I’d like to thank Niels and everyone at the American Chamber of Commerce who worked so hard on my whirlwind trip around the United States. Over the course of five days, I visited Seattle, Minneapolis, Philadelphia, and my old stomping grounds in College Park, Maryland. In each city, I spoke to American business people about the tremendous opportunities available to them here in Australia.
I also had the pleasure of touring some of the United States’ most innovative and cutting edge companies, including Boeing – which I visited with Maureen! – Medtronic, Intellectual Ventures, and 3M.
Overall, the tour was a tremendous success. I suspect it’s because Americans and Australians have been doing business together since the Philadelphia arrived in Sydney Harbour in 1792. It had a cargo that included several kinds of alcohol, tobacco, and beef – we clearly know what to bring when we want to make friends. For more than two centuries, the business relationship begun that day has continued to be very good for both countries. Today, Australia is one of our most valued partners and allies.
Almost a year ago, I spoke to you about the bilateral trade and investment relationship. I talked about where we were on that day, and where I would like us to be in the future. Today, I’d like to talk about the progress we have made over the past year in those areas.
This year is the 10th year since the implementation of the Australia-U.S. Free Trade Agreement. I would argue that this agreement has had a greater effect on the bilateral relationship – and the globe – than any other except ANZUS. It’s a relationship that is tremendously beneficial to both the United States and Australia.
Australian Ambassador Kim Beazley has said that ours is Australia’s most successful FTA, in terms of what he calls “kit and cash.” U.S. companies are major exporters of agricultural and mining machinery (the “kit”) and major investors in those industries (“the cash”).
Hundreds of U.S. companies – including some of our largest – are exporting to, and investing in, Australia. Chevron and ConocoPhillips have their biggest investments in the world here. Boeing has its largest footprint outside the U.S. in Australia. Australia is GE’s second biggest market after China. This is also a top five market for Medtronic, which has 780 employees in Australia. It also had $800 million in revenue here last year – only $300 million less than it made in China.
Since the agreement was implemented, our two way goods trade has increased by 65%. The two ways services trade has increased by 72%. Our bilateral trade of goods and services is worth more than $61 billion. By the end of 2013, U.S. Foreign Direct Investment stock in Australia was $159 billion, and Australian companies had invested $44 billion in the United States.
If we count indirect investment, our entire economic relationship is worth more than a trillion dollars.
Our bilateral trade and investment relationship is a success by any measure – not just for companies, but also for the public. I recently read that U.S. exports to Australia directly support more than 300,000 American jobs. American companies employ more than 350,000 Australians – almost as many people as live in Canberra.
Over the past few years, those were jobs that we desperately needed as we struggled to recover from the Global Financial Crisis. In 2009, our unemployment rate hit 10%. Today, we are at 5.5% in part due to record high exports and a manufacturing sector that is recovering faster than the rest of the economy. We have had more than 60 months of unbroken job growth and have added more than 12 million jobs to our economy.
All of these statistics underline some of the reasons for my recent trip.
In this day and age – companies that export their products overseas are good for our economy. Each additional billion dollars’ worth of exports supports about 5,000 new jobs. Jobs with companies that export tend to pay about 18% more on average than companies that do not. Rising exports have contributed to nearly one-third of U.S. economic growth as we recover from the Global Financial Crisis.
The value of exports was brought home to me very clearly last month when I visited the plant in Renton, Washington, where Boeing builds its workhorse 737. That plant is currently running three shifts to try and make a dent in the backlog of orders. It’s churning out a couple of planes daily and around 42 planes each month. In 2014, Boeing had a record year for deliveries and sales. A lot of those planes are going to Australia – and Asia.
With tens of millions – or more – of new passengers in emerging Asia, there is a huge potential for growth. Right now, there are more daily flights between Seattle and Spokane, Washington, than between all of China and India, which together have 2.4 billion people. That situation is unlikely to last as these two powerhouses continue to rise and add consumers to the middle class.
But Boeing is not the only company for which business is booming.
Companies – including our smaller and medium sized businesses – are doing better now than they have for years.
After struggling through the global financial crisis, they are able to think about doing more than just trying to survive.
Today, these companies are thinking about how they can tap into the 95% of customers that are located outside the United States.
Today, they are thinking about Australia – the U.S. Commercial Service officers travelling with me met with representatives from numerous American companies across the country that were very interested in how exporting to the Australian market could help their businesses grow.
Tomorrow – like their larger counterparts – those companies could very well be thinking about how to access the vast markets of Asia using Australia as a base of operations.
Last year, I also spoke to you about some game changers for the bilateral trade and investment relationship. Among them were innovation and infrastructure investment. These sectors still represent enormous opportunities.
When I spoke to the Chamber last May, I was pleased to be here to support the signing of AmCham’s Memorandum of Understanding with Australia’s largest indigenous business association, Supply Nation. I commend Maureen and Niels for moving forward to increase engagement between American businesses and Australia’s indigenous communities.
Following the Australian federal government’s announcement last month that it will establish a target to award three percent of government procurement contracts to indigenous businesses and suppliers by 2020, there will be even more opportunities for the American business community to develop partnerships indigenous businesses. I encourage you to seize this opportunity with both hands.
And I know that many of your companies are already doing great work in cooperation with indigenous communities in Australia. In a few weeks, Secretary of State Kerry will be requesting nominations from Ambassadors for the State Department’s Awards for Corporate Excellence. These awards recognize U.S. firms that are committed to “giving back” to the communities where they operate. I would love to be able to forward a nomination to the Secretary on behalf of some of your companies which have contributed to greater prosperity in indigenous areas.
And I look forward to returning next year to hear about the successful partnerships that you have launched!
One of President Obama’s budgetary priorities is improving America’s aging infrastructure. We need the ports, roads, bridges, and internet that will help us bring our products, ideas, services, and technology to the world. These major projects represent huge opportunities for investors.
Managed funds are increasingly interested in investing this money abroad, including in local infrastructure projects. I think the $1.7 trillion dollars in assets that superannuation funds have under management could provide a boost to the U.S. economy if we can get the details worked out.
Over the past year, I have spent time talking with superannuation fund managers, including some meetings in Melbourne and Sydney in February and March. Representatives of Australia’s superannuation industry also joined me at the Commerce Department’s SelectUSA Investment Summit in Washington, DC on March 23. I, along with my team at the Embassy and Consulates, am working with Australia’s superannuation industry and others in the financial services sector to establish linkages between them and infrastructure investment needs in the United States.
Australia is also making a big push to develop new infrastructure, including road and rail links and a new airport for Sydney. The United States has both the expertise and the equipment to compete for these projects.
After all, when you get right down to it, cooperation on major infrastructure projects is a time honored tradition here in Australia. You don’t have to look any further than the Pyrmont Bridge in Darling Harbour to see a shining example of what we have historically done together.
The current bridge opened in 1902 and is one of the oldest electric swingspan bridges still in operation. The swingspan of the bridge has opened more than 600,000 times in its lifetime and is still driven by the original General Electric motors 113 years later. I think that’s some pretty impressive engineering.
The electric motors were considered an unorthodox – not to mention un-British – choice at the time they were installed. Sydney didn’t even have electric street lights at the time. But, like their descendants, the designers of the bridge were innovators who weren’t averse to trying out some new technology.
And that brings me to the second of the game changes I talked about last time I was here.
In his State of the Union address in January, President Obama spoke about what it would take for the United States to succeed in the 21st century. Unsurprisingly, they were the same things that businesses will need: well-educated and knowledgeable workers, more exports, free and fair trade environments, and – far and away the most important – innovation. Without strong research and development and cutting edge science and technology, we will not be competitive in the global economy of the future.
Fortunately, companies like yours – and like the ones I visited when I was back in the United States – are rising to meet the challenges.
3M, whose tagline – “Innovation” – describes perfectly the secret to their success, gave me a tour of their innovation center in St. Paul, Minnesota. Last year they were awarded 625 patents in the U.S., adding to their total of more than 100,000. This is a company that took sandpaper and turned it into masking tape and turned that into a giant multinational with more than 60,000 products under production.
Medtronic, located in Minneapolis, is working to meet the needs of an aging population with its integrated health solutions. Their medical devices monitor health data in real time to ensure that doctors are notified before small problems become emergencies.
Finally, Intellectual Ventures in Bellevue, Washington, uses its vast network of inventors to solve global problems by sending out Requests for Inventions. Right now they’re working on keeping vaccines cold for longer periods so they don’t spoil, a new kind of broadband antenna, a nuclear reactor that uses the waste of other reactors, and a new feed for dairy cows that increases milk yield.
While Silicon Valley is what most people think of when they think of creativity and innovation, it’s happening all across the United States. But Americans don’t have a monopoly on good ideas or talented people. Scientists and engineers from every country are revolutionizing the world we live in. If we want to solve the world’s greatest problems, we must look beyond our borders and increase our cooperation.
It is tremendously important for us to work closely with our friends and partners.
We could have no better partner on in this goal than Australia. Former Prime Minister Bob Hawke called Australia the “clever country,” and he was absolutely right.
As innovative as 3M is, they recognize the value of what Australians – and others from all over the globe – are bringing to the table. 3M Australia’s Commercial Solutions Division is developing products like a cutting edge non-slip coating for floors.
Boeing, GE, and Ford – among other American companies – all have research and development hubs here in Australia. Our academics and scientists regularly share their ideas and research. In science and technology, conservation, research, medicine, security and defense, biofuels, clean energy, and neuroscience, we have a lot to offer each other.
I’ve been to locations across Australia from the Techport to Fisherman’s Bend, from Deakin University and Swinburne University to Queensland University of Technology. The variety and quality of the work being done here is absolutely cutting edge.
Our cooperation in research and development spans universities and government, think tanks and corporations. These partnerships help our economies expand, develop, and compete in the world market. Creative people and creative companies are teaming up to figure out how to deal with a changing world, changing markets, and a changing climate.
These partnerships are necessary to spark innovation, which is one of the keys to improving productivity. But one of the common concerns I have heard over and over is about the difficulty of getting ideas funded so that projects could make the leap from the drawing board to the market. Making a scientific or technological breakthrough shouldn’t be the easy part of the equation.
That is, in part, why we began a series of “Ambassador’s Innovation Roundtables” last year. The first was held in Canberra in July. Since then, we have held two additional roundtable events in Melbourne and Brisbane.
These events put students, business leaders, academics, government officials, venture capitalists, and entrepreneurs in the same room to talk about best practices and expanding cooperation.
We are planning to hold our next Innovation Roundtable on May 28 at the University of Sydney. I hope that many of you will join us there.
Before I wrap up, I want to say a few words about where we are with the Trans-Pacific Partnership.
We know how successful companies can be when we – as Niels has pointed out with regard to the AUSFTA – make it easier for them to enter a particular market. So it’s important for our governments to take advantage of every opportunity to improve our trade. It’s even more important to ensure that the rules of the road for trade and investment are clear, consistent, and applicable to everyone equally.
One of the major Administration priorities I spoke to you about last year was the TPP. This cutting edge trade deal is the economic centerpiece of President Obama’s rebalance to the Asia-Pacific region. The twelve countries in the agreement together make up 40% of the world’s GDP.
The TPP includes strong and enforceable labor standards and environmental commitments. It will also include commitments on transparency and regulatory cooperation to make it easier for businesses to operate across the region.
We are currently in the end stages of negotiating the final details of the TPP.
TPP negotiators met last week to hammer out remaining details, and Ministers from TPP countries will meet at the end of May. In addition, Japanese Prime Minister Abe is in Washington, DC this week. We hope he and President Obama will be able to discuss some of the remaining bilateral issues and clear the way for completion of the TPP.
In short, our governments and our negotiators are doing their part to get a good deal. Now, it’s your turn.
TPP has bipartisan support in Congress, but it’s also facing some opposition – as is the case with most agreements. The President needs Congress to approve trade promotion authority legislation that will give our negotiating partners confidence that the deal we reach will receive a fair and timely vote.
I’d like to ask you to let Congress – both sides of the aisle – know how important the TPP is for the future of American businesses. You as individuals and the American Chamber as an organization have powerful voices. I urge you to use them both early and often.
As a former Congressional staffer, I can guarantee that the people who want to see this agreement fail absolutely will call and write and lobby. Failure is not an outcome that we can accept, either as business people or as responsible global citizens. We cannot afford to let this opportunity slip away. If the United States, Australia, and other like-minded countries don’t set the rules of the road for trade and investment, other countries will.
This year, as we celebrate the 75th anniversary of diplomatic relations between the United States and Australia, I think it’s a good time to reflect on our partnership.
Over the years, our historic ties have grown to encompass issues ranging from educational exchanges to trade to conservation to scientific research. We are working together to counter violent extremism and the hateful ideology of ISIL, to contain the spread of Ebola and find a cure for AIDS, to develop new sources of energy, and to encourage the entrepreneurs of tomorrow.
As FTA partners, we’ve built close partnerships through increased trade and investment. Thousands of our citizens are doing business across the Pacific Ocean, making our bilateral ties even stronger than they were a decade ago.
As global partners, we’ve worked together in the multilateral forums that are building the 21st century economy, from APEC to the WTO to the G20. We are finalizing the next chapter – the Trans-Pacific Partnership agreement – that will ensure the security and prosperity of this region for decades to come.
When President Obama was in Brisbane last November, he spoke about how Australians and Americans share many traits. We are both nations of immigrants. Our forebears bequeathed to us a common desire to push toward the frontier, to seek the next challenge beyond the horizon, and to discover solutions before others even realize that there is a problem.
We know, as the President said, that “the future is ours to make.”
And we are making that future together with business people like you – and companies like yours – leading the way.
Thank you. I look forward to our discussion.