The world trade according to Frank

Soon after he took office, President Barack Obama appointed Tampa native Frank Sanchez as undersecretary for international trade at the U.S. Department of Commerce.

Sanchez, who ran for Tampa mayor against Pam Iorio in 2003, was an early supporter of Obama, but he also had the credentials.

During the Clinton administration, he promoted trade as a special assistant to the envoy to the Americas. Later, as an assistant secretary for transportation, he oversaw aviation treaties. As a business consultant, he worked in more than 30 nations.

As the third-ranking officer at the Commerce Department, Sanchez oversees more than 2,000 employees. His responsibilities include enforcing trade agreements and helping develop trade policies.

He worked in the post for 10 months, awaiting official Senate confirmation, before Obama made a recess appointment. Sanchez was sworn into office in March.

He stopped by the Tribune's editorial department recently to discuss with board members his responsibilities and the outlook for trade and the economy.

Joe Guidry

You eventually will have to receive Senate confirmation. Do you have any indication that you will be targeted by Republicans?

I don't think so. I was voted out of both committees that had to approve me. I was just an appointment sitting on the Senate floor with 60 other people.

I ... am actually closer to a lot of Republicans on trade than I am with my own party. I am a pretty strong free trader.

What do you say to people who think free trade has hurt the manufacturing industry that provides so many jobs?

First, we continue to manufacture more than I think the public probably realizes and export much of those goods. We still export a lot in the aerospace field, in medical devices. We have a growing opportunity in alternative energy.

It's true we have a lot of industries that no longer manufacture here, but there are still a lot of high-value products that we do manufacture. And those high-manufacture goods use thousands of suppliers that may not have highly skilled workers but they are indirectly creating jobs.

The perfect example of this is Boeing. We have assisted Boeing a lot through our Advocacy Center, which is one of the offices that I have. Any company that is selling overseas can come to us for advocacy, and if it is a big enough project, we will get the president himself to advocate for the company. And Boeing is one of our biggest customers for that service. Its effort, along with a bunch of others, has yielded in the first seven months of 2010 $11.5 billion in U.S. content that was put under contract. That translates into about 70,000 jobs.

What do you say to those who want to tax companies that are shipping jobs overseas?

I would say it's not in our interest to tax investment that goes abroad because we should be attracting foreign investment - and we have - and that's creating thousands of jobs in the country. And I still think American companies can compete as long as there is a level playing field and we are striving to create that through the World Trade Organization.

To the extent that companies from abroad are selling in our market in a manner that is not fair ... I have the right to bring cases against dumping. And I have brought plenty of them.

Does this create friction?

My counterparts in China have chastised me for bringing more cases against them than we did a year ago. My response is I hope that I don't have to bring any, but don't make me do it. As long as your country dumps product or your government provides illegal subsidies, we are going to aggressively enforce our trade laws. I think that is the proper way to do it, not to stifle investment.

Is China your biggest headache?

China is a great opportunity and huge challenge. This is a country with 1.2 billion people and a growing middle class. I would say their middle class is already bigger than our population. So the opportunities are very good, and the Chinese cause us concern.

Any examples?

The latest concern is a policy they are putting forth called indigenous innovation. Indigenous innovation, in short, is essentially requiring a company, if they want to sell to the (Chinese) government, to have created the innovation in China.

This is a huge barrier. We have companies that have the right technology and we happen to have designed it here. The Chinese are essentially saying if you want to sell it, you have to make it here (in China).

This would hit at exports in an area where we have a competitive advantage. The U.S. still invests more in (research and development) than any country in the world.

What has been your response?

Part of what we are trying to convey to the Chinese is this approach is not new or novel. It has been tried in the past and failed. If your goal is to spur innovation, this is not the way to do it.

We don't think it is wrong for them to want more innovation in their country. But do it in a way that does not stifle trade.

Are there many trade opportunities in Saudi Arabia and Qatar?

Saudi Arabia and Qatar are two countries that are emerging markets that we call 'next tier countries.' We have China, Brazil and India that would be first tier emerging markets and then there are next tier emerging markets like Turkey, Saudi Arabia, Qatar, Vietnam and Indonesia.

So I led a trade mission to Qatar and Saudi Arabia because those two countries will be spending in the next 10 years $750 billion to improve their infrastructure. That will be everything from building hospitals to universities, to completely revamping their petrochemical companies, to telecommunications, their highways, you name it.

... So there is a lot of opportunity there.

How are you doing on your goal of doubling exports in five years?

I think very well. Exports increased 17 percent in the first seven months of 2010. As I said, through our advocacy efforts we have seen contracts totaling $11.5 billion in U.S. content just on our advocacy cases. We led or organized 18 trade missions with 160 companies. We have brought hundreds of international buyers to the U.S to attend trade shows and trade fairs. I am confident we are going to show results.

But in the long term our success will be in large part dependent on our ability to lower trade barriers.

You can do 200 trade show missions and bring 5,000 buyers and help small business set up their schedules overseas - all those things the International Trade Administration does - and they have an impact.

But long term, the most important thing we can do is work very hard with our sister agency (the U.S. Trade Representative) to lower both tariff and nontariff trade barriers.

Can you give us an example of those barriers?

Sure, China last year banned pork because of fears of H1N1, and every country has a legitimate right to protect their public from dangerous products or unhealthy food.

But generally, countries that engage in a free trade system try to do so in accordance with scientific standards. China just pretty much said if it comes from America, it's out.

We pushed real hard, saying, look, we appreciate your right to protect the public. But apply scientific standards. Test the food. If there is problem, then stop it. And we succeeded. We got them to lift the ban.

On the broader issue of the economy, is there surprise in the administration that the recovery hasn't gotten more traction?

First, I take issue with that statement. When Barack Obama became president, the U.S. economy was growing at a negative 6.4 percent, and today it is right around 3 percent. So you have seen a more than 9 percent shift. So to say that nothing has happen would be to ignore the fact that we have grown by more than 9 percentage points. We were digging out of a pretty huge hole.

Is it fair to say that there is frustration that it hasn't happened quicker? Yes, there is frustration from the president on down. But in 2009 we shed millions of jobs. This year we have had job growth.

Look where we are today compared to where we were 19 months ago. We've come a long way. Now do we have a long way to go? Yes, absolutely we have a long way to go. ... But I think if we had not done the things the president did, I think we would be in pretty bad shape right now.

And you feel trade will contribute to the recovery?

Part of the president's recovery plan is the export initiative. A few years ago, exports supported 10.3 million jobs, and those jobs tend to pay 15 percent more than average jobs.

In 2008, when the economy really started tanking, the jobs supported by exports go down to 8.5 million. So the president shines a light on this because he recognizes part of a robust American economy includes exports.

The other thing he recognizes is that 95 percent of the world's consumers live outside our borders, and according to the IMF (International Money Fund), 87 percent of the economic growth in the world will happen outside the United States.

So the president has done a lot of good things to move us from the disastrous teetering point we were at. And he recognizes that part of what he has to do is help stimulate a robust export sector.