REMARKS AS PREPARED FOR DELIVERY SANDY K. BARUAH ASSISTANT SECRETARY OF COMMERCE FOR ECONOMIC DEVELOPMENT - EDA REGIONAL ECONOMIC DEVELOPMENT CONFERENCE - NEW ORLEANS, LOUISIANA

THURSDAY, APRIL 17, 2008

AS PREPARED FOR DELIVERY

Introduction by Kurt Weigle, President & CEO of the Downtown Development District

OPENING

Thank you, Kurt, for that kind introduction. I appreciate the opportunity to be here today and I thank you for your attendance and applaud your commitment to advancing the art and science of economic development.

In addition to serving as a forum for best practices in 21st century economic development, this symposium is also a great venue to re-connect with the EDA team from our Austin and Atlanta offices. EDA’s regional offices are the “front door” of the agency, and are the ones responsible for the great reputation our agency has earned over the past 40-plus years. Please join me in applauding the good work of EDA’s Austin and Atlanta offices.

I would also like to express my sincere gratitude to the great line-up of speakers and panelists who have joined us here in New Orleans, including Louisiana Secretary of Commerce Stephen Moret and former Assistant Secretary of Commerce Phillip Singerman.

I’d like to especially thank my colleague from the Commerce Department, Census Director Steve Murdock. Dr. Murdock just joined us in January and has walked into a very big job; preparing the nation for the 2010 Decennial Census, which is the largest peacetime mobilization effort in America. It is a pleasure to work with Steve and I’m delighted that he was able to join us here today.

I am also honored to share the stage with Thomas DeFrank. Not only is he one of the most celebrated journalists working today, he had a special insight and relationship with one of my political heroes, Gerald R. Ford, and I encourage all of you to buy and read – before it’s offered in paperback – “Write it When I’m Gone,” DeFrank’s account of his private conversations with President Ford that spanned his career from Congress to his death last year. Mr. DeFrank, welcome.

I’m pleased to be back in New Orleans, one of America’s great and unique cities. The challenges that face this great city – and the entire Gulf Coast – are certainly well known, and in many ways greater than what other regions face.

But the challenges here in New Orleans are – at the most basic level – similar to what other regions confront: developing a competitive edge in the 21st century, building a skilled workforce, working together as a region, ensuring that our companies are successful, and contributing to vibrant and stable communities. So it is fitting that we meet here in New Orleans.

When we consider 21st century economic development, I believe it is useful to frame our discussions by viewing our efforts through the lens of the global, interconnected environment in which we live.

LINKING REGIONS WITH THE WORLDWIDE MARKETPLACE

If you needed proof that Tom Friedman was onto something when he said the world is flat; look no further than the evolution of open-source R&D, the growing role of sovereign wealth funds, how global economics and politics are driving gas prices, or the global implications of the current stress in credit markets – all of which re-enforce Friedman’s view of our economic geography.

In our 21st century economy, our competition is not necessarily the company next door, or city next door, or even the state next door. Our competition today comes from any person in any corner of the globe with a good education, a good idea, and a good Internet connection.

The 21st century reality is that we exist in an integrated worldwide marketplace. This is true for educators, political leaders, farmers, manufacturers, and especially economic development professionals. One of the key goals of the Economic Development Administration is to enable the economic development community to understand and take advantage of the opportunities presented by the worldwide marketplace.

This is why EDA has made linking regional economic development to the worldwide marketplace a priority, in addition to our other three priorities of:

• advancing long-term, coordinated, and collaborative regional economic development approaches;

• enhancing innovation and competitiveness; and

• supporting entrepreneurship.

Economic development initiatives that only factor-in the elements and realities within the borders of our regions and our nation are likely to be of limited success in truly driving economic growth. U.S. success in the worldwide marketplace is critical to our local, regional, and national economic growth.

U.S. exports contributed 26% to our economic growth in 2007, and account for over 12% of our GDP, compared with only 5% forty years ago. Imports to the U.S. provide lower prices and more choices for American consumers.

These benefits to the American economy are more important then ever when, after years of record economic growth, the economy is now growing at a slower rate than we would like. What better time to ensure that U.S. businesses, workers, and farmers have the ability to find customers in foreign markets that will help keep factories humming and people employed?

States, the economic development community, and companies are moving to capitalize on these global opportunities.

The Port of New Orleans plays a significant role in bolstering the economic future of the Gulf Coast, contributing over 160,000 higher-skill, higher-wage jobs to the regional economy. Last month, the Port unveiled an ambitious blueprint for a $1 billion initiative to grow the Port, creating even more jobs, and strengthening the Gulf Coast’s link to the world.

Businesses in Louisiana are selling their goods and services in 189 countries. Louisiana exports in 2007 totaled $30 billion, up 65% from just 2003 – a 65% increase in just four years.

In Mississippi, exports have doubled since 2003, a remarkable accomplishment given the challenges the State has seen since 2005.

In Alabama, Governor Riley established “Export Alabama,” a State initiative to work with local governments, economic development professionals, and non-profit agencies to provide services to companies that help them access overseas markets. This initiative has also conducted trade missions to South America, Germany, Japan, Israel, South America, and China and is inviting foreign direct investment in Alabama.

In Georgia, Neotonus, a manufacturer of advanced medical devices, is proving the strength of small companies in the worldwide marketplace. In just the last seven years, its percentage of sales from exports has grown to a staggering 90%, and it is now doing business in 49 countries across the globe.

FREE TRADE

The issue of trade has gotten wrapped up in the presidential election, so there’s a lot of “noise” out there. But let’s set politics aside for a moment and focus on what matters to all of us in this room – driving economic development.

As economic developers, it is important to realize that the jobs associated with exporting industries pay better than non-export related jobs, and what’s more important to economic development than higher-skill, higher-wage jobs?

The reality is that 95% of the potential customers for American businesses live in a country not called America. The vast majority of our customers – current and potential – live outside of our borders.

American companies are taking advantage of this reality in a big way. In 2007, American companies and workers scored a record-breaking $1.6 trillion in exports, nearly 13% over the record set in 2006.

The growing strength of U.S. exports is a trend that we as economic developers must capitalize on. The more we can do to help the companies in our regions – big and small – understand, adapt, and succeed in the worldwide marketplace, the more prosperous we will be at an individual, regional, and national level.

FREE TRADE AGREEMENTS

That’s why Free Trade Agreements – FTAs – are so important to us as economic developers. When President Bush took office, we had Free Trade Agreements with just 3 countries – Israel, Canada and Mexico. Today, we have free trade agreements with 15 countries with 3 more pending Congressional approval.

FTAs help our companies, farmers, manufacturers, and workers gain access to new markets around the world; and remember, 95% of our potential customers don’t call America home.

Part of our job as economic developers is to help our local elected leaders, educational institutions, partners in workforce development, and especially the businesses in our regions understand and take advantage of these Free Trade Agreements.

COLOMBIAN FREE TRADE AGREEMENT

Currently, the Congress is considering the U.S. – Colombia Free Trade Agreement. Today, there are more than 9,000 American companies, most of them small and medium-sized, that export to Colombia. Approving the Colombia FTA will help these and scores of other companies increase their sales and add higher-skill, higher-wage jobs here at home.

The recent unprecedented move by the Speaker of the House to change the long-standing rules for consideration of Free Trade Agreements is a disappointment, because without this agreement, fewer American businesses will be able to access this growing market. If Colombians don't buy our tractors, they'll buy them from Japan. If they don't buy our high-tech equipment, they'll buy it from China.

What’s interesting about the debate over the Colombia FTA is that we already have free trade between the United States and Colombia, but it’s one-way free trade. Since the 1990s, Congress has voted routinely and overwhelmingly to open the U.S. market to duty-free Colombian imports.

Keep these numbers in mind: 92, 16, 365. No, unfortunately, these are not tonight’s winning lottery numbers, but they are interesting.

92 is the percentage of imports from Colombia that currently enter the United States completely duty free. 16 is the number of years it has been since Congress first approved preferential treatment for Colombian imports as a way to reduce poverty, promote democracy, and fight the drug trade. And 365 is the number of Members of Congress from both sides of the aisle who voted for these one-way preferences the last time they were up for renewal.

Many in the media would have you believe that we’ve embarked into some uncharted territory here, but what the Colombia FTA does is to level the playing field for U.S. companies.

EDA REAUTHORIZATION

FTAs are an important tool for regional economic development efforts as we connect with the worldwide marketplace. As regions continually evolve and innovate to meet the demands and capitalize on the opportunities that the worldwide marketplace offers, so must government, at all levels, adapt its approach to fit the changing times of the 21st century. One way to do this is by making government programs more flexible.

I’m proud that EDA has continually tried new ideas to be innovative and more flexible. We haven’t always succeeded, but there is one thing I know we all agree on: the reauthorization of EDA. Today, I am pleased to announce that the Administration has submitted legislation to Congress to reauthorize EDA through 2013, and that this legislation includes some new provisions that answer the calls that you have made for greater flexibility and more local control of your economic development efforts.

Our reauthorization bill includes:

• Improvements to EDA’s Revolving Loan Fund program. We heard your concerns and we will ask Congress for authority to provide RLF operators the flexibility to allow the sale of assets and accumulated capital in accordance with a strategic re-use plan.

• You wanted greater local control of your Public Works investments, and we will ask the Congress for authority for greater flexibility to allow the sale of EDA-funded physical property prior to the end of the current 20-year “useful life” in order to be more responsive to local economic conditions.

We have crafted this legislation, we hope, in a manner that will garner broad support from the economic development community and both political parties. It is essentially an “EDA is working well, let’s keep it going” reauthorization proposal.

I am proud that EDA is adapting to keep pace with the changes of 21st century, and I look forward to working with Congress to pass this legislation to secure EDA’s future as the Federal economic development entity focused on “what’s next.”

CLOSING

Economic development in the 21st century has moved beyond the city vs. city, county vs. county, and even state vs. state smokestack-chasing exercise of the last generation. Today, it’s about growing your regional assets. It’s about integrating into the worldwide marketplace. It’s about developing a competitive edge. It’s about fostering innovation. It’s about answering the “what’s next” question.

Like everything else in the 21st century, economic development is getting more complex and more international. I am proud to be leading EDA at a time when the agency and its partners are looking beyond the usual suspects of economic development and are instead looking to the opportunities that our 21st century worldwide marketplace presents. Thank you for being part of this important effort, and thank you for being here today.

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