think that’s the
spirit of Ian’s comments. And we think it can make a
difference in the medium and long-term
in particular. And we’re beginning to
eat our own seed corn inadvertently, right
now, as an economy. So we wanted to raise the
issue and there will be more discussion and
debate over time. I know Jeff and the
President have been focused heavily
in this area. Penny, do you have
a comment there? Secretary Pritzker: Can I
just make a quick comment? So one of the four pillars
of the Department of Commerce’s strategy
is around innovation. One is focused on
manufacturing, and I just want to put a plug in for
the National Network of Manufacturing Innovation. And something which is
having great success. We have four institutes
that exist today. There is bipartisan and
bicameral support for legislation. And I think it’s an
incredible return on the taxpayer’s dollar
investment. So I just, as one avenue,
we’ve also put together, working with Jeff, sort of
a list of the things that are going on around
innovation in this Administration. Maybe we could bring back
to you what we’re doing. Chairman McNerney:
That’d be terrific. Secretary Pritzker:
We at Commerce took an inventory, and then we
could talk about areas where you think we
ought to be focused. Chairman McNerney: Super. That’s the kind of
engagement we’re looking for, that’s fantastic. And these four
manufacturing innovation centers around the
country, we’re — a number of us around the room
are participating. And I’m looking at Pat and
myself in Chicago, for example. And these show
some promise. And so those examples, and
others, let’s take a look at them, and let’s see if
they — how they measure up to Ian’s
call, and see if there’s more if we should be
doing. So thank you very much,
Ian, appreciate it. So again, without objection, very compliant group here today. (laughter) Good, we will
accept the letter. Trade facilitation. I think, Scott, were you
going to — Scott Davis of UPS. Scott, by the way, is
calling his own number at UPS. That’s increasingly
rare event in U.S. corporate life. Scott Davis: Do
it while you can. Chairman McNerney:
Transitioning to the exalted non-executive
chairman status. We all wish for that. (laughter) Chairman McNerney: You
don’t do anything, but you second guess everything. (laughter) Scott Davis: Perfect. I’m just the right
person for that. Chairman McNerney: But
thanks for your service, thanks for your service
to this council over the years. Scott Davis: Thanks, Jim. Last December, the 159
World Trade Organization member countries completed
the negotiations on agreement on trade
facilitation. I think a lot of people
said that would never happen, so congratulations Ambassador Froman and your team on the fantastic job they’ve
done. The letter highlights
the importance of the agreement, urges the
Administration to take a leading role in
assuring its ratification and implementation by
WTO member states. It underscores the
importance of private sector input during the process. Trade facilitation reforms
help boost trade by reducing cost and delays
at the border, through measures that provide
predictability, simplicity, and uniformity
in customs and other border procedures. A 2013 report published by
the World Economic Forum estimated that even
partial trade facilitation improvements
could increase global GDP over six times more than
removing all tariffs around the world. Small and medium-sized
enterprises that do not have the resources to
navigate complex webs of customs or border
procedures will especially benefit from
trade facilitation reform. The WTO agreement includes
agreements to expedite movements, release, and
clearance of goods, and improved cooperation among
WTO members on customs. While the ATF is not a
panacea that addresses every supply chain barrier
around the world, the agreement does include
many important provisions that reduce time,
cost, and complexity at the border. While negotiations on
the agreement have been completed, the ATF’s
multi-year implementation process has
only just begun. In this recommendation,
the PEC urges your Administration to pay a
leading role in not only implementing the
agreement domestically, but also encouraging other WTO
members to ratify and implement the agreement. Furthermore, during this
implementation process, the PEC encourages the
Administration to create a systematic process
for private sector input. The Administration’s
already begun to engage the business community
regarding the ATF implementation. This initial outreach,
however, should be enhanced through the
creation of a formalized structure for
private sector engagement. American companies that
trade with the world, that build and operate global
supply chains, and that partner with firms of
all sizes in every country can offer front line
visibility into current customs capabilities and the progress with implementation. And finally, the
PEC appreciates the Administration’s efforts
to conclude the ATF, and looks forward the
partnering on effective implementation
going forward. Chairman McNerney:
Thanks very much, Scott. I think this is one we’ve
been working for a while. I know Commerce and
others have been engaged. Pat, I know you’ve
been heavily engaged. Any comments? This gets as close to an
article of faith as we get in this kind of meeting. So without objection,
we’ll approve the letter. Thank you, and thanks
again for your service. Scott Davis: Sure. Chairman McNerney:
Appreciate it. I think Arnie, Arne
Sorenson, travel, and tourism. Where’s Arnie? Arne Sorenson: Right here. Chairman McNerney:
There he is. Would you please
propose the letter? Arne Sorenson: Yes. Thank you. On behalf of the Services
Subcommittee of the PEC, I’m happy to present this
letter, which is really seeking to build
upon the great momentum that’s already underway in
travel and tourism. There is a global
competition underway to grab as many of the
hundreds of millions of new travelers
around the world. These are folks who by and
large are entering the middle class for the
first time, who have the resources to get
beyond simply caring for housing and health, and food
and nourishment. And they’re
looking to travel. And the competition really
involves, from the U.S. perspective, three things. We are obviously a
well-known destination. We’ve got great
things to offer. But the first is
communicating an invitation that we’d like
for folks to come and leave their dollars here. That’s where the
exports come from. The second is to ease the
process of permission, to allow them to come here. And the third, of course,
is to focus on the arrival experience. Great progress has
been made through the leadership of President
Obama and many members of the Administration, as
well as great leaders on the Hill. And there is
great momentum. Brand USA was formed
a couple years ago. It now needs
reauthorization; that is the vehicle which
communicates the invitation to folks to
come to the United States. Studies have been done,
not a single public dollar is spent in communicating
that welcome. But the dollars that are
spent, which are a portion of the visa application
fees, are driving roughly 50 to one return. The second is permission, and
that’s really about issuing visas to
foreigners to permit them to come to the
United States. With focus there, too,
wait times have come down significantly, from about
90 days to four or five days in places like China. But there’s further work
to be done there around easing renewal of visas,
extending the length of visas, and over time using
technology to ease the visa interview process. And then finally,
it’s arrival. What do these foreign
travelers see when they come to the United
States? How long are the lines? Are the — is the arrival
process filled with smiles and welcome? And what do we do about
the infrastructure? And almost everybody
in this room travels. You know the stark
difference between the main terminal at La
Guardia, and many of the new terminals
that have been built around the world. That’s just one
example of the kind of infrastructure. So there are specific
near-term steps — reauthorization of Brand USA, authorization of the Jolt Act —
and then longer-term steps around infrastructure
investment and arrival. But we thank the
Administration and the Hill for leadership so
far, and think much more can be done to grab
tens of millions of new visitors to the
United States. Chairman McNerney: You
know, I think the work at the Department of
Transportation, TSA, and State have provided a lot
of the mechanics under the category of unsung
activities. I happen to see a fair
amount of it, given the airplanes that
facilitate a lot of this travel, mechanically. And I highly appreciate
the engagement of State, TSA, and Transportation. Did you have a comment,
Secretary Foxx? Or is — your weighing
in has been particularly important here. Secretary Foxx: Thank you,
Jim and Ursula, for your leadership. And we at DOT are very
excited about the President’s announced
goal of 100 million international
tourists to the U.S. by 2021. I would only add one point
on the infrastructure issue, which is, we are
experiencing a fair amount of congestion in
our airways that can be a limiting factor on our
ability to deliver on our goals. And there is technology
that we are now deploying. We were actually in
Houston yesterday to make an announcement about a
further development in next gen on our ability
to create more capacity within the air space. It’s a very important
technology that we’re rolling out that
essentially puts us out of the business of using
World War II radar systems, and into the
business of using 21st century GPS to shorten the
distance between planes, creating more fuel
efficiency, safer landings, more
efficient landings. It’s going to save
millions of gallons of gas and other things, but
it’s also going to create more capacity in the air space. And so this is a very,
very important piece of how we get to
the final goal. Chairman McNerney:
Hear, hear. Hear, hear. Senator Klobuchar, did
you have a comment? Senator Klobuchar:
Yes, I did. Thank you, Mr. Chairman
and Vice Chair. I just wanted to commend
Arnie for his work. Literally, half of the
export increase in the last year has been
travel and tourism. It now counts for 22
percent, 22 percent of export growth this year. And we’re really proud of
the work we’ve done with Brand USA and the
Export Promotion Act, the Travel Promotion Act. We have a reauthorization
that is going to the Commerce Committee
very soon. Senator Blunt and
I are leading it. We have 26 authors, half
Democrats, and half republicans. We can’t say
that very often. So we are very pleased
with that, because in the past, there’s
been some controversy. And I think the numbers
speak for themselves, why we’re feeling good about
reauthorizing, either as part of the
immigration bill in the Senate that it is part of, or separately. And we’re having two
tracks here to make sure we got it done. And I also wanted to add
that I was just in Canada, Senator Blunt and I were
up there last weekend, and led a trip there
with five senators. And there’s very much
excitement there about what’s going on with
exports, and the possibilities of the
more infrastructure at the border, not just for
tourism, but also for bringing in more
goods to market, and really upping our game with Canada. And they were very
positive about that. So I want to thank Arnie,
and look forward to working with you on
this in the future. Chairman McNerney: Well,
thank you for your leadership, Senator. I mean, you practice
what you preach. I mean, you sent Jared Allen down to Chicago, from Minnesota. It’s a highly appreciated
import in Chicago. Senator Klobuchar:
Anytime. Chairman McNerney: And
practicing what you’re preaching on exports. Senator Klobuchar:
And we are getting the Superbowl in 2018,
even though we were colder than Mars one day this year. (laughter) Chairman McNerney: Well,
you’ve seen what Bears’ away uniforms look like
even in a Superbowl. Okay, thank you very
much, Senator, for your leadership there. And without any other
comments, without objection, we’ll
adopt that. Director Zients: Jim,
let’s just do 30 seconds on wait times. Chairman McNerney:
You want to wait. Director Zients: The visa
wait times, as Arnie said, come way done. Got to keep working there. The next challenge is wait
times, when people arrive, as Arnie said,
at the airports. DHS is leading there, but
it really is a city by city partnership
to get that done. You need the airport
authorities and the local businesses to
work with DHS. We’ve done it in
Dallas/Fort Worth. We’ve done it in Chicago. We’ve halved
the wait times. But to do it at the top 15
airports, which is what the President has
directed us all to do, it has to be a
public-private partnership. So I would encourage
people to work in their local cities to
get this done. Secretary Pritzker: Can
you just say one more thing? Chairman McNerney:
Thank you. Secretary Pritzker: Just
one more thing on that, to underscore what Jeff said. The President did an
executive order to direct Department of Commerce and
Department of Homeland Security to come up with a
metric, and work towards a specific metric, and there
— I can’t remember if it’s 120 days, or — it’s
a very fast timeframe. But the other thing is,
Department of Homeland Security is looking for
loaned executives to help them with — so that they
can execute against these goals of doing what I call
hospitality and national security all at the
same time, or trade and national security
at the time. So any of you who might
have folks that could be available to help them, I
want to put a plug in for DHS. They are being a great
partner on this. Chairman McNerney:
Thank you. I think we will all
try to respond to that. I appreciate it, Penny. So without objection and
further comment, we will adopt the letter. I have just been informed
that — Valerie, I think the President is about
10, 15 minutes away, so we might be able to get
through the letters. Our sixth letter will
be presented by Vanessa Keitges, and it
covers small business access to capital. Vanessa, I saw you
earlier — there you are. Vanessa Keitges: Yeah. Chairman McNerney: Yeah,
welcome, it’s great to have you here. Vanessa Keitges: Thank
you, (inaudible), thank you. I was appointed last
summer to represent the startup and small business
community, and as we learned at the last
meeting, only about 1 percent of small
businesses in America export. So we want to try and
increase that, so this letter is around
access to capital. As we learned, American
companies, small and entrepreneurial, are
having issues of access to capital. Times have really changed
where this industry used to be able — or our
sector — go to banks or community banks to get
loans, and in fact, our company over a two-year
period, interviewed 30 community banks and was
unable to get a loan. Therefore, we are really
looking at solutions, what can we do to get the gap
of where we want to create jobs and innovation
and then export? And therefore, a solution
that community banks testified a couple of
years ago here, is to go back and have states
look at creative financing ideas as banks and
community banks are unable to do so due to risk. Therefore, in Oregon,
Governor Kitshapper created what’s called the
Oregon Growth Board, where he actually took 100
million of lottery money allocated over a 10
venture capital firms, who then in turn, invested in
their sectors and their small business and
start-ups in their states, and including Columbia
Green as a bi-factor of that type of creative
financing, which then allowed us to grow,
scale, and now export. Therefore, what we would
like to do here at PEC with regards to this
access to capital, is really urge the Department
of Commerce to work with the National Governors
Association with the states to look at
putting more creative financing ideas around taking
lottery money, pension funds, general funds,
allocating those over to the adventure capital to
invest in each states’ sectors that are
importing them. Oklahoma, Colorado,
Wisconsin, are some of the other states
that have done this type of creative financing. Therefore, again, on
behalf of small business and start -ups, because
the times have changed, and banks and community
banks can’t get to this sector, we need to
get them access to capital. We need to take action. We can do it through the
states and the Department of Commerce,
the Conference of Mayors as well, and the SBA, and so
we urge everyone to take action, and I know the
National Governors Association is going to be
bringing this up at their next agenda, in their
economic development story, to begin sharing
other stories like Oregon and Colorado, and
what we have done. Thank you. Chairman McNerney: You
know, Vanessa, the most powerful argument for
this letter is your experience and what you have done
with Columbia Green. It’s been spectacular. Vanessa Keitges:
Thank you. Chairman McNerney: If you
don’t know the story, but Google the story,
you will love it. Vanessa Keitges:
Thank you. Chairman McNerney: And
it’s — that example does as much for anything. Yes, do we have
any comments? Senator Gillibrand: I want
to echo the points of the letter. I think access to
capital is one of the biggest challenges
that New York states businesses are facing still, particularly
for smaller businesses. And I really want to
highlight and comment what Fred Hockburg has been
doing through the Export-Import Bank,
because he took a tour with me through upstate
New York to meet with small businesses. One business we met
with was Mercer Dairy. They create ice cream that
is made with wine, and apparently the
Chinese love it. But what export can do for
the small businesses is they can actually fill and
order without receiving the money first. And that kind of insurance
allows a small business like Mercer Dairy to say,
okay, I can fill an order for all of this ice
cream that I would never be able to afford to send
without being paid first. It allows her to
increase her export. So one thing that was
really important about that fly-around, is that
most of our businesses had never heard of the
programs under Export-Import Bank that
could actually help a small business. And so I think that the
more we amplify what the federal government can
do through the SBA and through
Export-Import Bank, we will have more success stories. I love the story Fred told
about Granny’s Pickles, some southern grandmother
who makes pickles, and again, the Chinese
seem to love it. So we are able to export
our products worldwide. The second thing is, I
want to focus on SBA’s Challenger Initiative. I think it’s
really important. One of the challenges that
women-owned businesses have is they typically
start their businesses with eight times less capital than male-owned businesses. And it’s not surprising,
because most of the avenues for capital are
male-run; so most venture capitals are male-run,
most private equity firms are male-run, most
community banks, and most large banks. And so, as human nature
dictates, we see brilliance in ourselves,
and so if you don’t have woman who are running
these funds, they don’t always see the
brilliance in the business idea for the women-owned
businesses. It’s just human nature. When banks do create
targets for lending to woman owned businesses,
they have found great results. And in Key Bank in upstate
New York, it’s a woman CEO, she said, I am
going to set a 3 billion target for women-owned
business lending. She has exceeded that
target, she is at 5 billion dollars
already, and it’s among her highest performing portfolios. So when I meet with our
bankers across the state, I urge them, please
set a target. It doesn’t matter what
your target is, whatever is consistent with
your own business model, just set one, because you will
see, even though these aren’t the typical
businesses you would normally fund, they
actually make money, and they return — they are
not delinquent in their payments, they are
very good returns on investment. So thank you for all
the work you are doing. I think you are spot-on
in your focus, because we know that two-thirds of
all new jobs are created by small businesses,
and without access to capital they can’t grow, and
so with tools Like Ex-Im to help them facilitate
exports, that’s how we create growth
certainly in my state, so thank you. Vanessa Keitges:
Thank you. Chairman McNerney: Thank
you, Senator Gillibrand. Did you want to
make a comment? Yes. Administrator
Contreras-Sweet: I did, yes. Lamentably, it’s not the
first time that I have heard the story similar
to yours, Vanessa, and so I understand. I came out of — I was
California secretary of transportation, and as I
was trying to dole out work to small businesses,
I found that they had similar experiences. And so having arrived now
as the new administrator of the SBA, and day one, I
set out to address some of those issues. So I am just delighted to
give you a little bit of an update. And that is that, first
and foremost, we have now put in a technology
that we think is going to help expedite it, the process
through which we engage with the bankers, and
so I am delighted to see that some of that has
already taken hold, and we are getting some good
feedback on that. And the second is the way
we look at underwriting. We came out with a new
predictive score that we think helps banks get to
yes a little easier, so I would love to share that
with you in more detail. But just to the point
here, I am just really delighted at how
cooperative across President Obama’s
Administration, that across all the
departments, everybody is cooperating on
their SBIR goals, and so you know, that’s where we
set aside so much of the research dollars out of
each agency for innovation and research. So I was very encouraged
to see that in our reauthorization we have
been able to increase that number, which will allow
us to spur more innovation and more work around the
country through small businesses. So I think that’s
really good news. And second, just again,
in terms of database and allowing folks to use our
databases, what we’re doing now, we’re
going to be launching this very eminently, I am
pleased to say, that we are going to be putting
the database — collecting all of the research,
all of the technological advances all in one place at the
SBA so that people don’t have to go to every single
agency to find out what’s research, and what developments are occurring. We will have it
all at the SBA. Thank you. Chairman McNerney:
That’s terrific. Vanessa, you have
attracted a lot of support here on your
first — your first outing. Any other comments? Director Zients: Just one
thing, and you have been supportive,
Boeing has been supportive, Lockheed has been supportive of
an initiative that we are launching, which is
to basically take the fact that large businesses
don’t have an access to capital problem. In fact, the capital is
quite cheap now, whereas small businesses
either can’t get it or it’s quite expensive. So we are modeling this
after something that Cameron did in the U.K.,
which is to have big businesses step forward
and say, we will provide financing to
small businesses in our supply chain at close or
at our cost to capital. So we want to get as many of the big businesses here signed up. We did this in the federal
government by paying small business contractors
faster, and that’s had a real impact. And we want to do the same
thing with the private sector. This is coming together
realtime; we are probably going to launch
it in the next few weeks, and the more big businesses on
board, the more we can benefit small businesses. Chairman McNerney: And I
think a lot of us already are. Director Zients: Yes. Chairman McNerney: I think
a lot of us already are, and Fred has a similar
initiative on export finance, leveraging
the credit of the top of the supply chain. So I think, Vanessa, I
think everybody — there is zero controversy about
your letter, so without objection, why
don’t we adopt it? Gene, you have
— where is Gene? Gene Hale: Right here. Chairman McNerney:
There he is. The President always comes
during your letter, so why don’t we hurry? Gene Hale: Yeah, let’s
hurry through it. Chairman McNerney: Twice,
twice this has happened. Gene Hale: I know, I know, it’s by design too, right, Jim? Chairman McNerney:
Technology enables small business exporters. Gene Hale: Yes, thank you. Thank you very much. The SMB Committee has been
very busy since our last meeting. We have hosted several
roundtables, Chairman Hoshburg attended
one in Los Angeles. Secretary of Foxx in March
came to Los Angeles and spoke to
about 800 SMB’s, and we just recently held a
roundtable in Los Angeles where we had great feedback. Some of the positive that
came out of that was free trade agreements
with Columbia. One company mentioned
that, since that trade agreement, their
company is four times as large as it was before. The SBA Ex-Im Bank has
played a big role in that success. Quite interesting the
roundtable discussions surfaced a new area, type
of exporter that needs our attention, and
it’s called the consumer-driven technology-enabled
small business. And John Donahue from
Google has played a major role in driving this. Male Speaker: EBay. Gene Hale: So he is not
here, but he wanted me to at least say a few
words, and I will. He said thank you for
providing the opportunity to present some thoughts
on the emergence of technology-enable
small business. Business exporters — and
I apologize that I am not able to present the
letter in person. Technology, particularly
the internet, is enabling SMB’s to take their
business to a global audience in a way
that was never possible before. A traditional, main street
business can now use the internet to sell
its products and services online and reach
nearly 3 billion users. These businesses maintain
a local presence and participate directly in
their local economy, but also increase revenue
through access to customers around
the world. And I will just
wrap it up here. Despite these tremendous
new global opportunities — (laughter) Gene Hale: — remain for
consumer driven technology enable SMB’s. Government policy can play
meaningful role to reduce these frictions. When frictions are
removed, inclusive global commerce, local jobs and
opportunity grows in communities
across America. I look forward to working
with the Administration and partners in
industry to ensure that technology-enable SMB’s,
exporters realize their full potential. So that’s the essence
of the comments, and we basically want to get an endorsement for the letter. Chairman McNerney: Gene,
I just want to note for everybody that no one
works harder at the grass roots level on the
PEC than you do. Gene Hale: Thank you. Chairman McNerney: You
know, at the community level, at the small
business level, your leadership has made a big,
huge difference, and so you are not just writing
letters, you are doing the work so — Gene Hale: It’s a team,
it’s the team that we have. Chairman McNerney: It
is highly appreciated. Any additional
comment or objections? With no objection,
we will adopt it. We are going to try for an
eighth letter here before the President comes. I think Bob — Robert
Wolf was going to outline support for the
import/export bank, and we got Fred right to your
right there so — Robert Wolf: Well, they
put me in the middle of former Massachusetts
Senator and now Senator Gillibrand, but I am still
a Boston Red Sox fan, I will let you know. Listen, it’s (inaudible)
cabinet members, administration members,
elected officials, Chairman McNerney, and
Vice Chairman Burns, and member of the PEC. It’s an honor to present
today such an important and critical issue
for the economy. The Export-Import
Bank reauthorization. I am pleased to report
that the PEC agrees with, and fully supports the
President’s proposal to provide the Ex-Im Bank
five-year re-authorization with a $160 billion
cap by September 30th. Now I would like to
emphasize a few points for the record. The Ex-Im financing
supports small businesses. In fiscal year 2013 the
Ex-Im Bank provided over 5 billion in financing
to nearly 3,000 small businesses. That’s over 90 percent of
all Ex-Im transactions. Secondly, it
increases U.S. competitiveness. Sixty other countries
provide ex-im credit financing to support
their businesses. Third, ending Ex-Im is
essentially economic unilateral disbarment and
harms American workers. I meet with CEO’s around
the globe daily and the Ex-Im reauthorization is
coming up now every day. They don’t understand
the debate. Four, actually the Ex-Im
Bank earns interest for taxpayers and money. The bank charges an
interest rate on all transactions. Since 2009 the Ex-Im Bank
has generated, and I will repeat this,
generated, over 2 billion to contribute to the Treasury
Departments general fund. And lastly, since 1934 the
Ex-Im’s net losses on its entire portfolio has been
less than one and a half percent. And as of March 31st, the
report to Congress, the banks default rate was
less than one-quarter of 1 percent. As the only Wall Street
guy here, I can tell you that’s an
incredible, incredible, job by Chairman
Hochburg and the Ex-Im staff. We are urging all members
of the President Export Council, all of the
elected officials to go back to their states, all
the communities around the globe to support the Ex-Im reauthorization by September 30th. Thank you. Chairman McNerney: Robert,
thanks for that strong, strong letter. Are there any
additional comments? I think it’s under the
heading — Vice Chair Burns: I will make
the comment that this is essentially a no brainer
— should be a no brainer. It’s one that we can’t
take our eye off of, because it’s not without
a huge amount of opposition. So we will need to help
you, and we will do that. Chairman McNerney: Yeah,
I think as a major BRT initiative yesterday on
the Hill, and it’s one of the top priorities, and we
will keep working it. A lot of us in the room
feel very strongly about it, and so should
our economy. Ursula, you want to try
for the last letter? We might actually
get it done. This is supporting
NEI/NEXT, which Penny outlined. Vice Chair Burns: On
behalf of the PEC, we are pleased — I am pleased
to present this letter that encourages the
Administration to insure that private sector
input remains a key guiding principal in
development of the second phase of the NEI strategy, the NEI/NEXT that Penny talked
about. Significant progress
has been made under the current export strategy,
and I am pleased to see that the government has
implemented many of the recommendations of this
private sector advisory group. I believe that this kind
of public and private partnership is the
only way to improve and to move forward, and
strengthen our exports to other countries. I encourage you to
continue and even ramp up your dialogue with the
private sector, who will need to engage
in some bold and outside-of-the-box
thinking. We have begun
implementation (inaudible) — The President: Sorry to
mess up your meeting. Male Speaker:
Yeah, yeah, yeah. Hey. (inaudible commentary) The President: All right,
nobody has to get quiet. (laughter) (inaudible commentary) Chairman McNerney: Yeah, I
think this is probably the place. There you go. I didn’t — I couldn’t
quite get the vote out. (inaudible commentary) Chairman McNerney: All in
favor of Ursula’s letter? Multiple Speakers: Aye. Chairman McNerney:
Good, we’re set. (inaudible commentary) The President: Well hello everybody, sorry to interupt the flow of the meeting (laughter) The President: I just
wanted to say thank you to all of you who are here. Some of you have been
serving on our Export Council for
quite some time. Some of you are here as
new additions, but all of you have been
extraordinarily successful in your various fields. And it gives us an
enormous opportunity to hear from you in very
concrete terms about how we can advance not just
America’s export agenda, but how we can build the
kind of economic future that we want for our
kids and our grandkids. For the last 51 months, we
have created jobs here in the United States — 9.4
million jobs in all. But we’re going to
have to create more. And one of the best ways to do it is to boost American manufacturing
and American exports. That’s why since I came
into office we have been promoting American
products and businesses when I travel overseas. It’s why we created the
President’s Export Council in 2010. There aresome of the most
iconic companies in the world — Boeing being
an example, Xerox being another one. And with your help,
exports have driven in our recovery and now support
over 11 million U.S. jobs.
1:00:34.233,1193:02:47.295
one-third of the economic
growth Last year, we exported
$2.3 trillion in goods and services, which was
an all-timehigh. And business executives
around the globe say that the United States is
the best place to locate, the best place to invest, and
the best place to hire. And that’s the first time
that they’ve said that, that we are number one
when it comes to their desirable location
to invest. This is the first time
they’ve said that in over a decade. So the “Made in America”
brand is stronger than ever. And as we saw yesterday
at the first White House Maker Faire — I was
out there watching these 22-year-olds coming up
with incredible things — it is going to be a
remarkable future that we have to look ahead to. Because in many ways,
manufacturing is becoming easier, some of the
barriers to entry are lowering. It gives inventors
and entrepreneurs the opportunity to create new
products and services in ways that we can’t
even imagine. And we want to make sure that all those trends accelerate
here in the United States. So this is a moment
of opportunity. We’ve got a chance to
extend our competitive advantage in the world. That’s what this
meeting is about. One thing I want to focus
on today is opening up even more new markets
to “Made in America” products. We’re working very hard to
finalize trade agreements with our partners in
Europe and in Asia that will make us the center of
a free trade hub covering two-thirds of the
world economy. And Mr. Michael Froman has
been putting in a lot of miles trying to make
sure that that happens. And I know he’s consulted
with some of you — not just big
companies, but a lot of small- and medium-sized businesses
who have enormous opportunities if we’re
able to open up these markets, and oftentimes
are the ones that have the hardest time navigating
through some of the barriers that
are out there. I especially want to
increase trade and investment in the region. And this is going to be
one of the issues we discuss in August. There has been some
explosive growth in certain parts of the world
where we’re just not doing enough, Africa as
being a prime example. You’ve got six of the 10
fastest-growing economies in Africa, a young
population that is growing rapidly. Some of these economies
are doing very, very well, but we’re not penetrating
those markets as well as we should. And I think we’ve got
a great opportunity in August with an African
Leaders Summit that’s going to be taking place for us to talk about trade and
commerce, because that’s really what that continent is
interested in. They’re not interested in
aid as much as they are trade, development,
and partnering with the private sector. And as your businesses
know well, when we export products
overseas, we’re creating jobs and opportunities
here at home. That’s the focus here
today and every day of my presidency — how do we
create thriving businesses that are also able to
create great jobs that allow people not just to
stay in the middle class, but to work their way into
the middle class if they work hard and take
responsibility. And all of you
have done that. This council is
doing great work. And with that, I’m going
to turn it back over to Jay to hear aboutsome of
the ideas that you’ve come up with and how we
can help advance this agenda. Chairman McNerney: Well,
again, thank you for your attendance. It energizes us, and
reminds us of the importance of our
work, and we appreciate your comments about
our engagement. I think we are going to
send you a record nine letters coming out
of this meeting. We just — we discussed
them, and they — there are a couple of themes,
one of which is around this manufacturing and
technology innovation, and its enablement. And we’ve had some
discussion that Jeff and Penny have led
before you came here that reminds us of the importance of
that, and I think we had sort of held off discussing that
until you came here, because of your
leadership, personal leadership, there. And I think one of the
letters you’re going to get is from Vanessa, our
small business start-up star from Oregon, who
is talking about finding new ways to finance
small businesses, often technology-based, and
its importance for us to focus on that issue. And so I think we were
hoping maybe you’d talk a little bit about —
elaborate a little bit on what you — The President: Right. Chairman McNerney: —
said about enabling small businesses, not only to
export, but just to become a bigger part of our
economy and the role of manufacturing and
technology innovation. We’re delighted to hear of that emphasis, because it’s — The President: Of course. Chairman McNerney: — at
the heart of a — what a lot of us do around here. The President: Well,
first of all, I just want to know how much Schultz paid you to position the Starbucks — (laughter) Chairman McNerney:
Yeah, it was — The President: I’m sure
Howard’s catching that on television right now. (laughter) The President: They did a
good thing with announcing a scholarship program — Chairman McNerney: Yes. The President: — with
Arizona State, which I think is worth
companies looking at. You know, I think what I’d
like to do is begin with some of this
technology and innovation, because as I said yesterday, we
have this amazing collection of folks. Over the last couple of
days, we’ve been talking about what the — things
like 3D printing and the revolution in making
stuff that, initially, was just using software for data
and information, and now, suddenly it’s starting
to move into the three-dimensional
space, and is still in its infancy. It’s still where the
internet probably was 25, 30 years ago, but there are enormous opportunities there. And it was a reminder,
when you see some young person who invented an
incubator that’s 200 bucks, and is already
saving 60,000 lives of preemie babies around
the world, or you know, high school kids who are —
develop a sports car that gets 100 miles per
gallon as part of their class project. It just gives you a sense
of why it is that we’ve been an economic
superpower in the past, and why we have
to maintain that. So one person that I
thought would be great to comment on this is
Marillyn Hewson from Lockheed Martin,
obviously, one of our greatest innovators,
and occupies a unique section — position in our
manufacturing sector. So I know this is
something that folks have been thinking about. Let’s turn to Marillyn and
hear what the conversation has yielded so far. Marillyn Hewson: Well,
thank you, Mr. President. You know, as an
advanced technology company like Lockheed Martin,
investing in research and development is absolutely
critical to our business. It’s critical to growth. It’s critical to
sustaining the business, and as you said, it’s what
generates jobs throughout the supply chain. Over 60 percent of our
business goes out into the supply chains to small and
medium-size businesses. So what we invest in flows
all the way through. We are investing in a lot
of emerging technologies, as well as current
technologies, from robotics or quantum
computing, to hypersonic aircraft that
can fly Mach 6. So our engineers and scientists are working on that every day. But to your point, our
manufacturing processes is another area that
we’re investing in. This added manufacturing
or 3D printing that you brought up — and I know
you spent some time on it here, but also in
Pittsburgh this week, and there’s a lot of
excitement around it. What’s exciting to us at
Lockheed Martin is the ability to take it to
large-scale manufacturing environments and
do complex parts. And we are doing some of
that, and we’re finding that relative
to traditional manufacturing and design, it’s
reducing the cost about 80 percent, and it’s
getting the parts faster. So we have a — today,
we’ve got parts — titanium parts on the NASA
Juno spacecraft that’s on its way now to
Jupiter, and it’s exciting that we were yielding those very
results from 3D printing of those parts. I think the more that we
can invest as a company, and the companies around
this table, in research and development
in manufacturing processes, that’s what’s going to
generate the jobs for us in the U.S., and
that’s what’s going to allow us to take those to
other markets. And this body is about
export and trade, and in that exporting arena, if
we can get those products to market faster
through things like 3D printing, that’s what’s going to make a big difference for our companies. Chairman McNerney:
That’s great. The President: An
obviously, a big chunk of this is R&D investment
is by your company, but obvious — I think
it’s not just defense contractors that recognize
the degree to which federal R&D and basic
research ends up being critical, and us
maintaining that technological edge. And a lot of the folks
that I saw out in that yard yesterday were MIT
professors and Stanford professors, and
they continually reminded me that all this neat
stuff that they’re coming up with that eventually have
commercial applications start off in laboratories
and in research facilities, because you
know, the — it’s the nature of basic
research that you don’t know if it’s going to pay off,
and so it’s oftentimes more difficult to justify. You know, the days of the
old Bell labs where, you know, if you had
monopolies, you had enough money to go ahead
and sink in a whole bunch of kooky stuff. Those days are over. You guys got to watch
your bottom lines a little bit more. So the federal government
has to make sure that it’s doing its job
on that front. Good. As you mentioned, Vanessa,
one of our small business stars — although, I don’t
know how small it’s going to stay since she’s
so — Chairman McNerney:
Exactly. The President: —
since she’s so good. Vanessa, do you want to
talk a little bit about — as a CEO of a
start-up, what does — what role do you see in spurring
innovation in the economy, and how does that link up
with our export agenda? Because a lot of times,
folks figure if you’re small or medium-size,
you’re not thinking about overseas markets. Vanessa Keitges: Yeah. No, that’s not true. Coming from the green
building market and the U.S. (unintelligible) — USBGC
really pushing the green building standards,
start-ups and entrepreneurial companies
in that sector really have to look at
innovative products around data and performance. How are we really
affecting the environment when we build
these buildings? And so, as a small
company, a start-up, we actually received
a commercialization grant from our state to partner
up with our local university, Portland State
University, to develop a rain lab,
basically, to assimilate rain storms all
around the world so we could develop green roof technology
around those types of storms, and what cities they’re
impacting so that we can help with their infrastructure issues
around flooding. So that modeling allowed
us to develop a tool where we can manufacture green
roof technology for that particular city and the
storms that are going to be coming over the next
two, five, and 100 years. So what that does, it
allows us, I think, to have innovative green manufacturing, for example. And as we continue to
export, there are these same
environmental green building standards and issues around the world. We want to be a leader in
green and green building, and having that
commercialization grant, working with the
universities to develop these labs, get the
performance data, we’ll actually, I believe, be
a leader and beat other countries around the world
in this area, because quality is really
important, how we manufacture quality to
meet these standards, and we’re positioning
ourselves to do that. The President:
That’s great. Just one last area and
then maybe we can open it up a little bit. Obviously, one of the
areas where we’ve been an incredible innovation
leader has been in agricultural products,
food processing. And my home state company,
ABM is pretty good at that. So Pat — although, I
think I hear Coldplay. (laughter) Female Speaker:
That’s for you. The President: I’ve
become an expert at hearing people’s rings. (laughter) The President: And I’m
pretty sure that was Coldplay. (laughter) The President: Pat? Patricia Woertz: Well,
thank you for the opportunity to talk
about technology a little bit with agriculture
and food products. Sometimes, as you know,
ADM is a big manufacturer of corn-based ethanol. Many people think of that
as a first generation, but because of technology and
technological innovation, we’ve taken it to much
lower cost, lower energy usage, over
sustained — higher sustainability, more
waste products, and as — also a result of market
conditions and this innovation, what started sort of as a
homegrown fuel, thinking about using it in the U.S., now we
export, the industry does, up to a billion gallons
a year, and because it’s such a
low-cost transportation fuel, other areas of the world
are very much looking for our fuels as well. So it’s become an export
due to that technology and that innovation, and it’s
laid the platform for the advanced stages of
technology to go to much more second and
third generation fuels. On the food side of
agriculture, innovation has led to a lot of
— in our country, of course, we think about health and
nutrition, and so health and wellness is a
big effort of our R&D centers, and that is, of course,
interested and being in — more interested
in developing countries as well. So as the population
grows, more use of protein, more
stealth nutrition, so to speak. So to put protein, to put
fibers, to put natural sweeteners, much
more healthful products in everything, not only that
we might consume in this country, but is much
larger demand and much higher growth
rates, exports and internationally. The President:
That’s great. So while — I’m going to
put you back in charge. Why don’t we — (laughter) Chairman McNerney: Okay. The President: Why
don’t we see if — Chairman McNerney: You
know, I thought one thing that might be of interest
to you that might lead to a broader discussion is
Ginny on cross-data border flow, sort of in a
post-Snowden world, people have started wrapping
themselves in the cloak of privacy to achieve
protectionist goals, and Ginny made a — sort of a
compelling case, and it’s going to embody itself
in a letter to you. So Ginny Rometty, would
you — of IBM, would you just make the
President aware? I know it’s your third
time this morning making a speech. (laughter) Virginia Rometty: I know,
anyone could give the speech now. Chairman McNerney:
Bu it’s — Mike — Virginia Rometty: Yeah. Chairman McNerney: And I
know Mike Froman’s all over it, but it — Virginia Rometty: He is in — both Secretary Pritzker and
Investor Froman, you should know, have been very helpful
in this already, because there’ve been a number
of instances already pulled back as a result
of the efforts of the Administration, but it
is this idea that in the post-Snowden world, as
Jim described, one reaction is to keep data in your
borders, or don’t let it flow across borders,
and say things that may seem sort of innocent about, “Well, let’s keep all those
servers right in this country,” and in effect, what we often see
is that that is, as Jim just described,
under the veil of security and privacy, when in the
end, it’s a form of protectionism, and
it’s a form of, really, advocation by many
local companies, who would say, “This would be
great for my business.” So I think it pertains not
only to be able to sell globally — that
isn’t even it. It’s really about
operating, and even for their own economies, it’s
not good, because many companies make
money, if you’re in one European country, to
another European country, and — or government services
that you need that cross — we were talking about
travel earlier as — et cetera. So it’s really not good
any way you look at it, but you do see then this
proliferation, and so I — we really do
appreciate the Administration’s efforts here to bat these
down, but of course, Investor Froman
really getting them tied down well in the new trade
agreements to recognize this form of digital trade
is essential to not just operate, not just sell, but for governments to be efficient as well. The President: Well, the
— we’ve been all over this from the get go. Obviously there’ve been
enormous commercial implications to the
Snowden disclosures, and as indicated, in some
cases, there have been legitimate
concerns about privacy issues. Often times, those
dovetail with either purely commercial
interests in these countries that are, as
Ginny just said, looking to make sure it’s
their servers in their facilities with their
nationals, who are handling this data. In some cases, they’re
countries that have been for a long time
uncomfortable with the openness of the
internet, and have been using this as an excuse to see if
they can vulcanize the internet and build their
own platforms that they would have greater
control over. In both cases, what we’ve
said is, “You’ve got legitimate concerns. We will be able to
respond to them.” Illegitimate concerns,
we’re going to challenge, and you’re right that
both TPP, the trade Trans-Pacific
Partnership, and TTIP, the European trade agreement
that we’re working on, will have to have these
kinds of — an architecture that preserves fair and free
trade within this realm. I would just add, while
we’re on this topic, that we’re spending a lot of
time thinking generally about big data, its
implications for every aspect of the economy. How do we make sure that
we have protected people’s privacy, and are
mindful about potential abuses of big data, but also
that we’re taking advantage of opportunities? You know, the federal
government has enormous stores of data. You know, our — most of
your weather apps on your smartphone is because
of government data that somebody figured out
how to make easily accessible and commercialize. Healthcare is an area,
for example, where the possibilities are
endless for us as we learn more about the human genome. Our ability to potentially
detect diseases, design drugs for specific
diseases, individualized medicine so we
know it’s more effective — huge possibilities, but all
that stuff has to be done in a way that
preserves our privacy and our values. So John Podesta has
been leading a group in consultation with a
number of companies interested in this space, and
will continue to report out, because this is something
that will be relevant internationally. And if we get it right,
then it allows us to have other goods and
services that we may be able to export as well. But other countries are
not always as good about some of the IP behind
this, and we’ve got to think it through. Chairman McNerney: You
know, it’s an adjacent point that we talked about
earlier — and, Scott, I’m headed toward you a little bit — is the use of technology
in trade facilitation, you know, a more mundane use of
technology, but one that is critically
important to making stuff — Scott Davis: Logistics. Chairman McNerney: Yeah. Yeah. You got it. No one likes to use that
word, but maybe you could make a comment or two
again on that for the President. Scott Davis: Well, just
in general, I think that one thing we’re
seeing today is we’re actually seeing
small, medium-sized businesses show more interest in exporting. We’ve been working with
the Commerce Department for a long time, very
small minority in export. Today, I think with
e-commerce particularly, you know, we’re seeing a
huge demand out of the e-commerce customers to do it. They don’t have the
resources to handle the cumbersome procedures of
customs and border, but I think that, you know, the
progress we’re making, obviously in the trade
facilitation agreement, we’ve got to push hard
to implement it quicker. I think the executive
order on the single window simplifies things; we were
excited about doing that. I think de minimis,
raising de minimis, I know it’s a battle from
Ambassador Froman with some of the other
countries, but that makes it much easier, I
think, for those small businesses to do it. So the exciting thing
right now is there is still not enough doing it,
and most of them that do export go to one country. But the level of interest
is growing tremendously. Chairman McNerney:
That good. And I think — I
appreciate your work on that, Scott. And, Robert, maybe Ex-Im
was one we spent a lot of time on. The fight is a little
tougher than it has been in the past on the
Hill, Mr. President, as you know. We’ve come so — Fred Hochberg: Well,
Mr. President, I want to let you know, you will
also receive a letter from the PEC that we fully
support and endorse the five-year reauthorization
of the Ex-Im Bank and the cap moving to 160 billion. It’s clear that the
majority of businesses around the United
States, as well as businesses around the globe,
support the Ex-Im Bank of the United States. It is — one, it lends
to small businesses. 90 percent of transactions
went to small businesses from the U.S. Ex-Im Bank. Two, it earns money. Three, it creates jobs. And four, it increases
our competitiveness. And without it would be
literally unconscionable. And so we are fully
supportive that this gets done by September
30th, and you will receive our letter. President Obama: I assume
that, Jim, you’ve been in contact with BRT and — Chairman
McNerney: Oh yes. Yes. Oh, yes. And with every congressman
and senator I can find. We are helping. And, you know, I think one
of the — Fred has morphed Ex-Im, and the
argument is stronger now because of the small
business engagement that you have achieved with some of
your new structured products and initiatives. And Fred has found some
clever ways to leverage big businesses who
get loan guarantees from Ex-Im into helping the
credit ratings of some smaller businesses in
their supply chains. So I think the discussion
can be a little more broad-based as we approach
the politicians out there. Congressman Reichert, did
you have a comment on this? Speaking of which — (laughter) Congressman Reichert:
Well, I — thank you. I still like to think of
myself as the sheriff back in Seattle. So, I did that
for 33 years. I just look like I have
been here 40 years. (laughter) Congressman Reichert:
Mr. President, my name is Dave Reichert, I am
from Washington State, and of course, the most trade
dependent state in the country. About one out of every
three jobs is connected to trade. And we’ve been working
really hard — I’m on the Ways and Means Committee, I’m on the Trade Subcommittee. And when the KORUS
Agreement, Colombia Agreement, Panama
Agreement was being discussed, we formed a
team that we called the KORUS Working Group. Very successful in working
with then Ambassador Kirk and your
Administration, and really enjoyed that opportunity. We now have a group
that we have organized, hopefully you have heard of; it is called the Friends of TPP. And — President Obama:
It’s a great group. Congressman
Reichert: Yes. Thank you. (laughter) Congressman Reichert: Greg
Meeks from New York, Ron Kind from Wisconsin,
Charles Boustany, and myself, Charles
from Louisiana. I put this group together,
and I just wanted to mention that our
relationship with Mr. Froman, Ambassador
Froman, has been excellent. Their staff has
been excellent. We’ve been working
together hard on TPP. But we all recognize, and
this has been — this was the first letter
discussed this morning, and I’m going to guess that
that’s because it’s one of the most important letters — the importance of
TPA. And we, as the Friends of
TPP, would like to offer our help to you and meet
with you — that would be an extra special treat —
but staff and Mr. Froman, to see how we can gather
and garner more support in Congress on both the
Senate side and the House side, we’re
ready to work with you. The second thing I wanted
to mention, as far as the access to capital
for small business, both the Senate and the House
have been working hard on tax extenders, as you know. There is agreement in both
Senate and the House on tax extenders; it’s just a
disagreement on how long to extend these
bills like the built in gains tax, the R&D tax
credit, which we talked about, which I think really lends
itself to providing some certainty for our
businesses across the country. And I think that’s what
they’re looking for more than anything. And so, again, we offer
our help, Democrats and Republicans
sitting at the table today, we offer our help to all of you. I’m a charter member of
the group, and happy to be here. And it’s just an honor and
a pleasure to be here with you this morning, sir. And I appreciate the time
to make some comments. President Obama: Well,
the — I appreciate you, Congressman, for the
work you’re doing. Obviously, Kirsten, and
you know, our outstanding Minnesota senator, who we
are going to be seeing, Amy, and Chairman McNerney: I thanked her for Jared Allen earlier. President Obama: Yeah. That — Chairman McNerney: She
really believes in exports. (laughter) President Obama: That
could be very helpful. I will tell you that, you
know, the work we are doing around
these big trade deals, the work that Mike is doing, is
as ambitious as anything that we’ve done in a
very long time. And it’s — you know,
there have been some questions raised about,
well, you know, is now the time for trade. And I think in some cases
issues have surfaced around its impact on
environmental standards or labor standards. And what I say to folks
who are concerned about these issues is, you
should get all the facts, you should, you know,
raise all your questions, but oftentimes people are
fighting battles from 20, 25, 30 years ago. The truth of the matter
is, today the issue is not whether a company
can move to China. If they wanted to move,
they could move under the current regime. The question is can
we start getting more companies to come back? Can we raise standards in
the Asia Pacific region? Can we make environmental
and labor standards and intellectual property
protections strong enough? Because that will
advantage our companies. And that’s what this
trade deal does. It’s not — it’s going to
lower some barriers, but a lot of what these trade
deals are doing is strengthening standards in
such a way that companies that play by the rules and
countries that play by the rules are going
to benefit. And those who are skirting
the rules are going to find that there are
stronger enforcement mechanisms in place than
there had been in the past. And nowhere is that more
true than in something like intellectual
property. We just talked
about innovation. It’s tough to innovate if
you know that somebody is going to do a knock off of
your innovation six months later and undercut
your market. So I really appreciate the
work that you’re doing on this. It is going to be a
bipartisan piece of legislation. I will be happy to meet
with Friends of TPP. I think it’s probably more
important for me to meet with the enemies of TPP. (laughter) President Obama: But, you
know, it’s always nice to get some encouragement
before I go into the lion’s den. So — but obviously,
we’d benefit from some strategizing, figuring
out how we want to frame the issues, what
questions other members have heard that they’re most
concerned about that we can respond to. So with that I have gotten
my cue that I’m going to a meeting that is probably not as fun as this one, but important as well. I just want to say to
Jim and Ursula, and to everybody on the council,
thank you so much for your leadership. We really appreciate it. All right. Chairman
McNerney: Thank you. (applause) (inaudible commentary) Chairman McNerney: Well,
I think that kind of an engagement, for those of you who are new, we’ve come
to expect and appreciate from the President. So again, on behalf of
all of us, we thank you. I think now we have
an opportunity for Secretary Kerry to make
some comments. Secretary Kerry, it’s
great to have you here. Secretary Kerry: Jim
thank you very much. I’m going to — appreciate
your leadership enormously, and I’m going
to have to race through this a little bit,
because I have to be at this unpleasant meeting
that we’re about to have. I may be one of the
reasons it’ll be unpleasant. (laughter) Secretary Kerry: Or at
least I may bring the news that will help
make it unpleasant. At any rate, let me just
say that I have a great sense of what is
happening here for a lot of different reasons. Number one, I spent a lot
of years as the chair of the Small Business
Committee in the Senate, so much of what you’re
talking about, Vanessa, and others, are, you know,
completely in sync with and understand. In fact, we were pushing
very hard to teach small businesses how they
could, in fact, export. And I think we began a
process of connecting them to the Internet and to
those entities that help people to be
able to do so. But what I want to begin
by saying to all of you is that I want to
thank you and underscore the degree to which I run into
this all around the world, that American business is
absolutely extraordinary. And while I — and I think
all of us have a deep appreciation of the very
difficult — people have forgotten what it
was like when President Obama came in, in 2009. In fact, even before
he came in, the Bush Administration was
turning to him as the President-elect to
ask him what he was willing to support. And he was making
decisions about bailout and, you know, where
Congress should go well before he was sworn in. And the degree to which
those decisions created the framework for a
recovery was critical. But we know that in the
end, the government decisions create the
framework and the structure; your
decisions and your innovation, your commitment to R&D, your
commitment to innovate are really what makes
the difference. You create the jobs, small
business, and what become big businesses
because of those decisions. And it is — I run into
this all around the world that, you know, people
have enormous respect and jealousy for what we
are able to do here. And it’s one of the
reasons why we are such a safe haven for
investment and so powerful globally, though challenged. And the second thing I
want to say is that what we’re talking about
here is not just about business. It is the projection
of American power. It is our leverage to be
able to have an impact in solving a lot of problems,
and it is vital to the security of the United
States, because to the degree that we can
project economic opportunity, take it to — export economic
opportunity to places, we address the crisis of
millions, literally millions of young
people in places where they don’t have opportunity,
there is abject poverty, and that is the breeder
of terrorism. And that’s what we’re
fighting in places where there are concerted
efforts to grab these young people,
indoctrinate them, and then put them on their way. I’m telling you,
all over the place. Countless foreign
ministers have told me about the challenges in
their countries of these young people who
don’t have jobs. So I came into this job
100 percent committed to a fundamental notion that
foreign policy is economic policy, and economic
policy is foreign policy. And in today’s world more
than ever before, because of globalization, which
no one can ever and want — you know, if you’re smart
you don’t want to, but some places try to put the
genie back in the bottle, and it’s not
going to happen. We also are facing much
more intense competition from other countries than
ever before, and you all know this too. And I might add, and it’s
been an eye opener to me, even as Chairman of
the Foreign Relations Committee, I have not
seen — I hadn’t seen the levels of
corruption that I see as I travel to various places. And it’s pandemic
and dangerous. And you all are competing
in a world where you have to deal with that. So it’s tricky. It’s as tricky as
it’s ever been. And I think there are a
couple — And in our department we
deal with almost
1:35:41.800,1193:02:47.295
and each of the letters are important. every one of these letters. We are linked to you. And I’m proud to say with
Penny, we have the best relationship
with the Commerce Department we’ve ever had, the
most productive. It’s a combination
of commitment. And we’re working very
effectively to maximize our projection of
economic capacity abroad. And I’ll just say a couple
of quick words about all of that. We are currently selling
more goods and services abroad than any time in
our history, but we could do better. One of the things I
remember when I was a senator traveling to
Hong Kong, we — I was dumb struck. We had three foreign, commercial service officers. And they told me we were
losing billions of dollars of business because
there were RFPs they couldn’t keep up with. And the French and the
British and others had these vast pavilions, and
were able to do business, and convene and
sell at market. And we weren’t in the game
as much, because you know, we’re — take it for
granted to some degree, or have historically. We don’t anymore. And we also have had a
record — 70 million international visitors came to the United
States. So I’ve pressed
our diplomats. I’ve issued instructions. Historically in the State
Department, being the economic officer in
an embassy was not necessarily a route to
ambassador and promotion, or even to the
highest jobs. Now we want to make
sure everybody in the department is an
economic officer. I mean that. And I’ve sent cables to
every single embassy and outpost in the world
instructing people to engage in proactive, forceful economic outreach. We’ve created
a direct line. We’ve asked our
ambassadors to call U.S. businesses directly to
explain foreign business climates and foreign
business opportunities. And in 2013, our
ambassadors held 87 large conference calls,
average of 30 companies participating
on each call. In 2014 we’ve already had 31, and our goal is to do 100. And our surveys show that
over 80 percent of the businesses that
participate in those say they will make a
proactive business decision based on the call. So that’s creating further
export and engagement. We are creating a business
— we have created a business information data
system base called BIDS where we identify the
opportunities for business overseas. We’ve collected over 100
billion in infrastructure projects or foreign
opportunities on the site now, and we
encourage businesses to investigate the opportunities there. We want to promote it
more and find ways to. We are working with
SelectUSA, and are sending our ambassadors
out to shake the economic tree, and try to engage
more effectively. I am hugely supportive of
and talk about everywhere the TTIP and the TPP. These are enormous
opportunities. And we need to — you
know, we’re prepared to come help sell Congress. It’s not just, as I say,
part of an economic benefit to us. It is going to be critical
to Europe’s resurgence, to the effort to provide job
opportunities in vast parts of the world, and
to raise the standards and fight back against
corruption and other things. In addition, we have an
African Leaders Summit for the first time in history. We will have almost every
president, leader of Africa come here in
the beginning of August. Businesses will be
deeply involved in that. We’re working through
everything we’re going to do there. And I want you to
think about it. I was just in the DRC and
in Angola, Ethiopia, South Sudan, which is more of
a complex thing, but the opportunities are
just stunning. The Chinese are
there in force. They’re building
everything for them. They’re bringing their
people there to build it which is not terrific
in terms of policy and otherwise. They’re not loved. The Russians are there. We are loved, and we’re
not there enough. And it’s not because
we don’t want it; it’s because, you know, with
all due respect, we’ve got to get a Congress that
is willing to put some meat behind this policy. And it pays
100 times over. We’ve got to find a way to
invest more in these kinds of initiatives. In addition — I’ll
just end quickly. We’re working very hard on
the level playing field issues. We intervene constantly,
particularly, obviously with China and some
other countries. We continually work — I
was just in Poland where we signed an
agreement, a framework to establish bilateral
innovation collaboration to bring entrepreneurs,
innovators, financiers, educators together in order to
maximize, create the witch’s brew of new innovation and opportunity. We want to replicate
that in other countries. And the last thing with
respect to sort of what we’re doing, the Bureau
of Consular Affairs, we are super-focused on the visa
issue and facilitation. We’ve just had some
meetings, but — here’s the “but” — we’ve
got foreign fighters in Syria. And they come from
America, from Britain, from Holland, from France,
from Germany, a lot of places. And even as we want to
facilitate with the waiver program and other
things, we’ve got to make sure, folks, we’re not turning
a blind eye to the possibility that these
people are going to come over here and elsewhere. So there’s always
going to be a balance. We think we can work
that through and still facilitate a quick and
easy entry, which we want to do. And that brings me
literally to the — oh, our team. I’ve hired a terrific
new team over there. We have Undersecretary for
Economic Affairs Cathy Novelli, who came
from Apple Computer. She is doing a
terrific job already. We just had a two-day
extraordinary conference on oceans and
economic opportunity there. Charlie Rivkin, who is
here with me, is the Assistant Secretary
for Economic and Business Affairs; he was our U.S. Ambassador to France, and
before that he helped turn the Jim Henson company into a billion-dollar enterprise. And Scott Nathan is a
former fund manager from Boston. He runs the Department
Office of Commercial and Business Affairs — and
other people coming in. So we are building a team
that knows business, comes from business, understands
how to project, and what to do. Last, last comment I make
is this: I heard the talk about
infrastructure. And we’re working a very
new, innovative program to try to marry the Ex-Im,
OPIC, AID, World Bank, IMF, and private
sector in a way that they haven’t been brought together. Our model is being put to
work in the West Bank, Palestine. And we are trying to
change lives, create investment where it
wouldn’t normally happen with a long-term view to
the possibilities for the return on that
investment, which are real. Coca-Cola is a big
participant in this, and others, and we want
to encourage everybody to do it. But the — you know,
you all — I beg you. I’m going to put my Senate
hat back on for a moment. I am right now not
going through the major terminals of our airports. But I’ve been through
them for 30 years. (laughter) Secretary Kerry: And in
the last year, it’s just — it’s so sad. It’s actually — it’s sad. It’s depressing to see how
someone who travels to America is welcomed still
and/or the ordeal they have to go through where,
you know, you don’t have free carts to be
able to move your luggage. And if you’re going to buy
them, you haven’t changed your money yet, because
the money change is on the other side of the thing. It’s sort of —
it’s not a system. So I pray that we’re going
to focus more on that. And the tourism thing, we
haven’t begun to tap into what we could in terms
of putting together our communities that do
reenactments all across the country,
schedules of reenactments, possibilities of bringing
people here for, you know, certain periods of times. I just think we could
tap into that much more. We could do an
infrastructure bank in America. I know this. The Chinese have told
me they will invest in American infrastructure. The sovereign funds of the
Emirates and of the Qatar, and elsewhere,
looking for return investment. If you did energy and
transportation and water, all of which have a
revenue stream, to rebuild this country and put
20 million people to work. So I hope you all will
make that a major objective of your efforts. And if I don’t get over to
the White House, I’m in trouble. (laughter and applause) Chairman McNerney:
Thank you very much, Mr. Secretary. Now, we’re not running out
of air speed and altitude yet, but we have a little
bit of time pressure. But we want to hear
from everybody. So, Secretary Foxx, could
you keep it rolling for us? Secretary Foxx: Well,
I have to say, Jim, Secretary Kerry could
not have said it better. So it’s great to —
great to have not only a Secretary of State, but a Secretary of Transportation, too. (laughter) Secretary Foxx: I want to
applaud the work of this group. And I want to say that the
DOT stands ready to be supportive of the work of the — of the — of the PEC. I want to give a shout-out
also to Scott Davis. I went on a tour
recently of American infrastructure, and
Scott was good enough to welcome me at the Louisville,
Kentucky plant, which is about a 1.5 million
square foot plant. Freight moves in there,
touches two human hands, moves through in
13 minutes a clip. But one of the things that
Scott told me which is emblematic of the
challenge we face in infrastructure in
America is that across his system a five-minute delay
results in a $100 million loss. And that is my transition
to talking about some of the challenges and
opportunities we have in American
infrastructure right now. Since the last time we
met, I mentioned then that we had formed a
National Freight Advisory Committee that we were using
this committee — it’s composed of 47 people from
all around the country — we were going to use that
committee to develop a national strategic plan
for freight, a critical part of our
infrastructure in this country. And just parenthetically,
we have about 50 freight programs in the
country, because each state kind of has its own thing. So we’re trying to figure
out how to link these issues to cover gaps and
relieve choke points. So we have a great group. They’re working
on a great plan. But the challenge we now
face is that the Highway Trust Fund is going
to run out of money as soon as August of this year. And we’re about 10 years
out from having a six-year reauthorization bill. And the resources
that we’re putting in infrastructure, frankly,
we’re underinvesting. I think what Secretary
Kerry said about airports is exactly true of also our transportation systems. And that’s why the
President and I have introduced the
Grow America Act. It’s a bill that’s
designed to change the conversation about
transportation. And I’ll just point out a
couple of things that it does. The main thing it does is it puts $302 billion into infrastructure over the next four years, increasing
it by $90 billion over that four-year period beyond
what the Highway Trust Fund would normally track. This is because we
recognize that we have 14 billion tons of freight
over and above what we’re moving today that we’ll
need to move over the next 35 years,
basically doubling the amount of freight. So if we’re stuck with the
same system, we’re going to have more
congestion, more choke points, and less ability to attract
the jobs we’re all talking about. As part of this plan
we have a $10 billion allocation specifically
targeted to implement this freight plan. And the reality is that
we’ll have a great plan, a great group putting the
plan together, but without reauthorization,
without targeted resources, we’re not going to be able to
get that plan implemented. So I come here, really,
asking for your help in getting Congress to act
on reauthorization, and not just the funding piece,
which is really important, but helping us with
some of these policy pieces like freight that are
going to be critical to the country long-term. Chairman McNerney: Thank
you, Mr. Secretary. We spent yesterday at
the BRT talking about infrastructure and getting behind political advocacy here. So we’re with you,
both here and there. So I appreciate your
leadership here. Mike, did you want
to have a comment? You’ve received so many
nice comments today. It’s almost dangerous to
say something yourself. Representative Froman: I
was going to say, it’s nice to have the
President and the Secretary of State be
your warmup acts on your issues. So I’ll be brief. I mean, you know
what our agenda is. It’s TPP, TTIP,
Information Technology Agreement, Trade and
Services Agreement, Environmental Goods, AGOA,
which the President talked about,
doing more in Africa. We have GSP renewal, and
of course we have TPA. Many of these require
congressional approval. We’re working with our
partners in Congress to try and build support for
these to move them forward at the appropriate time. And I’ll just saw a word
about TPP, just to build on what the
President said, because, as he said, a lot of the debate
around TPP is a debate about a trade policy that he
explicitly distanced himself from
and went beyond. It’s about trade
policy 25 years ago. You know, TPP is not your father’s free-trade agreement. This is a new type of
trade agreement where instead of having labor and environment provisions as
side agreements, afterthoughts, they’re at the center of
the agreement. They’re stronger
than ever before. They’re more ambitious
than ever before, and they’re subject to binding
dispute settlement. Now, that’s what
we’re seeking in this negotiation. Same on IPR enforcement,
strengthened IPR enforcement, even as we
make sure we’re seeking the right balance
between innovation and access to medicines. For the first time ever,
we’ll have disciplines on state-owned enterprises
so that when they compete against private
firms they’re competing on a level playing field, and
not taking advantage of their subsidies in a way
that put our firms at a disadvantage. And then to build on
Ginny’s comments and many others, this is — this
is the first time we’ll have a trade
agreement that deals with the digital economy, and
bringing into the digital economy principles from the
physical economy, like the free-flow of data and a
free and open Internet. And so — and then finally
I’d say, very much front and center in all of our
thoughts about TPP — in fact, just the first trade
agreement that will have a chapter specifically on
this — are small and medium-sized
businesses, because we recognize that’s where the real
growth opportunity is, that’s where the real
driving force of new jobs are. We’ve got a lot of work
to do to finish the agreements, and we’ve got
a lot of work to do to build support for them. We are appreciative of all
the work that the business community has
done to date. We’re going to need a lot
more of it going forward to explain the benefits of
trade, particularly the small and
medium-sized businesses as we take this campaign
forward. But there’s a tremendous
amount at stake. And I think the President
alluded to this. These are as important
strategically as they are economically. And there’s really —
it’s nothing less than an opportunity to set the
rules of the road for this vitally important
region in the Asia Pacific and then — and then with our
European partners at a time when there are
competing visions of what should govern the international trading system. And I can tell you the
competing vision is not one that’s good for
American workers, or American intellectual
property rights developers, or for
environmentalists, or for people who care about a
level playing field in the digital economy or SOEs. So there is a huge amount
at stake here, and we’re looking forward to
working with all of you. We appreciate your
advice and your support. We’re looking forward to
working with our partners in Congress to move
this agenda forward. Chairman McNerney: You
know, Mike, I’m not sure everyone realizes
the size and the ambition involved with what you’re doing. I mean, there has never
been in our history a third of this level of
engagement, if you measure GDP to GDP or the
number of countries. Not even close. So you need our support and we’ll be there for you. Okay. Senator Klobuchar, did
you have any additional comments you’d
like to make? Senator Klobuchar: Just to
say — to thank, first of all, Penny for her
incredible work. I talked about the export
control list last time. And I know there’s been
some advancements with that and really
the whole team. Our state’s unemployment
rate is down to 4.7 percent, mostly all about
exports, and what we are sending out in Minnesota. To follow up on Secretary
Kerry’s comments for anyone that’s here, we
are not asking for a visa waiver with
Syria, I promise. (laughter) But we are — we really do
want to move — continue to speed-up the visa
times for the countries that we do trust and have good
relationships with, as Arnie pointed out. Video conferencing,
something that he supported when he was in
the Senate, is something that we think we
should experiment with. And the last thing I just
wanted to mention was, having been both in Canada
and Mexico lately, this whole — the President
having met with the Prime Minister of Canada and
the Head of State of Mexico, is this idea of the new
day in America and working more with these two
great trading partners, and really seeing it as
a regional force is something I think we need
to develop at every level. And they are — both
countries are so excited about this. And I just want to seize
on this in terms of our infrastructure at the
border that I already brought up, the Windsor
Bridge, fixing that guy, that troll that runs it
with one private citizen that’s collecting
all the money. The Canadians are really
— they’re willing to pay for the entire bridge. And we have to get
that thing done. It’s a bottleneck. And I think we can learn
from some of the things they’ve done with
their infrastructure funding. And the last thing I
wanted to mention, having spent my week on the Med
Tronic issue, being the home of Med Tronic and
knowing that this deal will actually bring 1,000
new jobs to Minnesota, but at the same time very
concerned about what this means to the future —
I talked to Penny about it yesterday, and Jason —
that we need to get this tax reform going in a big way, and I’m not — I’m talking to the converted
here, but — because these incentives
are in place. And as we were talking
about yesterday, we might not be able in Congress
to make perfect the enemy of the good. And we have to find some
way to create incentives to bring some of this
money back so we don’t have to toast to my
company with a Guinness in Ireland. So that is — that’s my
hope as we go forward, because I do
think it’s going to have effect on everything we’re talking about here if we continue to
have these kinds of deals go through. Chairman McNerney: Well,
all of us want to keep working with you in
that spirit, Senator. Thank you very much
for your comments. Senator Gillibrand, do you
have any additional things to say. Senator Gillibrand: I do. I want to follow up on the
conversation that Ginny started about the
Internet and really what the global conversation is right
now, because I took a delegation from the
Senate and the House to Asia this fall. And one of the issues we
put on the agenda for each of our meetings — we
were in South Korea, Japan, and China — was cyber,
because we thought the area of agreement could
at least be creating international protocols to
enforce cyber-crime, a set of standards
internationally, because obviously if three guys
in a basement in China are attacking the United
States we have to have some protocol to say,
“Can you please go arrest them?” We don’t have that today. But interestingly
when we were in China specifically, they see
it as a national security priority that they get
to steal our intellectual property,
because these are government-owned, government-run businesses. So they converge spying
with intellectual property and their right as a
country, who are investing in their
businesses to steal our intellectual property. But when I challenged him
on this issue of national security risk, he
said his biggest national security risk in China are the
blogs, and how the blogs are criticizing him and the
administration. So that is their view. And they see everything in
the context of Snowden: that you created the
Internet, you’re the one who’s stealing all our
information, so we’re going to do what
we need to protect. So this is a much bigger
conversation that I want this council to look at. And specifically for U.S. businesses, Congress has
not passed legislation on cyber security, which is a
huge impediment because a lot of companies are
spending a lot of money to try to protect their
infrastructure. And then a lot of
companies are choosing not to. And the first time they
hear about cyber-crime or cyber intrusion is from
the FBI when they knock on their door and say,
“We’ve been tracking. You’ve been — you know,
$1 billion of your data has now been stolen
and you need to do something about it.” So I’m working on
legislation to create incentives for
companies to make two levels of investment: first, to have
a tax credit to do the baseline assessment. What are the protocols
you have in place? Is it protecting
your information? Is it safe? And the second thing we’re
creating a credit for is, “Are you investing in
hardware, labor, and software to create this
flexibility to see ahead of the curve?” So as an issue for our
next meeting, I would love to have someone
address the issue of cyber, the importance of
public-private partnerships, particularly
with the U.S. government to incentivize
businesses to invest in it in a way that’s
positive to them. And if we create this
incentive of a baseline, it’s not
negative. The reason why Congress
lost this debate last time is because they
felt like they were being taxed. They felt like they were
being asked to spend too much money. So if we can do it as
positive reinforcement, giving tax credits, I
think we can get not only the Chamber
of Commerce, but the businesses around this table to begin to
look at cyber far more holistically, because when
we’re dealing with trade it is — it is
all convoluted. And that’s why they’re
being so aggressive with these anti-competitive,
anti-trade policies to control the Internet
in their countries. So I hope that we can do
more collaboratively on how we get our businesses
up to snuff on cyber-crime issues, and then
work together. And I just want to address
the thing that Secretary Kerry mentioned
on infrastructure. He was our leader on the
infrastructure bank when he was a senator. And he wrote a very, very
good bill, which was stymied in the House
and the Senate because it was a bank. So we are now working
on an Infrastructure Authority, which has two
different versions, one with financing, and
the other with just streamlining. So when we were dealing
with the financial collapse, one of the
things we — the President did was
streamlined, “How do you create infrastructure investments
that don’t take forever to get approvals for the
environment and other things?” So we’re doing two
versions of that. Both have
bipartisan support. So we will work with
industry and every state to try to get the
political support we need for that. Chairman McNerney: You
know, I think your recommendation — you laid it
out perfectly on cyber. I think your
recommendation we will take up. I think we had a letter
on it three or four years ago. The issue is much bigger. It bumps up against
economic growth, exports. It bumps up against
everything now. Senator Gillibrand:
Everything. It’s national security,
it’s economic retaliation, and it’s actually getting
our own house in order, which we haven’t
even done. Chairman McNerney: So
we’ll make sure the staff gets with your staff
to make sure we’re defining it the way you’ve
laid it out perfectly. And so we’ll take it up
and readdress the letter. Thank you very much. Congressman Reichert,
any other comments? Congressman
Reichert: Real quick. Chairman McNerney: Sure. Congressman Reichert: I’ve
mentioned TPA, TPP, the importance of those. We’re ready to
work with you. I really wanted to
reinforce the comments made regarding Ex-Im Bank. I am very supportive of
the letter, as you know. Ursula mentioned there is
huge aversions to moving forward with that in
Congress, especially on the House side. We really need your help. So please come up
and visit those. As the President said,
there are some enemies. Those are the folks
we need to visit. We’re trying, but
we need your help. Appreciate it. Thank you. Chairman McNerney: Okay. Thank you, Congressman. And I appreciate your
leadership on the whole thing. Administrator
Contreras-Sweet, did you want to make an
additional comment? Administrator Contreras-Sweet:
Just briefly, thank you. First, thank you for
engaging me in my first meeting. Thank you very much. Chairman McNerney: It’s
great to have you here. It’s great to
have you here. Administrator Contreras-Sweet:
But mostly I really want to thank the entire council for all the work that
they’ve been doing on behalf of small
businesses. You know, we don’t want
to hear more stories like Vanessa’s. And lamentively,
we’ve heard too many. And so that’s
important work. Just understanding, as was
said earlier, that the small business
community is creating two out of three net new jobs,
and that small businesses employ half of the
private work force is something that we have to
take very seriously. And so I’m delighted by
the efforts that have been undertaken here. I just wanted to say for
the SBA’s part there’s already been such
extraordinary work done by my predecessor
under this Administration. And so I’m just delighted
to be able to stand on the shoulders of that effort. But moving forward, as a
banker having started a community bank in Los
Angeles dedicated to the underserved where there
were so many African Americans, Latinos, Asian
Americans, women who were being undeserved,
I was delighted to be able to respond with the
financial institution to address that. So I came in
with that view. And what — and as I
mentioned earlier, it was so important for us to
consider the technology that we can now deploy to
make certain that banks do the smaller dollar loans
that help spur economic activity that help small
businesses get started. And so we’ve just launched
a program called Startup, and it goes all the
way up to Scale-up. And in between we have
the growth accelerators. We’ve just launched —
I’ve just announced in Boston that we’ve just
launched a program to identify 14 communities
where we will invest to create growth
accelerators. And we think that’ll
help create innovation. For the counseling, you
know, SBA has one of the vast — a very impressive
network of counseling centers throughout
the country. And so I want to make
certain again the Administration is
committed to assuring that these programs are
standardized and that there is no wrong door. Right now the programs are
really effective at making certain that the
counseling goes to the extent, you know,
of SBA programming. But the Secretary of
Commerce and I have a website that we work on
called Business USA, and it’s about “no wrong door,
“so that when somebody goes to that website they
can reach all of the government departments. We think we need to bring
that to life through our counseling centers. They should be able
to consult on what’s available through the
Ex-Im Bank, through the Ag Department,
through DOE, DOT, DOD, and so we’re revamping the way
we think about our counseling centers. And lastly, you all know
that the United States is the largest procurer in
the world, with 23 percent being dedicated
to small businesses. And so that’s a
marvelous program. We’ve made great strides,
and I think we’re going to have some really good news
about our progress in that regard. But what’s important now
is that we expand it so that small businesses can
diversify their portfolio and also include
private sector work. And so I was delighted
that Jeff Zients took a great amount of leadership
in that regard to assure that we expand our
American supplier initiative, which takes
that concept, and that program, and that
support to the private sector. So I look forward to
working with you in that regard to continue
to support our small businesses. Thank you, Mr. Chairman. Chairman McNerney:
Thank you very much. Appreciate your
leadership, and look forward to
continuing to engage. Dep. Sec. Harden from Ag? Deputy Secretary
Harden: Yes, thank you. Chairman McNerney:
Welcome back. Deputy Secretary
Harden: Thank you. Thank you very much. U.S. Ag Exports are continuing to increase. And we’re on track for
another record high this year, which is
very good news. But we’re not resting
on our laurels. Secretary Vilsack is in
Europe this week meeting with his counterparts
regarding TTIP and some of the issues that we
have with Europeans. So we’re hopeful there. We also had good news this
week that Hong Kong is fully opening the market
for our beef with no restrictions, so
that’s positive news. And I’ll just mention
an initiative that the President announced
when he signed the Farm Bill back in February
called Made in — Made in Rural America. So it’s really a new
initiative for rural businesses to engage
for the first time in export markets. So we’re very
excited about that. Secretary kicked that
off this month in Pennsylvania, and I know
other Cabinet members are going to be doing sessions
around the country. Chairman McNerney: Thank
you very much for your comments, and welcome. Deputy Secretary Poneman,
do you have a comment from Energy? Deputy Secretary Poneman:
Thank you, Mr. Chairman. Just three points. I know it’s late. Point one, to Senator
Gillabrand’s point, in the electric sector — and
our responsibility as the Sector Coordinating
Committee for the critical infrastructure
of the country — we have quarterly meetings
at the CEO level. We have worked with the
industry to provide risk maturity models so that
— know the nature of the risk. We are providing informational sharing tools. So not only are we very
happy to work with the senator, but with the
present export accounts, because there is a huge
risk — obviously, we’re realizing already,
but there’s also huge opportunities. And there’s good
work going on. And I think we can
work with you on that. Second point, to echo
Secretary Kerry, we go all around the world. I’ve recently been in
Argentina, in Chile, and Mozambique. And people are very eager
to work with us across a whole range of
energy sector opportunities. And our company, to
mention just two PEC members, AES and Andrés
Gluski down in Chile, and in Argentina with the
gas opportunities Andrew Liveris — these are
tremendous game-changing energy opportunities
for American business. We need to and we
can partner well. Our job is to come in
and try to keep the transparency, the contract
sanctity, the rules of the road clear, and I
think that’s working. Our role is also to make
sure that when they develop these resources
they do so in a prudent in a sustainable way so
we can keep the public support for it
across the board. And the initiative the
President drove with power, Africa, and
Secretary Moniz going there to lead the energy
(unintelligible) Secretary Prtizker down there
recently, that’s a real game-changer. Third point, the
initiative that Secretary Prtizker mentioned on
the innovation hubs, this has been already a
game-changer. The additive
manufacturing, which you are already seeing the
beginning of the good results there — the
— and you know this very well, sir — the upcoming
solicitation for advanced composite
materials, the lightweight vehicles, both aircraft and
ground transportation, possibility of using that
to make CNG tanks — so the applications for CNG on our transportation fleet,
also potentially a game-changer. And then of course the
power electronics that pervade our entire
economy, also. 60 percent of power ends
up going through motors. And if you could
light-weight those, and if you could get the hotter,
faster, more powerful electronics there,
these are those early-stage investments. And as you said, we don’t
know exactly which ones are going to pay off. But when they do, it
can be incredible. And I would just close by
noting we invested $137 million back in the ’70s and ’80s in strange technologies
having to do with horizontal drilling and hydraulic fracturing. And that is what is behind
the tremendous bio-wave of natural gas we’ve
seen to this day. So we’re ready to work
with all of your members. Chairman McNerney: Well,
thank you very much. And there’s some exciting
stuff there and important work, so I appreciate it. Caroline, did you want
to make a quick comment? Caroline Atkinson: Just
very quickly, again, three points. First of all, building off
what Dan says — and I’m the President’s
International Economic Advisor (unintelligible)
the G-20 and G-7. So I take everybody’s
agendas and try to sell them in that — in those
groups, including yours, which I’m
interested to hear. Building off from Dan,
climate — and I’m not sure if you’ve been
able to discuss that today, but that is an extremely
important issue for the President. It’s also an issue where
I think mistakenly people have seen it as contrary
to business interests. But as Dan said, we can be
the leaders — we are the leaders in technology
and clean energy. And that is increasing
acceptance of the need to adopt those sorts of
solutions worldwide. And it is a real growth
area for the United States. My second point is a tough
one, which you discussed a bit this morning. Part of the reason
I’ve been in and out is because of the situation in
Ukraine and Russia. I know that no business in
the United States likes to hear about sanctions. But I want to assure
you that we are really listening and want to hear
from any of you about how best we can work
on that front. And one clear message has
been, for several months, “We need to work with
partners, we need to be close with them.” And that we are — we are
working to do all the time. And then finally, just on
a broader level, I can say that the debate in the
G-20 has really shifted. Secretary Kerry referred
to the President’s leadership on issues to
do with growth, and job creation, and financial
sector reform. Those were hard and
difficult issues to get agreement on. But for the last year or
so, and especially this year in the G-20, there is
agreement that the main goal for all of us
around there and for the leaders is to promote
growth and jobs. And for us that also means
other countries opening up their markets for a more
balanced growth worldwide. Thank you. Chairman McNerney:
Well, thank you. And, Caroline, I can — we
said it over breakfast, but the Administration’s
willingness to engage when geopolitics bump up
against commercial interests has been
extraordinary. Jeff, and you, and others
have — and we highly appreciate that. And we know it’s
tricky and hard. So we get it. I think that Ursula or
Secretary Prtizker, any additional comments? I would just comment
that our next meeting is scheduled Thursday,
September 18th. Now, Ursula’s mission I
think leaves around the — Poland, Turkey, maybe
Ukraine — around the 28th-ish. Still time to sign up. Yeah Secretary Pritzker: 28th. Sign up. (laughter) Secretary
Pritzker: Sign up. Send recommendations
and suggestions. Do not drop out if you’re
already signed in. (laughter) Chairman McNerney:
She will call you. Thank you. Meeting is adjourned.

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