FOR IMMEDIATE RELEASE
Monday, April 5, 2004

Remarks to Manufacturing Tomorrow
in Minneapolis, Minnesota
As Prepared for delivery by U.S. Commerce Secretary Donald L. Evans

Thank you for that kind introduction, Mark.

President Bush and this Administration understand that American manufacturers are one of the key pillars in our economy. You’re all a vital source of innovation, productivity, and the most sophisticated products in the world. I thank you for all that you’re doing to keep our economy strong. I’m honored to be serving our country at a defining moment in the history of our world.

These times demand steady, principled, and determined leadership. The President is providing that leadership. The most important thing for each of you to know about my best friend is that he’s someone you can trust 100 percent of the time.

Considering what we’ve been through over the past four years, the strength of our economy today is inspiring. The problems started in 2000. Our equity markets fell through the floor, destroying capital for investment and expansion. A deepening recession was choking-off job creation and demand, as President Bush took office.

Then the enemy hit our homeland on September 11. You know what happened. People stayed home. It hurt our psyche as individuals and as a country. It hit our bottom line.

Then we learned that some of our corporate leaders didn’t tell the truth. They betrayed the trust of their shareholders--they shook confidence in our free market system.

And then we confronted terror in Iraq. These events depressed economic activity. They created anxiety. And they sapped momentum.
Action was required. The President took action and we’re seeing the conditions for growth pay off for American workers.

On Friday we saw the strongest job creation numbers in four years. They showed that the final piece of our economic recovery appears to be moving into place. American companies, entrepreneurs, and small businesses have already created 513,000 jobs—just since January this year. And manufacturing employment finally ended a three-year slide by holding steady.

I know how important every one of those jobs is to the family that depends on it. I spent 26 years in the private sector—most of it leading a business. We thought of our employees as part of our family. We went through hard times in the oil and gas business.

Nothing in my professional life has ever been as hard or as painful as having to tell one of our people that we no longer had a job for them. Nothing was ever as satisfying as changing a person’s life by offering them a job.

I knew the hopes and dreams that our people had for their families. I watched a lot of them come true for people working at our company, Tom Brown. Unfortunately, I also learned the pain and the human costs that an economic downturn can cause in a business.

I know that all of you who’ve had to face those difficult decisions feel the same way. You would like nothing more than to keep all of your employees working. We’re committed to creating the conditions that will let you do just that. We know that things have been tough in the manufacturing sector.

For that reason, the President asked me to take a hard look at the state of manufacturing. We sent our team across the country. We came to Minneapolis and we appreciate everyone who took part in the roundtable.

We sat down with manufacturers to find out what was holding back job creation and making it more difficult for American companies to succeed domestically and internationally. You told us about high health care costs. You told us about high energy prices.

Jim Noyes knows. He runs Minnesota Dehydrated Vegetables in Fosston. Three years ago, when the price of natural gas hit $10, Jim had to shut down production for three and a half months and lay-off two thirds of his workers.

You told us about junk lawsuits. Medtronic told us that that the litigation issue is a huge problem for their own business and their physician clients.You told us that regulatory compliance was an enormous burden in expense and lost time. You told us that business planning was difficult because the President’s tax relief isn’t permanent. You told us that the international playing field isn’t level.

We documented your concerns in our report, Manufacturing in America, along with over 50 recommendations. President Bush has already offered a six-point plan to address many of these issues. And we’re calling on Congress to pass all the elements to create the conditions for job growth and success for American companies.

This afternoon, my focus is trade. Support for free trade goes hand-in-hand with vigorous enforcement. Let me assure you, this Administration is holding our trading partners to the rules of the game.

Americans are the most dynamic, most innovative, and most productive, workers in the world. On a level playing field, they can beat anyone. So, this Administration is taking aggressive action to level the field.

In China, we knocked down the barriers holding back Liberty Mutual from the license it needed to sell insurance.We’ve acted on 152 new dumping and subsidy investigations. They led to 61 enforcement orders on imports that broke the rules. In the first case of its kind involving China, Ambassador Zoellick is confronting Beijing over its discriminatory export rebate scheme, in the WTO.

At Commerce, three new offices target unfair trade practices and enforce our trade agreements. Our Unfair Trade Practices Task Force is already tracking the 30 largest categories of Chinese imports.

We’re strengthening Intellectual Property Rights enforcement with a new Investigations Office to drill down on the countries tolerating the theft of American products. Chinese manufacturers are copying Toro’s designs and producing identical knock-offs that differ only by adding a “K” before the word Toro.

We are aggressively confronting any country that tilts the playing field against American workers. Whether that country is China or India or any other trading partner, we are cracking down on unfair trade practices not only after they’ve happened but as they happen.

Free trade requires fair rules and I’ll be taking that message back to China this summer.

American economic engagement has been the most powerful source of economic progress in modern times. The free flow of goods and services brings prosperity at home and builds a world that is more free, more prosperous and more peaceful. The internationalism of Theodore and Franklin Roosevelt moved us toward active engagement with the rest of the world. It laid the foundation for American prosperity and built the global economy. This bipartisan tradition has not only delivered the world’s highest living standards for Americans.

It has also uplifted countless millions around the globe. That tradition of engagement with the world has been under attack lately and the critics are dead wrong.

My message is simple: The economic isolationists and their message of defeatism must be rejected.

Free and fair trade is the only way forward for America. But some are advocating retreat. We must be wary of that danger. Turning away from the world would bring economic hardship for the United States and a descent into depression for the world economy. We must not only remain a country that works with the world—we must lead. Anything less would be a timid betrayal of American leadership.

It is a double dose of defeatism that those who criticize the President for waging the war against terrorism too aggressively are calling for an American retreat from the world on economic matters.

Franklin Roosevelt had a similar problem. A rising tide of isolationism threatened to choke-off America’s participation in the global economy.

A large and influential group of Americans—men and women who should have known better—were openly embracing a doctrine of appeasement.

They wanted America to retreat inside our borders. We would have stood apart—a passive hermit nation as fellow democracies fell victim to gathering dangers.

In his Four Freedoms speech, President Roosevelt forcefully rejected the false appeals of those who claimed freedom could secure peace by negotiating with evil and that America could build prosperity behind a new wall of isolation. He said, and I quote: “The United States. . . has at all times maintained opposition --clear, definite opposition—to any attempt to lock us in behind an ancient Chinese wall while the procession of civilization went past. Today, thinking of our children and of their children, we oppose enforced isolation for ourselves or for any other part of the Americas. ”

Unfortunately, prominent Americans who also should know better are renouncing the legacy of Roosevelt’s leadership by embracing economic isolationism.

Like Roosevelt, President Bush also recognizes that terrorism cannot be appeased. He understands that economic engagement and the forward strategy of freedom are linked. They are necessary elements for the triumph of liberty. We won’t have economic security without national security.

He knows that the men and women working around the world in the enterprises of democratic capitalism play a powerful role in the conflict of ideas between democracy and terror.

Global commerce leads to communication. Communication leads to understanding. Understanding leads to mutual respect and partnership. Partners become friends and they realize that we all have the same common goals and aspirations. We want to feed our families. We want a roof over our heads. And we want a good education for our children.

Engagement opens the lines of communication, expands understanding, and builds relationships that bridge divisions between cultures and countries.

Economic engagement not only expands prosperity, it makes our world more cohesive and peaceful.

Americans created the highest standard of living by working with the world. Consider the progress since 1950. Today, our economy is five times larger and exports have expanded by a factor of 20.

We’re more involved with the world than we have ever been and our standard of living has never been higher.

As America reached out to the world, . . . not only did we do better, . . . but our trading partners did better too.

But here’s the bottom line for all of you: Trade breeds more growth for American markets and, ultimately, more jobs right here in the U.S.A.

Alan Greenspan calls global economic engagement one of “the most underestimated aspects of U.S. growth.” Roughly one out of every five, factory jobs depends on trade.

The wages of those working in factories that export are 18 percent higher than those who don’t. American farmers plant one out of every three acres for export. Free flows of goods and services also benefit Americans in other ways.

Foreign companies employ 6.4 million Americans. More than 35,000 Americans work for Toyota. Nestle employs 43,000 Americans. And these foreign firms have a big multiplier effect in their communities. For example, the 4,700 American workers at BMW’s South Carolina plant generate more than 12,000 additional local jobs to support the plant. Right here in Minnesota, 5,800 people work for Thompson Corporation.

People around the world are buying your products. Minnesota exports to 189 different countries. You sent exports worth $3 billion to Canada alone. More than 6,600 companies exported from Minnesota. The vast majority were small companies with less than 500 employees.

Like Tim Harold from Harold Precision Metals, John Decramer from BH Electronics, and Jack Greenshield from Rock-Tenn. The U.S. attracts more foreign investment than any country in the world. In 2003, $86.6 billion flowed into the United States.

Here in Minnesota, foreign companies employ over 108,000 people. That’s up 21 percent over the last five years. And more than a third are manufacturing jobs.

History confirms Chairman Greenspan’s insight that American economic success is tied to working with the world. We’ve heard that America couldn’t compete before.

In 1980, academics were trumpeting the “Japanese Miracle” and advising us to copy Japan by creating a vast new economic bureaucracy to devise a centrally-planned, “industrial policy” for the U.S.

During the early 1990s, some worried that the emergence of the new European Union would create a “Fortress Europe” that would roll over the United States.

During the 1990s, the growth of Asian semiconductor makers fueled fears that American companies could no longer compete.

In each case, . . . American ingenuity, creativity and resourcefulness exposed the truth. The arguments advanced by the defeatists were fallacies.

Here’s the point. Retreat would cost American jobs. Retreat would deny new markets for U.S. products. Erecting new walls to block the free flow of goods and services always cause more harm than help to the country raising barriers.

America is not a fortress, it’s a bridge—and the traffic on that bridge goes two ways: Exchanging jobs, trade, profits, and prosperity. We’re now hearing the misguided theory that America could boost manufacturing by raising a barrier to keep out foreign products. The threats to withdraw from trading agreements place at risk not only the jobs of the 6.4 million people employed by foreign companies in America, but also the 10 million Americans whose jobs depend on exports.

Let’s remember the lessons of the 1920s and 1930s. Economists may differ on whether isolationism actually caused or only worsened and extended the Great Depression, but there’s no doubt that economic isolationism made things a lot worse for a lot of Americans and for people around the world.

When American trade barriers went up, other countries followed suit and economic walls started going up around the world. Country after country retaliated. They raised tariffs and world equity markets sank lower and lower. Credit markets contracted. 10,000 banks failed. A third of the U.S. economy disappeared.

World trade fell by two thirds. Demand died. Goods started piling up in countries around the world. Growth stagnated. And companies around the world started laying-off workers. Our unemployment rate hit 25 percent.

As the global decline took hold, the U.S. government raised taxes. Higher taxes further harmed our economy. We learned that throwing isolationist punches only results in knocking yourself out.

History shows that economic isolationism starts as populist regression and ends as unpopular Depression.

As long ago as 1856, the Democratic Party was clearly committed to an economic vision that embraced confidence in America and hope for the world. The Democratic Platform that year stated: “the time has come for the people of the United States to declare themselves in favor of free seas, and progressive free trade throughout the world.” The Democrats were correct about free trade in 1856.

On this issue, they were standing on the right side of history. The economic isolationists need to dust off that old platform.

History proves that America moves forward by engaging the world, by exporting not just our goods and services but by exporting our liberating principles of freedom, including free and fair trade.

Those who exercise the freedom to sell American products and services from anywhere in the world aren’t “Benedict Arnold” traitors.

They are Benjamin Franklin free traders and innovators who recognize that success comes from making the pie bigger not from slicing it ever thinner. Economic isolationists preach a bogus salvation. FDR had a term for claims like these…“pious frauds.”

Economic isolationists may claim to be waving the American flag but they’re really raising a surrender flag. As history has shown, time and again, those like the economic isolationists who underestimate America’s ability to compete and win, are standing on the wrong side of history.

President Bush and this Administration are charting a different course. We trust you. We trust freedom. We trust America. And we trust in the hopes and aspirations of millions of people around the world.

America stood tall in beating back Communism. We are standing tall with our allies in beating back terrorism. On the economic front, America must stand tall to beat back isolationism.

These days of danger and uncertainty demand steady, principled American leadership. In this way, we’ll build a more peaceful, more prosperous, and more secure world. We’ll build a place that all of our children and grandchildren would want to call home.