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EXPORT-IMPORT
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Morning Session
Omni Shoreham Hotel |
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TRANSCRIPT OF EX-IM ANNUAL CONFERENCE MAY 3, 2002 |
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[ TRANSCRIPT PREPARED FROM A TAPE RECORDING.] |
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P R O C E E D I N G S MR. : Ladies and gentlemen, please welcome Dan Renberg, Member of the Board of Directors of the Export Bank of the United States. MR. RENBERG: Thank you. I--in that announce, they just refer to us as the Export Bank of the United States, which some people have suggested we truly are. But we are still the Export Import Bank, no legislation was changed yesterday. Before I introduce our first speaker, I wanted to just make sure that everyone in the audience was aware that yesterday there was a little confusion. You might have heard about Congressman J.C. Watts's ability to appear here. We got a call during the lunch that he couldn't come, but it was for an incredibly great reason. The House was taking up passage of the Conference Report on the Farm Bill, which is every five or six years, this is even more critical to America than our little bill. This handles all the agriculture programs for the rest of the--almost the rest of the decade. And Congressman Watts comes from Oklahoma and, as you know, Oklahoma is an impressively rural state and there was no way he could miss that important vote. We're thrilled today to have one of Congressman Watts's colleagues with us. Congressman Jennifer Dunn truly needs no introduction to anyone who has been following international trade over the past nine years since she came to Congress. Congresswoman Dunn is from Washington state, the eighth district, the area around Seattle. There's one mom-and-pop shop that uses us occasionally from that area that makes some airplanes. But Congresswoman Dunn is aware of how much else, EIM bank has been doing in the State of Washington. Congresswoman Dunn knows that one out of three jobs in her state depend on exports. She knows that one-third of the state's commodities are destined for international markets. So it is not a surprise to anyone who has followed her career that she gravitates towards trade issues. She is the fifth woman in history to serve on the Ways and Means Committee which has primary trade jurisdiction in the House of Representatives. She's also a noted expert on tax issues, because she serves on that committee, including an issue probably of some interest to all of you which is the possibilities of overhauling the tax code and providing tax relief to America's families. And maybe we'll hear from her a little bit about that, as well.
She has been a staunch advocate of opening markets abroad, not just with NAFTA, but with other opportunities, as well, as she's actually participated in trade missions to Asia and Africa to open up markets, not just for exporters from Washington State, but, as you know, Congress people represent all of us, so she's been a tireless advocate for trying to help you, the exporters, in our audience. REPRESENTATIVE DUNN: Good morning, everybody. I am delighted to be with you here today. It's a quiet day on the Hill and I'm so sorry about J.C. Watts not being able to come and visit with you yesterday. It wasn't by his choice, but when we have votes on the floor, some people think that's why we've been sent to represent them in Washington, D.C., so he really had very little choice on his activities. The same thing has happened to me and I'm sure you've been in groups where members of Congress have not been able to show up even though they very much wanted to. I want to thank your Vice Chairman, Eduardo Aguirre, for having me here today. And also, I want to thank the Ex-Im Bank's Board of Directors for inviting me to speak to you. It's such a pleasure to be here to discuss our trade agenda and, particularly, during a week when we actually did complete passage of the Ex-Im Bank legislation on the floor of the House. And you will, by now, know that since it passed in the Senate about a month ago, we're at a point where we go into the Conference Committee, and very likely, possibly even before the Memorial Day break, we'll be able to have the predictability of those dollars set aside for such an important thing. A few days ago, the House of Representative passed legislation to reauthorize the Ex-Im Bank. Although the debate was very contentious at times, still, it had the full support of the House of Representatives. In fact, we passed that legislation on a voice vote, very unusual. And I think that that reflects a belief that the Ex-Im Bank plays a very important role in helping United States companies remain competitive overseas. For most American companies, access to foreign markets is no longer an optional business practice, but a necessity for our companies to survive. To compete and succeed in the global market, the United States must provide funding and access to financing for companies that are trying to compete with others and, while at the same time reducing barriers to trade. Simply stated, access to foreign markets without access to financial resources will not help United States companies expand overseas. While all businesses benefit from Ex-Im's financing, I want to highlight the very important of the Ex-Im Bank on behalf of a little company in my state, one that Dan mentioned, the Boeing Company. We still claim the Boeing Company, by the way, for the State of Washington, even though it has moved its corporate headquarters to Chicago, as you all know. But it wasn't a complete disaster because the company left 55 percent of it's operations--the whole commercial line--in Seattle, so I find myself continuing to represent the district in the United States with the largest number of Boeing employees. We have 25,000 Boeing employees who live in my district. Over the past five years, Boeing and its workers have benefitted from $19.5 billion of loans from the Ex-Im Bank for the sale of aircraft overseas. Of the planes sold overseas, over 20 percent are financed by the Ex-Im Bank. The financing has been critical in keeping Puget Sound businesses competitive overseas, while creating jobs needed to stimulate our economic recovery. As some of you know the Boeing Corporation has laid off nearly 30,000 employees. And it's a very difficult time for this company. I think they would claim that they would not have survived if it had not been for the Ex-Im Bank. Reducing trade barriers has never been more critical for the recovery of our Puget Sound economy. In my state, where, as Dan said, one out of three jobs is related to international trade. If we fail to expand overseas, if we fail to develop exports and to develop new markets where we can sell them for Boeing jets and for Microsoft software--another one of the companies that I represent in Washington State--then it's very simple, we simply lose jobs. My colleagues and I who are free trade supporters are focusing on the need to reassert American leadership in international trade. You might want to give some thought to where we stood on January 2001. During the last 10 years, the United States had signed only two trade agreements. The European Union, as a contrast, had signed 28 trade agreements with other countries. The Seattle WTO ministerial meetings did not lead to a new round of trade liberalizations. In fact, although we--I claim to be from the most beautiful city in the world, Seattle, and hated seeing that city defiled because of that WTO administration, it truly was a fiasco. It wasn't just the tempestuous environment you saw in that city during those terrible days, but it was the difficulty in going into a ministerial without an agenda set up ahead of time. And it was also, of course, as some of you who were involved know, was partly due to the green-room strategy which largely left developing nations out of putting together our agenda. And during that time, also, passage of trade promotion authority, which was called fast-track trade negotiating authority at that time, was illusive to us because of a lack of consensus in the Congress. And a President who was burdened with some alliances that were very important in keeping United States from getting TPA, environmental and labor constituencies, for example. Now, however, we're in a very fresh environment. With President Bush and Ambassador Bob Zellik's leadership, we've taken steps to reverse this trend. So let me sum up what's happened for you since January 1, 2001. Congress and the Bush Administration have passed the United States Vietnam Bilateral Trade Agreement. The United States Jordan Free Trade Agreement has been passed by the Congress and signed with, by the way, some very interesting new language regarding labor and the environment that I think will become a standard for many of our agreements in the future. We hope to complete both the Singapore and the Chilean Free Trade Agreement. I as at a dinner the other night with Lee Kwan Yu, he says they are nearing the final point of being prepared to qualify for our free trade agreement. We begin consideration of other agreements with partners, such as Australia and, separate from them, New Zealand, very important countries for the United States to engage with. Furthermore, the House of Representatives has passed legislation to renew the Andean Trade Preference Act and the Trade Adjustment Assistance Program. Those are still being debated in the Senate. You may know that we hope to make progress here because much of that is related to TPA which is being considered in the Senate. We're continuing our efforts on the free trade are of the America's FTAA. As you know, Latin America is emerging as the fastest-growing United States regional trade partner. Between 1999 and 2000, total United States exports and imports with Latin America grew by 219 percent. An increase much greater than with other regions in the world. Washington State, alone, exported $1.5 billion worth of products to Latin American countries. Also the Do Ha Ministerial meetings were successful, not only in the smooth inclusion of China and Taiwan as members of the WTO but, also, in the agreement to complete a new round of trade liberalization by the year 2005. Most importantly, we passed trade promotion authority to grant President Bush authority to negotiate free-trade agreements. We are closer today than we have been in the last eight years to passing TPA. You will hear from some members of Congress disagreement with the idea of the President being able to negotiate free-trade agreements without the amendment by 535 members of Congress. I will tell you I do not believe it is usurping constitutional authority away from the Congress at all because we have very carefully written in Trade Promotion Authority the need for consultation all the way along the line. And at the end of the process, the Congress gets an up or down vote. If consultation hasn't been adequate, then they will vote it down. So they are very--Congress is very well protected as we look at Trade Promotion Authority. In the Senate, the progress this week continues to be very slow. The Trade Promotion Authority is based on the Andean Preference Trade Act as the base bill. There is great discussion over issues like coverage for health care insurance in our Trade Adjustment Authority, which is our assistance to those who have lost jobs as a result of losing trade. I don't believe I'm an optimist in all of this. I think I'm quite realistic when I say despite the slow movement on TPA, I believe we will see a Trade Promotion Authority this year. And, certainly, all of United States who have an interest in free trade and, particularly in opening up markets for those companies in the United States will be very helpful in supporting this publicly and behind the scenes with our friends in the Senate.
Let me give you a few examples of why TPA is important to the United States: For our high-tech firms, TPA means strengthening intellectual property standards. The software industry loses $12 billion annually due to counterfeiting and piracy in nations around the world. Reducing piracy in China, alone, could generate $1 billion of revenue for the Northwest part of this country. Many nations have enacted laws dealing with intellectual property. And the problem is not that. The problem is with the enforcement of these laws. And, certainly, TPA will help United States to negotiate at least the beginning steps of that sort of legislation and enforcement. Take a look at women entrepreneurs. Many women around this country are leaving the corporate structure because it's not flexible enough. And they have the problems of balancing their lives with the lives of their families. And they are setting up business--some of them in second bedrooms in their homes. But all of them with great idealism and hope. And, also, we find with women entrepreneurs, great interest in being--in having access to foreign markets. TPA means succeeding in a global economy for women entrepreneurs. The entrepreneurial spirit knows no race or gender. In the United States, women are starting businesses at twice the rate of men. In Brazil, Mexico, Argentina--20 to 30 percent of women business owners are involved in international trade. So it's not just limited to the United States. In several sub-Saharan countries where I have visited, women actually comprise a majority of total business ownership.
No other factor contributes more mightily to the advancement of women around the world than the grasping of economic power and the educational opportunities that come with it.
Some people perceive that further trade liberalization is a threat to their jobs, to their communities, and to their values. I agree that there are legitimate concerns about labor, the environment, about gender equity, and about human rights. [Applause.] MR. : Ladies and gentlemen, please welcome Joe Grand Maison, Member of the Board of Directors of the Export-Import Bank of the United States.
MR. GRAND MAISON: Thank you, thank you very much, Congresswoman. I wanted to point out that as a minority member of the Board of Directors, whenever I've seen Congresswoman Jennifer Dunn on "Meet the Press," or whatever, I've thought to myself, well, you know, if she could just be a little less thoughtful, a little less articulate, she is an extraordinary representative of her party and its philosophy and I'm very please on behalf of everyone to thank you very much for joining United States this morning for a great statement relative to the importance of international trade. Our very first Polish transaction, cotton sales, was done in 1936, just two years after Ex-Im was charted. Since that first transaction, Ex-Im Bank has helped to finance more than $1 billion of U.S. exports to Poland. Today, Poland is preparing, as you know, to enter the E.U.--the European Union, and is focusing on building infrastructure and modernizing key economic sectors, such as transportation and information technology.
Notwithstanding the tough competition from our West European competitors , we're looking--Ex-Im is looking--to do more in this emerging market. Deputy Prime Minister Belka is an international economist who has a deep understanding of the importance of international trade. He has served as Deputy Prime Minister of Finance in the Cabinet of Polish Prime Minister Leszek Miller, since October 2001. He also held the same position in '97 in the government of the previous Prime Minister. From 1997 until 2001, he served as an economic advisor to the President. Prior to his career in government, Professor Belka had a long and distinguished career in academia. He holds a Ph.D. in economics from the University of Wudka and has also studied at Columbia and the University of Chicago, the London School of Economics. For many years he taught at the University of Wudka and at the Institute of Economics in Polish Academy of Sciences. He served as Director at the Institute of Economics from '93 to '97. He's also the author of numerous books and articles and is an expert on anti-inflation policy in developed countries, macroeconomic policy and the socioeconomic doctrine of Milton Friedman.
His range in depth and experience in international economics and trade issues is truly impressive. MINISTER BELKA: Ladies and gentlemen, good morning. Thank you for inviting me to this meeting. Thank you for having the opportunity to talk to such a distinguished audience. Also, thank you for this extraordinary introduction of mine. If for nothing, I would be wiling to come over to America to hear such things, which I never hear in Poland. [Laughter.] You know, ministers of finance are never sort of bathing in popularity and--and sympathy of the rest of the government and the society. As a minister of finance, I'd like to congratulate you of having your budget adopted, as I was told yesterday. Well, this is--this means for every organization, we survive the next year, as I always try to survive with the early budgets for the country.
I'd like to tell you basically three things about Poland. First, let me make a, well, a few remarks on the character of transition. Now, we are in the second decade of transition and it's time to reflect on the character of this process. then I will dwell briefly on the current situation of the Polish economy, important for those of you who do business in the region. And then I'll say something about the general strategy of Poland concerning the accession to the European Union. But, also to other international organizations that Poland either has become member of or aspires to become. This is a bumpy road in which the people have to adjust to constant change. As a matter of fact, if there is something constant in a country like Poland or other countries of the region, it's change. And a change at a very intense pace. Well, but after 12 years, because we think the transition officially started in 1989--it probably started a little bit earlier--but in this last 12, 13 years, we proved that the process could be successful. Why so? Why did it prove to be a success?
I think there are three, four main reasons, main sources of this relative success: Number two, there was a lot of pragmatism. Not only determination and resolution of what to do but, also, pragmatism. Poland avoided pitfalls of looking for shortcuts. Well, it may be a self--it may be a contradiction here, because on the one had we had to cram so much change into 15 years, but at the same time, we had to try to avoid shortcuts. We had to build up institutions, which is, by definition, time consuming, but we had to do it. For example, we avoided such mistakes as the Czechs did with massive--mass privatization--the famous kupenofka [ph], which brought about a lot of corporate mess--corporate governance mess and really complicated the positive evolution of the Czech economy. Now they are overcoming it successfully, but certainly it was--it was a barrier to growth for sometime. So, on the one hand we preached liberalists, we preached market mechanism. But at the same time we didn't lose--we built up institutions of the market economy not looking for miraculous ways, miraculous quick-fix solutions. Reason number three or source number three of this relative success was a broad political consensus. We had, like, eight governments in this last 12 and probably the same number of ministers of finance but, yes, we had a lot--well, it's a seasonal job anyway so--[Laughter.] But we have--we had a lot of continuity in economic policy. And this broad political consensus--a lot of continuity in the economic policy but, also, very solid political stability. Why so? Why did it happen in a new democracy. I think the reason was a very early strategic pro-Western orientation that Poland took from the very beginning of transition. Just to remind you, as early as 1991, Poland signed association agreement with the European Union. For United States, it was the first step to the accession. For our European partners, it was probably a loser concept, probably, well, with the benefit of hind-sight, we may say, they must have looked upon Poland with some disbelief that we were introducing ourselves to them as future member of the European Union just two years after beginning of transition. But this association agreement provided for a discipline in the reform process; for policy-related know-how that we got from Europe. And, well, just take the following think, every piece of legislation enacted after 1991 had to be confronted and conform to the standards of Western Europe. So we lost our sovereignty to make mistakes in the reform process, if I may say so.
And the first source of success was a huge support--a huge and uniform support from the international community. From the very beginning of the process, we enjoyed support from--from our neighbors but, also, from America--from American government, from American companies, from American institutions. And, yes, also from American people. Americans and, also, your institution, was in the first line of those who brought faith in what we were doing and this was most important. In 1999, Poland became a member of NATO with the full support of the United States. Since then, we began as an agent for the rest of the region. Poland consistently supports the aspirations of other Central European countries--Central and East European countries to become members of NATO. We hope that on the upcoming summit of NATO in Prague, in November this year, new countries will be invited to join NATO, thus extending the area of stability--the area of democracy in our part of the--of the world. Most important and most complex task that lies ahead is, of course, the accession to the European Union. The negotiations are underway. They are set to be concluded by the end of this year. And we hope that by the end of next year, so from the--from the early '90s--2004 we'll become full members--full member of the European Union. Now a few remarks on the current situation of the Polish economy. Well, if you look back at the whole decade of transition, Poland was the fastest growing economy in the region, with over 5 percent growth on average. In the last one year and a-half, Poland go through a slow-down, the economy is growing just at the rate of 1, 1.5 percent, which of course for a catching-up country like Poland is--is a quasi recession and we are all unhappy about this situation. Partially, it is due to the other slowdown in the European economy, which we very much depend on. Partially, it is the product of, let's say redefinition of our internal--of our internal economic aims--economic goals to become a member of the European Union and then, after some delay, of the European Monetary Union, you have to fulfill certain criteria. These are both fiscal and monetary criteria. Poland was usually a high-inflation country, a laggard on the monetary criteria. And a few years ago, we decided to change the priories, so to say, and deal more seriously with our inflationary--with the inflation and interest rates--part of the so-called master criteria. And, in a sense, we are paying the price of getting inflation down to about 3 percent by slowing the business activity.
Now we are on the way to recovery. The government that I represent, that took over six months ago has adopted a comprehensive economic program, based on the following three pillars: Pillar number 2, is regulatory reform, aiming at improving business climate. Just recently we have produced a cluster of about 30 (inaudible) improving or diminishing bureaucracy, improving tax code and labor code--liberalizing labor code--all to you can say, to use the slowdown for speeding up reforms. Pillar number 3, is development of infrastructure. Poland has to invest a lot in roads, in railways, in telecommunication. Not everything is done by the private sector. Most or it, yes, it's done by the private sector, but not everything. And at least in Central Europe, private capital is not enough to build up sufficient road network. Those of you who are more familiar with the situation in Central European countries know the unlucky experience of the Hungarians to finance the highway from Vienna to Budapest solely from the private sources. And we have decided to involve the institutions of the state, including guarantees to speed up the process of infrastructure--of road infrastructure development. And here, any possible participation of Ex-Im Bank would be more than welcome. We plan that the Polish economy will come back to a 5 percent growth path by the year 2004, which is now only about 18 months away. With inflation staying, remaining at the level of 3 percent and all this will make it possible for United States not only to smoothly join the European Union, smoothly absorb the structural funds--the financial assistance that the European Union provides for new members but, also, to enter the European Monetary Union as early as possible. Possibly, in the years 2006 or 2007. Joining the European Monetary Union would mean introducing the joint European currency, the Euro, into Poland. The big benefits coming with it to Poland is, of course, the low level of interest rates and increased credibility as a location for indirect investment.
To conclude my remarks, I would like to sort of summarize what I have said before and look at this economic process from a more general political or geopolitical perspective. We are coming back to the West but, also, we are coming back to the West trying not to lose anything from the experience that we've gained in the last 50 or so years. Our aim is to become members of the European Union but, also, to become a meaningful, powerful player in this group--in the European Union. Politically, it's easy, well, it is possible, it's visible. Our voting weight will be big enough. We'll be the sixth most important country in the European Union of Spain, close to the level of Italy. But, of course, we have a long way to go in terms of economic weight. If we look at the GDP volume, Poland is now ranked only as the tenth biggest economy in the European Union. But soon we'll become the seventh European--the seventh biggest European economy. Why so? Because of the inevitable appreciation of this (inaudible), if you compare the purchasing power of parity figures, we are number six, number seven economy in the European Union. In fact, we are one of the 10 countries aspiring members of the European Union, but we account for 54 percent in terms of the size of the economy. This is probably one of the explanations, one of the explanations, why--why the negotiations with Poland are most difficult, both for us but, also, for the European Union. Sometimes I add that we have an impression that we are the only country that negotiates. But our geopolitical strategy is to become a member of the European Union but, also, to become a gravitating point of gravity of the region, of the countries around United States. That is why we are so very much interested in countries like the Baltic states--Lithuania, Estonia, Latvia, Slovakia and other countries to the south, to become members of the--of NATO--to become members of the European Union later, because we think this is in the interest, not only of Poland but, also, of Europe--also of the world, to extend the sphere of stability of democracy. And to be able to export our good experience to the East. And this is the next point in this strategy. We want to remain a bridge between Western Europe and Eastern Europe. We work hard to improve our relations with Russia. We think that becoming a NATO member, becoming an EU member, it's also--it's almost automatic, you improve your relations with Russia. And this is--you become normal partners and the Russians are more and more realizing that Poland is not only a transit country for them but, also, a meaningful partner, a place to invest and a place from where capital can be invested. We are very much interested and we support all the efforts of the Russian government to stabilize the country. Now, on Polish/American relations. We are proud to become members of NATO. We are proud to become one of the best allies of America in Europe. This is our--this is not just an incident. This is our strategy. I think that it's in the best interest of Poland to bring to the European community our best relations with America. Sometimes we hear that, in the West, well--Poland is like a, quote, "Trojan Horse," unquote, of America in the European Union. I have not invented this. Neither did Homer. It's--it's some of the West European members of the parliament that use this term, when it went to ratification of the Polish membership in NATO. I think it's totally wrong. I think Polish strength is stimulated when it's backed by very good relations with America--with the United States. And I think that this is one of the assets that our country can bring to the European community; that we have both a unique expertise in our relations with the Eastern--with our Eastern neighbors. And our privileged, very good relations with America. So, we have a plan here. It's not only about economics. It's not only about economic policy. But it's about the future of our country and the future of Europe. And if Ex-Im Bank can help in it--and we have just been talking about new proposals to involve Ex-Im Bank in Polish economy, then, please, be aware, you are taking part in a much bigger game than you think. Thank you. MR. : Ladies and Gentlemen, please welcome the Vice President of the Export-Import Bank of the United States, Eduardo Aguirre.
MR. AGUIRRE: Thank you, Deputy Prime Minister for your very insightful comments. I think we both recognize the very strong bonds of friendship and mutual security and business that exists between our two countries and the Export-Import Bank looks forward to partner with the exporters wand the rest of the U.S. government to continue to work with Poland in the years ahead. Now, just a few housekeeping issues for the rest of the morning. The breakout sessions are going to begin promptly at 10:30, which is about a half an hour from now and are going to conclude no later than 11:45.
Now, I need your help on something. Lunch is going to begin today at 12:00 o'clock sharp. We expect Secretary Evans here right at 12:00, traffic in D.C. permitting, et cetera. And we're going to be on somewhat of a tight schedule. I know you want to hear his remarks, which will begin before lunch. So being here and seated by noon will be somewhat important to the logistics.
[Applause.] |
Export-Import Bank of the United States
Revised: May 7, 2002
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