Neal Asbury opened the show by suggesting that President Obama missed an opportunity to reassure Americans about the country’s current $1.4 trillion debt.   He characterized the speech as “flat and uninspiring,” and wondered why it took more than 4,000 words for the president to even address the nation’s debt.

“China owns so much of our debt that we are continuing to mortgage our future to the Chinese.  They now consider themselves the senior partner in the China/U.S. relationship. The trouble is that this relationship is not creating U.S. jobs, only jobs in China,” said Asbury.

Asbury predicts this trend will continue until the U.S. can demonstrate strong leadership at the top.

Returning to the show as a guest was Francisco J. Sánchez, who serves as Under Secretary for International Trade at the U.S. Department of Commerce. As Under Secretary, Sánchez leads the International Trade Administration which assists in the development of U.S. trade policy in the global economy; creates jobs and economic growth by promoting U.S. companies; strengthens American competitiveness across all industries; addresses market access and compliance issues; administers U.S. trade laws; and undertakes a range of trade promotion and trade advocacy efforts.

Neal introduced Sanchez by reminding listeners that for every $1.00 invested in trade promotion it brings $300 in value from expanded U.S. exports.

Despite skepticism about the economy, Sanchez notes that the U.S. economy rose by 3.2 percent during the last quarter, with 50 percent of that growth attributed to exports.
“The International Monetary Fund predicts that 80 percent of the world’s economic growth will take place outside of U.S. borders, so the U.S. must be engaged with the rest of the world when it comes to trade,” said Sanchez.

Sanchez points to the recent progress made in passing the South Korean Free Trade Agreement as a promising start.  It is expected to generate $11 billion in revenue to the U.S. and create some 70,000 U.S.jobs.
The next step is the ratification of the Free Trade Agreements with Panama and Columbia.  Combined with the South Korean Free Trade Agreement the three will be worth some $13 billion to the U.S. The Panama Free Trade Agreement has special relevance since the Panama Canal is undergoing a massive reconstruction that will allow the new supertankers to navigate through the canal.  This will reduce logistics costs and expand trade potential.

The discussion turned to whether or not the president needs to have his Trade Promotion Authority restored to be able to negotiate trade agreements.  Sanchez does not think that this is required if he can make the case for foreign trade.

Sanchez is particularly bullish about the Trans Pacific Partnership (TPP), which will create multilateral agreements with a number of Pacific nations, including Vietnam, Singapore, Peru and Chile.

“It’s important to remember that the U.S. enjoys trade surpluses with those countries in which we have Free Trade Agreements.  When we have a level playing field, U.S. companies compete very well with foreign markets, but of the 300 Free Trade Agreements around the world, the U.S. only has 17,” noted Asbury.

Sanchez concurred and added that Free Trade Agreements allow U.S. companies to compete offensively and defensively by helping them expand market share.