For Immediate Release
Office of the Press Secretary
August 13, 2002
Remarks by the Vice President During the Trade Session at the Economic Forum
TIME: 9:45 a.m.
(Vice President Cheney enters the forum.)
AMBASSADOR ZOELLICK: Thank you, Jagdish. And, as you
can see, all the cameras were not just the nice comments,
it's because the vice president was coming.
Ann, I think you wanted to --
MS. VENEMAN: Well, Mr. Vice President, thank you for
joining us. I think we have heard some very interesting
comments about the importance of trade, about the benefits to
jobs as we have had discussions from a diverse group of
industries today, both small businesses and larger businesses
and people from all spectrums of those businesses in terms of
the kinds of jobs. So we welcome you and offer for you to
make some comments, if you would like to join in the
conversation.
VICE PRESIDENT CHENEY: Well, thank you very much, Ann.
Let me, on behalf of the President, thank all of you for
coming, for giving us so much of your time this morning. I
don't propose to make any remarks. I think these sessions
are best if we come and listen. I think all too often people
meet with Washington officials and you get to listen to us
and we never get to listen to you. So I think the best
policy this morning will be for me to sit here and soak up
the wisdom that you have got to offer. And we'll have the
opportunity later on to get together as a group with the
President. And I look forward to that session as well. So,
again, thanks for being here.
AMBASSADOR ZOELLICK: Thank you, Vice President. I --
(Applause.)
AMBASSADOR ZOELLICK: We have been working our way
through some of the global economy with some big companies.
But I had a little chance to talk with Margaret McEntire on
the way in here, who's got a small business but has got some
global approaches to it. So you want to comment?
MS. McENTIRE: I'm a farmer and rancher too. So I kind
of fall into a little of everything. I have a small company
started in my garage ten years ago and now I'm in 40 foreign
countries. I am exporting candy and spoil-type supplies and
I'm importing -- I'm importing all the candy and floral-type
supplies and I'm exporting franchises around the world. This
month into China, a small island of Macronesia, in Spain, and
in Romania.
So I'm dealing with a lot of interesting things and
there's some facts and figures. The International Franchise
Association would tell you there are about 800 of us. We
have under 100 employees, generally, in the United States.
Out of those 800 franchise systems, 400 of them are doing
international business. How? And the vast majority of
these, like Candy Bouquet International that's in Little
Rock, we have just a small amount of employees here but
worldwide I have around 5,000. So trade is very important to
me as well as my farming trade.
The industry's actually a -- hit a trillion dollars in
2000, one trillion dollars. I'm not sure what farming is. I
don't have those statistics. I couldn't get them from the
farmers.
Royalty and other international payments are made back
to us. So you see that the revenue stream is going both
directions with the importing of goods and then the exporting
of franchising, and those goods again. It creates additional
jobs on both ends and economic development for workers.
The expansion of franchising is small business. And, if
you had noticed franchising in the last ten years, you saw
strip centers with no -- nothing but mom-and-pop stores. And
now you see every strip center with one or two franchise
companies. It's a monstrous way to -- to do trade, as
Jagdish was talking about. We can do it both ways with this
type stuff. And we have only got 400 of these in the United
States that are doing international trade now. But those
numbers have grown about 1,000% since 1990, which is
unbelievable. So when it comes to franchise rules and
regulations and laws, please be careful with us and help us
along the way.
As far as being a farmer in Arkansas and a rancher here
in Texas, I'm involved with rice and soybeans. As Barbara
was talking about, she's got the pigs and I have got some
cows. And there's a lot of exporting of those particular
products. I'm very interested in what's going on in Cuba and
trying to lift some sanctions there.
I appreciate all of the inter-twining work of both
political parties with the farm bill. I would like to thank
all of you for helping us with that. That will help the
delta areas of Arkansas for certain.
AMBASSADOR ZOELLICK: Thank you. Mr. Vice President, as
you can see, we have welcomed a range of views of things we
like and a little problem with too. Maria --
MS. McENTIRE: We're exporting candy and Jim's exporting
airplanes, so...
AMBASSADOR ZOELLICK: Maria is another entrepreneur
whose created a fantastic business but has not only served
local markets but also abroad; is that right?
MS. DE LOURDES SOBRINO: Yes. Thank you very much.
Good morning. Good morning it's a great honor to be here
today and participate and represent the small-business
community. I would like to share some of my obstacles that
we face and offer an opinion on how private companies and
public -- can help grow businesses and create more jobs.
As you know, I have been blessed living in the United
States and I'm living my American dream. Over 20 years ago,
I immigrated from Mexico with a heart full of dreams to
succeed in the United States. Soon upon my arrival as a
consumer, I was surprised to learn that I couldn't find the
ready-to-eat gelatin desserts very traditional in Mexico.
Now we're talking about gelatins. Okay.
(Laughter.)
MS. DE LOURDES SOBRINO: So with the entrepreneurial
spirit and equipped with my modest recipe, I had the
opportunity to start Lulu's Desert Corporation, a very small
company. I used to fill 300 cups of gelatin a day sold -- on
consignment basis, I really started this business. Without
knowing it, I created a new category in the refrigerated deli
section under supermarkets in America.
Then I was very fortunate in 1989. I received my first
SBA loan. With this loan I was able to go from a mom-and-pop
operation into a medium manufacturing plant. Now I have to
say, I'm a proud owner of a 64,000 square-foot plant
manufacturing in the city of -- California. I was able to
purchase this facility from Baskin-Robins two years ago and
they have given me great credit terms. I currently employ
over 100 people and distribute our company products around
the country. They are sold in both the Hispanic market and
general markets. We also export to Mexico and other
countries.
Obviously, this achievement gives me great satisfaction,
but I could not have done it without my hard-working team of
employees, associated brokers, suppliers, distributors,
financial institutions, and, of course, the support of our
loyal customers that believe in my company.
We have a great future, of course, but we have great
challenges too. Some of the obstacles that I believe small
businesses like mine have, regardless of the steps followed
are -- I'm going to concentrate on two today. First, the
business motto that most retailers use is funded in large
percentage by slotting allowance charges to manufacturers.
And this makes it a little bit difficult (sic) our business.
What this means is, a marketing money that manufactures need
to pay in advance to the retailer in order to do business.
I understand this is very important, however, it make
(sic) sometimes difficult, if not impossible, for small
businesses owners to be able to finance the cash-flow needs
that these charge causes in a fast-growing small company like
mine.
For example, if I had the opportunity to sell our
assorted gelatin desserts with our premium baked flan
products in supermarkets -- in about ten supermarket chains
at about $20,000 charges on slotting allowance per item, and
if I have ten items of group per chain, I would -- it would
certainly be a great opportunity for us. However, for my
company to be able to place these products, I require an
up-front disbursement of about $2 million in slotting
charges.
First, imagine how many years I'd need to wait in order
to start making some profit. Secondly, this represents
almost an impossible goal to achieve; because it is
impossible for a small company like mine to finance this type
of cash-flow requirements. The result is we can't grow (sic)
fast as we can.
I would recommend that we work together. The intent is
to launch industry standards of excellence for creating
profitable partnerships between key industry-sector
corporations, financial institutions, and minority businesses
to be able to come out with a solution to this issue.
The next issue that I would like to talk today is about
international trade. And I'm very, very excited, first of
all, of what's happening with the trade promotion authority.
And I congratulate this administration on working on this
approval. And this in turn will boost the local economies in
all 50 states, provide jobs for millions of Americans whose
work depend on exports.
I would like to say also that timing for women and
minority entrepreneurs to get out of their own -- transition
from local, regional, or niche market players to global
market players has never been better. I would like to
encourage the small manufacturers to change their mentality
and to make a more global outlook. Exporting products can
add more revenues to small businesses. I have done it for
many years and it works.
Yes, I have made a lot of mistakes. I don't know it
all. I tried to do it myself. However, there are many
programs out there willing to assist. For instance, the US
commercial service, from the department of commerce, the New
Port office in California found me and they offered their
products and expertise. Market research technitians are good
and export/import bank (sic) can assist companies with an
assurance to guarantee the collection of your goods.
My recommendation in export development is the -- that
practical education to small businesses be provided in the
field and be conducted by industry experts. Educating
companies on the export process can be help boost their
skills and create jobs. The small and mid-sized businesses
can find a niche to exporting.
Also, in order to grow a business, the next single
greatest challenge to minority and women in business is the
lack of access to capital. Largely because of the lack of
access to financing in general and specifically to equity
capital, the small companies are still mistakenly viewed as
high-risk investments. Access to capital is the number one
traditional barrier to ensuring growth and success among all
small businesses.
One more thing that I would like to mention is that
Lulu's Desserts has just signed an agreement with the Indiana
soybean industry. We're going to introduce our first soybean
product and gelatin dessert. And we're going to start a new
market in the health food industry.
So this is a great honor to be here. And I would like
to say that small businesses are working very, very hard to
support President Bush. And thank you for being here.
Munchas Gracias, Mr. Vice President.
VICE PRESIDENT CHENEY: Thank you.
AMBASSADOR ZOELLICK: Every time I talk to Maria, it
makes me a little hungry.
(Laughter.)
AMBASSADOR ZOELLICK: She promised samples for all of
us. So now we have covered some desserts and farming and
manufacturing. And we have somebody here from the software
industry I want to come to. But I want to talk to you a
little bit, again, on the import side. And Leytrice Henson
has been working for Proctor & Gamble on this. Do you want
to comment on this?
MS. HENSON: Yes, Proctor & Gamble markets in over 250
-- as a matter of fact, I think, 240 countries.
AMBASSADOR ZOELLICK: Microphone.
MS. HENSON: I'll start over. Proctor & Gamble markets
over 250 grains in over 140 countries. As a matter of fact,
we have on-ground operations over in about 70 countries.
Nearly half of our employees -- half of our employees, which
we have 106,000 employees, about 50,000 are those US based.
Now we see the trend is about half of us are involved in some
aspect of global workings of the company.
As we look at what has happened to us in terms of our
revenue, over the last 12 years, we have seen about a 75%
increase in revenues due to our call it exposure to
international markets. And about 55% of our total revenues
are generated outside the United States.
So as we look at it at Proctor & Gamble, it is important
that our leadership in globalization, that we stay out in
front. Because our competitors are not waiting for us.
Whether they're internal competitors or external competitors,
if we don't stay out in front of it, we're actually going to
lose the game. So it's very important that we play on this
field.
AMBASSADOR ZOELLICK: As a number of people have
mentioned too, whether you're a big operation or a small one,
one of the benefits of trade is lower-priced goods for
families.
MS. HENSON: Right.
AMBASSADOR ZOELLICK: And we all worked hard in terms
of tax cuts, but if you actually look at the benefit for the
average American family of four, under the North American
Free Trade Agreement, due to lower prices for goods coming in
and add to the income is about $1,300 to $2,000 a year for a
family or four. And, frankly, the global round we just
discussed, if we could just cut those global barriers
one-third, we'd add another $2,500 to that. So that's real
savings for people around the world.
I wanted to come to Mr. Bentley to talk a little bit
about the software. You started your company in the 80's and
you have been global pretty much early on.
MR. BENTLEY: Bentley Systems provides engineering
software for physical infrastructure, the roadways, and the
plants, utility networks, and so forth. After being founded
by my four brothers in the 80's, we have grown to be the
largest company in the world dedicated to that. I think the
most successful. We added 1,000 employees of our -- over the
past seven years and half of those are high-paying job in the
US. And we continue to grow even in these times. That's
because half of our revenues are from overseas. And I might
say this year, it's the larger half, if you like. And that's
actually characteristic of our industry. Packaged software
is an unsung tremendous trade surplus tangent for the US
economy. In fact, our preliminary figures are that our
packaged software industries trade surplus alone has grown
from about $13 billion of surplus in '97 to about $24 billion
in 2000, the latest year for which there's any figures. And
that's larger even than agriculture. That's just an example
of the significance of that and hear a credit for the
favorable trade regime that softwares enjoy thanks to the
work of Ambassador Zoellick and his predecessors.
China is already the 5th largest market for our company,
for new licenses of our software in just three or four years.
It's grown to that significance. Now while we have enjoyed a
favorable trade regime in software, of course, the digital
economy has evolved. We never can rest. By now, for our
company, almost all of our software is downloaded. There is
no physical deliverable. And there are new tariff threats on
that new means of delivery. And I know that the
administration will do what it can to continue the lead in
having the digital economy be an example of growth through
moderation in tariffs and regulation in general.
In fact, beyond the -- kind of the larger picture of
benefit to trade in our company and our industry, I
congratulate the administration for starting to get the word
out on the benefits. And today's the start of two-way trade
for the US at large. And, especially, as we face other parts
of the world where despair that can be overcome with the
seeds -- I don't believe -- of our US thinking can start to
make global progress there. I, in particular, think that
this is a great time even from the technology industry, where
expectations have been brought to reality. A great time to
recognize that investment precedes returns and a great time
to rally around trade as a means for all of our industries to
revitalize our growth and the industry -- software.
AMBASSADOR ZOELLICK: Thank you. I understand, Mr. Vice
President, you have got a couple of other sessions. So you
better go to those. I want to thank you. You're welcome to
stay, if you'd like, since you're the boss.
VICE PRESIDENT CHENEY: No, I'm not the boss.
(Laughter.)
VICE PRESIDENT CHENEY: But I look forward to seeing
y'all again, hopefully, together. Thanks again for being
here this morning.
(Vice President Cheney exits the forum.)
|