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Robert Hormats

Robert Hormats

Posted: September 6, 2010 10:12 PM

The State Department's Jobs Agenda

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Normally, my blog entries are short and succinct. (Or, at least, I hope so!) But I wanted to use this entry to provide a bit more depth about one of the State Department's highest priorities: supporting American jobs.

As President Obama underscored in his address to the nation on August 31, "Our most urgent task is to restore our economy, and put the millions of Americans who have lost their jobs back to work." Under Secretary Clinton's leadership, the State Department is focusing fully on that goal by advancing an international economic policy that promotes opportunity and job growth for Americans.

The primary task of the State Department's international economic policy is to promote American economic success in the global economy. That means crafting policies that help create -- and sustain the growth of -- well-paying, productive American private sector jobs. We do so by using a wide range of tools: promoting exports, protecting intellectual property rights, expanding trade opportunities, attracting foreign investment, supporting a fair business environment abroad and drawing on the successful experiences of other countries.

Secretary Clinton has made our jobs agenda a top priority and is leading our efforts to ensure that our diplomacy supports American workers. As the Under Secretary for Economic, Energy and Agricultural Affairs, this is my central focus -- as it is for our entire team here at the State Department. We also recognize that a strong domestic economy, with high levels of employment and growth, is the fundamental base for a strong foreign and national security policy.

Our overriding aim is to connect with the concerns and aspirations of the American people. While many of us in the Department actively engage with representatives of other countries to promote American interests abroad, we are engaging at least as actively on the home front with leaders of businesses -- large and small -- as well as labor and farm groups. Our international economic policy must earn the support of these groups by delivering tangible benefits to them, or it will not be sustainable -- especially at a time when so many Americans are feeling economic pain. And the most tangible benefit we can deliver is to demonstrate that what we are doing abroad increases the ability of American companies to generate good jobs at home.

To achieve this, we are taking action in several key areas:

Implementing the President's National Export Initiative.

The President has set the goal of doubling American exports over five years to support two million new U.S. jobs. To achieve this goal, we have mobilized senior officials here in the Department and in our embassies abroad. As Secretary Clinton has noted,

"Other businesses from other countries have a strong partnership with their government; whether it's state-owned enterprises from China or private companies from Europe, they often have much more support from their governments than we have in recent years given to our businesses."

The Obama Administration is stepping up its efforts to support U.S. companies competing in global markets -- and the State Department is actively supporting this effort. We believe that American businesses should receive the same enthusiastic and forceful support from the top levels of our government as foreign competitors receive from theirs. This is vital to creating jobs at home. Exports currently support 10 million American jobs. We know that by helping more companies, particularly small and medium sized companies, to export and tap new markets, we can substantially boost that figure. But we also know that many of the largest American companies are our biggest exporters. They frequently must compete against national champions abroad supported by foreign governments. So we work closely with them to actively advocate for their export sales.

The profits our companies make from sales abroad play a key role in funding more research and investment at home. And that will lead to new hiring and additional well-paying jobs for Americans.

Secretary Clinton has mobilized her team here in this Department and all of our embassies to ensure that our businesses are being fully supported overseas. And she personally has been a strong advocate on her trips abroad. Day-in and day-out we work alongside colleagues in the Department of Commerce under Secretary Locke's leadership and with other agencies. Our embassies provide enormous support to American businesses in foreign markets. Our diplomats are also traveling across this nation to help American companies learn how our embassies can provide information and contacts for the development of business opportunities in other countries. In fact, a group of our ambassadors to Middle Eastern nations will visit several American cities in mid-October. And we have similar plans for our Asian, Latin American and Central European Ambassadors.

Opening markets abroad -- and keeping them open.

We pursue reverse trade missions and comparable programs because trade is a contact sport. As President Obama noted, 

"We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores."

The President is exactly right. There is a temptation during periods of high domestic unemployment to turn inward. But that is exactly what we should not do. That would cost us jobs, not increase them. Instead, we must take greater advantage of opportunities to increase our exports. With 95 percent of all the world's consumers living abroad, expanding trade must be a central component of any job creation strategy.

Ambassador Ron Kirk and his team at the Office of the United States Trade Representative are leading the effort to further open markets abroad. We, at the State Department provide strong support. The Administration's key priorities include the U.S.-Korea Free Trade Agreement and the Trans Pacific Partnership, which will provide new opportunities in the Pacific for American workers and companies. Completing the Doha trade round with ambitious and mutually beneficial results is another priority. We, and our trading partners alike, need to determine whether we can achieve the greater level of ambition necessary to make an agreement feasible. We are also using forums like Asian Pacific Economic Cooperation (APEC) and the Trans-Atlantic Economic Council (TEC), where State plays a central role, to achieve more open markets.

The State Department also supports the efforts of USTR and the Commerce Department to enforce the rights of American companies under the World Trade Organization (WTO) and other agreements. Together, we press governments in myriad ways to end discrimination against American goods, farm products and services. The strong alliance between USTR, Commerce and the State Department on these matters demonstrates to other nations our resolve to defend our interests whenever violations occur.

Protecting American Intellectual Property.

Our greatest assets in today's knowledge-based economy are the ingenuity and creativity of the American people.

President Obama has declared the Administration's commitment to "aggressively protect our intellectual property... It is essential to our prosperity and it will only become more so in this century." Led by Vice President Biden and a top White House team, senior officials of the State Department in Washington and abroad are carrying out the President's commitment to ensure that intellectual property is being protected around the world. My colleagues and I meet regularly with business leaders, union officials, and leaders of the technology, entertainment and pharmaceutical industries to identify problems in this area and forge effective responses.

Protecting our intellectual property -- the patents, copyrights, trademarks, innovative technologies, and creative products that drive our economic growth against piracy, counterfeiting, forced transfer, and discriminatory procurement practices -- is a core interest of the United States. The stakes for American jobs are high. The information and telecommunications sector alone -- one of the many sectors in our country that depend on intellectual property and constant innovation -- employs five million people. And we want to enable American workers and businesses to continue innovating, creating, and designing the products that will ensure our prosperity for years to come. Ensuring that their innovative products are protected against counterfeiting and various other techniques that jeopardize their intellectual property is essential to doing this.

Ensuring a welcoming environment for foreign investment.

From the time of our founding through today, foreign investment has made an important contribution to American economic growth and job creation. The strength of the foreign investment we attract is testimony to the strength of our economy. And investments by foreign-based companies in the U.S. employ a great many Americans: Currently, foreign direct investment in the United States supports roughly 5.5 million American jobs -- in highly unionized and largely non unionized states alike. About 4.6 percent of all American private sector workers are employed by foreign-based multinational companies that invest here; two million of these are in manufacturing jobs. Foreign investments account for nearly 15 percent of the research and development in the United States and 18.5 percent of our goods exports.

We must and will firmly enforce American laws that require the careful review of investments that could have adverse national security implications. But the vast majority of foreign investment does not come under that heading. And through visits by U.S. officials abroad and the work of our embassies and missions we seek to demonstrate that we -- along with governors and mayors throughout the country -- welcome that investment. The State Department, utilizing our embassies abroad, helps foreign investors better understand American laws and regulations. We also emphasize the great opportunities foreign investors have to succeed in our country's very open business environment, highlight the security of investments here, and communicate the benefits of our first-class workforce.

Fairness and transparency in international business practices.

In an effort to achieve a truly level playing field for American businesses overseas and in so doing to sustain and increase the jobs these companies support at home, the State Department and others in the Administration are working to build an effective international anti-corruption regime. We aim to galvanize the world's leading economies to support a clean business environment. Both bilaterally and through multilateral fora, we are encouraging other countries to step up and enforce strong anticorruption measures. We have also strengthened our enforcement actions under the U.S. Foreign Corrupt Practices Act; this includes taking measures against foreign companies for actions falling within the scope of U.S. jurisdiction.

In addition, we have pressed for international commitment to a robust peer review of implementation of the UN Convention Against Corruption. With our G-20 partners, we have formed a G-20 Anticorruption Working Group, which will make comprehensive recommendations on international efforts to combat corruption. We have called for enactment and enforcement of transnational anti-bribery legislation among the world's leading economies, in concert with the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Forging new partnerships.

The international economic geography has changed dramatically over the last decade. New economic powers have become important players in global finance, trade, investment and technological innovation. A key part of our jobs agenda is working with them to expand exports, encourage more investment in the U.S., and strengthen cooperation to promote growth, balance and stability in the global economy. Increased engagement in such forums as the G-20 and in bilateral arrangements such as the Strategic and Economic Dialogue with China, the U.S.-India Strategic Dialogue, the U.S.-Russian Bilateral Presidential Commission, and similar dialogues with Brazil, South Africa and other nations will be important instruments to establish a more solid framework for our bilateral and multilateral economic relationships.

In many of these dialogues, parallel business-to-business commissions meet to strengthen private sector commercial collaboration. These forums also provide vehicles for encouraging the newly rising economic powers to assume responsibilities for the international economic system, and international norms and rules, consistent with their commercial and financial strength and their shared interest in the openness and stability of the international economy. Progress in such areas will significantly improve prospects for American firms and job growth.

Learning from other nations.

As in so many other nations these days, many Americans are unemployed and large numbers have been so for a long time. Several nations are currently struggling with average unemployment of even greater duration than ours -- and some of them have drawn on past experience to craft new policies to address these problems.

Our embassies abroad carefully track the economic problems and policies of other nations. And we work closely with experts in the Organization for Economic Cooperation and Development (OECD) to share experiences. Working with the Department of Labor -- and using our international outreach -- we in the State Department can inform the U.S. economic debate by distilling the practices and programs of other nations to reduce their levels of unemployment, particularly long-term unemployment, and by convening experts from other nations to identify policies that could be applied here.

We will continue to bolster American efforts and policies to support jobs and prosperity at home. The State Department and the entire Obama Administration are dedicated to promoting, protecting, and enhancing American prosperity in this rapidly changing world.