Briefing With Acting Assistant Secretary for Western Hemisphere Affairs Michael G. Kozak On U.S. Economic and Trade Agenda in the Hemisphere

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Special Briefing
Michael G. Kozak, Acting Assistant Secretary
Bureau of Western Hemisphere Affairs
Via Teleconference
September 1, 2020

AMBASSADOR KOZAK: Well, thank you, Cale, and good afternoon to everyone. Thank you for joining in on the call today. A few weeks ago, I spoke to you about how the United States is partnering with government and civil society to strengthen this hemisphere of freedom. Today, I’d like to discuss our efforts to promote economic growth. This is particularly important now as the region continues to combat COVID-19 and look towards a road to recovery.

The United States is the economic partner of choice in the region. This results from the value that the United States and U.S. businesses provide and the quality work that they do. We support entrepreneurship and free enterprise. We believe in transparency and procurements that go to the best bidder. And we expect our investors will respect laws on corruption, labor standards, worker safety, and the environment. Not every country can say that.

The United States is the top trading partner for over two-thirds of the region’s countries. We are the source of over $1 trillion of investment in the region. We have free trade agreements with 12 countries in the Americas. U.S. goods and services trade with the Western Hemisphere totals nearly two trillion annually; that’s trillion with a T. The next biggest trading partner is China with 372 billion.

As the region’s economies begin to reopen, the United States is more than ever the trusted, reliable partner, and we are already hard at work. Secretary Pompeo recently visited the Dominican Republic. National Security Advisor O’Brien and Chief Executive Officer of the U.S. International Development Finance Corporation Adam Boehler visited Panama and Colombia. These trips focused on private sector-led engagement and trade based on fairness and market access.

The need to spur post-COVID economic requirement makes our Growth in the Americas or America Crece initiative all the more relevant. America Crece is a significant part of the U.S. Government’s positive economic agenda for the hemisphere. Countries of the region face a critical infrastructure gap, which drags down economic growth. America Crece channels the resources and expertise of the U.S. Government to attract private sector investment in energy, transportation, and telecommunications infrastructure across the region.

This is our basic philosophy: Traditional assistance programs can be effective in building government capability, but restoring jobs and growth requires attracting private sector investment. To date, we have signed America Crece agreements with ten partner countries: Panama, Chile, Jamaica, Argentina, Colombia, and more recently, El Salvador, Ecuador, Brazil, Honduras, and Bolivia. These agreements include commitments by the partner countries to strengthen competitiveness and transparency in line with international best practices. We expect to sign more.

The DFC is a critical tool in driving investment in support of America Crece. We expect the DFC to bring about at least $12 billion worth of investment in the region over the next five years. The DFC announced July 21st its intent to stimulate up to one billion in investment to bolster critical infrastructure, support health systems, and expand financial services for small businesses in Honduras. It has also committed up to $1 billion in investment over three years in support of development in Guatemala.

As we see DFC expand its efforts, we’re also witnessing big investments by U.S. companies. For example, U.S. energy company AES has invested more than $1.4 billion in new generation facilities in Panama. Its liquified natural gas plant and terminal, AES Colon, is the largest U.S. investment in Panama. It is the first LNG terminal in Central America, and I was honored to attend the inauguration of this facility last fall. DFC has also partnered with Taiwan through the Women’s Global Development and Prosperity 2X Initiative. This $350,000 collaboration will focus on women’s entrepreneurship and advance investment in developing countries. DFC and Taiwan will work with private sector partners to design and conduct two training programs geared towards investment officers and women entrepreneurs.

With Japan and Taiwan, we’re bringing the Global Cooperation and Training Framework to the Western Hemisphere. The GCTF’s first event in the region will take place in a virtual format on September 8th with Guatemala as the host. Expert speakers from Taiwan, Japan, the United States, and potentially Canada will focus on digital tools for COVID-19 response and recovery. We are planning additional GCTF sessions to help the region’s economies recover and attract tech sector investment.
Another important player in revitalizing our economies are the international financial institutions, and in particular the Inter-American Development Bank. It is critical that the bank’s leadership understand how to unleash economic dynamism in the region. We must support entrepreneurs, businesses and governments as they create jobs and infrastructure and solve problems in their countries. That is why we support the candidacy of Mauricio Claver-Carone. Mauricio represents a new generation of fresh thinkers throughout the region who believe the Inter-American Development Bank can refocus its efforts on its central mandate of spurring economic development. The current crises require a new approach and new energy. Mr. Claver-Carone has committed to serve one five-year term in an institution that has had only four presidents in 60 years.

Mauricio will bring with him some of the best economic minds from Latin America and the Caribbean. He is not only the nominee of the United States, but of countries in every subregion of the continent. He represents a true renewal movement. I will note that the IDB board just this July unanimously voted to hold elections in September. We deeply appreciate the vast majority of countries in the hemisphere that are determined to go forward with that election so that the region’s shared vision for an active, inclusive IDB can be implemented.

Now, the U.S. will host the Ninth Summit of the Americas as our region seeks to recover from COVID-19. The ninth summit will reinforce the region’s commitment to protecting the essential role of democratic institutions in strengthening our economies. Democracy is essential to building reliable infrastructure and a future of economic growth in the Americas. The COVID-19 pandemic has scored – underscored the importance of secure supply chains with trusted partners. Countries including the U.S. must reduce reliance on Chinese manufactured goods. The United States is turbo-charging efforts to strengthen and diversify U.S. supply chains. We’re working through the USMCA and exploring new initiatives to rebuild hemispheric north-south supply chains. The goal is to move both sourcing and manufacturing closer to home.

Now, all of these tools form the framework to respond strategically to the region’s need for growth. That in turn is essential to address the second and third-order effects of the pandemic. The United States will continue to be the partner of choice in helping the region overcome this challenge, but with or without COVID, growth is the essential condition for cementing democratic institutions and completing the vision of the hemisphere of freedom.

And with that, I’ll be happy to take your questions.
MR BROWN: Okay. Let’s move along to the next question. Let’s go to the line of Gabriela Rosna (ph).

QUESTION: Yes, hi. Thank so much for this opportunity. This question is related to Venezuela. We would like to know if you have any comments about the last events in Venezuela, because in their release of some political prisoners, what will be the real intention of Maduro with this action? And what message does the United States – is the United States extending to the regime right now? Thank you.

AMBASSADOR KOZAK: Well, thank you. Look, I mean, we’re – on one hand, we’re always happy when a political prisoner who by definition shouldn’t have been imprisoned in the first place gets released. So yes, that is – in that sense it is a good thing. But you were right to put the emphasis on “some” political prisoners. According to reliable NGOs there, I think Venezuela holds well over 300 or has been holding well over 300 political prisoners. As best we can tell, this latest activity will reduce that by maybe 50 or so. These people are still not free; in many cases they’re threatening that if they engage in terrorist activities – which seem to include membership in one of the major political parties – that they could be re-jailed. So we don’t see anything significant.

This is a country where Maduro has not only taken over most of the bigger opposition parties and tried to replace their leadership with his puppets, he’s taken over illegally the national electoral commission so that he completely runs the elections. There’s still no freedom of the press. There’s no freedom of expression. There’s no freedom of assembly. And the numbers of extrajudicial killings that have been documented by the UN high commissioner continue at an astronomical level. So in that context, yeah, it’s great that 50 people got slightly better conditions, but the overall situation remains grim indeed.

MR BROWN: Next let’s go to the line of Will Mauldin.

QUESTION: Hi, thank you so much for having this. Just was wondering – I was on vacation near the Canadian border recently, and I was wondering, obviously the border closure for nonessential travel up there is probably having an effect on tourism and business, even though trade is typically allowed. With the USMCA coming into effect, I was wondering what’s being done to – if anything – to get that trade and economic relationship of North America back together again.

AMBASSADOR KOZAK: Great. Thank you for the question. Look, from the beginning of this crisis U.S., Mexico, and Canada have collaborated together to try to come up with a – the right balance between restricting nonessential travel so as to help control the spread of the disease, and at the same time not undermine the basis for our common prosperity, a big part of which is trade amongst the three countries. So I think what has happened thus far has been a model of collaboration amongst the three countries. That continues to occur. I think our monthly basis, our leadership is discussing whether there are tweaks or turns that can be done. Sometimes you find unique little situations that can be fixed.

But I think basically they’ve had it right so far, which is “nonessential” has been defined as going across the border to go shopping, going for tourism purposes, or something like that; “essential” has been anything that involves large commerce. So yes, there’s still a huge effect on the economies of all three countries, but I think we’ve tried to find the best compromise between those two sets of imperatives.

This translation is provided as a courtesy and only the original English source should be considered authoritative.
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