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Chamber of Commerce AGM

May 17, 2012


Good afternoon, and thank you for that warm welcome.  I am so pleased to be here today, and would like to thank Buddy Rego and Joanne MacPhee for their kind invitation. 

I’d like to acknowledge and welcome Minister of Business Development and Tourism Wayne Furbert and Minister of Economy, Trade and Industry Patrice Minors, as well as Shadow Finance Minister Bob Richards.  It’s great to see so many familiar faces in the audience too.

I’d like to speak with y’all about diplomacy in the 21st century, specifically how economic diplomacy has become front-burner.

As the United States’ representative in Bermuda, I’d like to say again that the U.S.-Bermuda relationship is a positive one of long standing.  As you all know, in the 17th century, Bermuda was there for the struggling colonial settlement of Jamestown, Virginia, which was desperately in need of sustenance.  By the end of Bermuda’s first decade, islanders had become dependent on trade with their thriving Virginia neighbors. 

Today, the United States continues to be Bermuda’s primary trading partner – accounting for over 70% of Bermuda’s imports, and we appreciate that you look to the United States when choosing your goods and services.

Americans have also always been Bermuda’s number one source of tourists.  We were instrumental in the birth of Bermuda’s tourism industry in the 20th century.  Simultaneously, Bermuda became central to the Anglo-American defense partnership through two World Wars and the ensuing Cold War.

Successful Anglo-American defense cooperation throughout the 20th  century helped the U.S. and the West, while the airport that the U.S. Navy built, with its connections to U.S. cities, also helped Bermuda develop tourism and a thriving financial services sector. 

Today, the island’s world-class reinsurance industry provides coverage for approximately 40 percent of U.S. natural disasters, catastrophic events, and crop damage.  Like the rest of the world, when disaster strikes, American homeowners, businesses, and farmers rely upon Bermuda when it comes to insurance and reinsurance.

As you can see, the relationship is symbiotic, and the aim of diplomacy as the 21st century unfolds is not to keep the status quo, but to build even stronger ties. 

U.S. foreign policy seeks the security and prosperity of the American people.  We have a multi-pronged approach and a key element is the deepening of relationships with our closest allies, who share common values and interests and who seek to solve collective challenges with us.  That is just what we have been doing here in Bermuda. We’re working on it every day.

Now I’d like to focus my comments on economic statecraft, which has become a more important component of diplomacy.  It’s been around for a long time, witness the tax information exchange treaty signed between Bermuda and the U.S. in 1986 that laid the foundation for Bermuda’s international business sector to thrive. 

And even before that, in the wake of the economic crisis that broke out in the early seventies, the main industrialized democracies decided to hold a top-level meeting to exchange views on the measures that might be adopted to handle the serious economic and financial situation. That first meeting, which was thereafter to take place every year, was held in 1975.  Tomorrow President Obama will host the next meeting of the G8 at Camp David.

Decades ago President Harry Truman said that "Our relations, foreign and economic, are indivisible."  Those words are as true in today’s world as they were in Truman's time, but we have updated our approach.  I think economic statecraft is a topical subject because, like the United States and other nations of the world, Bermuda faces economic challenges and is taking steps to address them. 

If you look at foreign policy in today’s world, there are obviously a number of traditional strategic issues - like nonproliferation, Iran, Iraq, Afghanistan, and North Korea - but what is increasingly clear is that economic issues are more important on the international agenda than ever before.  And solving them requires that we all work together.

President Obama said, “As the world has become less divided, it has become more interconnected. And we've seen events move faster than our ability to control them – a global economy in crisis, a changing climate, the persistent dangers of old conflicts, new threats and the spread of catastrophic weapons.  None of these challenges can be solved quickly or easily. But all of them demand that we listen to one another and work together; that we focus on our common interests, not on occasional differences; and that we reaffirm our shared values, which are stronger than any force that could drive us apart.”

The U.S.-Bermuda relationship is a case in point.  Shared values and language – a product of geography and history – have created a strong bond between the U.S. and Bermuda on many levels that allows us to work together.  Law enforcement is one area of cooperation.  Commerce is another: American and Bermudian business people share similar concerns and goals about employment, sustainability, and growth in these tough economic times.

In the United States, the State Department has fine-tuned the way we work to respond to a changing world.  Diplomacy traditionally involved negotiating treaties, alliances, or other agreements, but now – in the face of current challenges – we are looking at our job anew. 

As my boss, Secretary of State Clinton, put it, “To lead in this new century, we must often lead in new ways.”

One of those ways is to prioritize economic diplomacy.  I think the emphasis on economics in dealing with other nations has parallels in what the Government of Bermuda is doing.

Economic diplomacy is a major priority for the State Department because America’s economic strength and our global leadership are a package deal; there’s no having one without the other.

The modern doctrine of economic statecraft for U.S. foreign policy recognizes that the nature of America's challenges at home and abroad demands a serious and sustained commitment to put economics at the center of our foreign policy agenda.  Secretary Clinton said, “Our problems have never respected dividing lines between global economics and international diplomacy.  And neither can our solutions.”  As entrepreneurs and business folk, I think you will understand and agree with that statement.

U.S. foreign policy must address a world in which economic concerns and economic power cannot be separated from traditional political and strategic imperatives.

During much of the last decade, American foreign policy was intensely focused on places where the threats to the U.S. were the greatest.

Today, we must focus equally on the places where our growth prospects are the greatest.  In every choice we make, we must ask ourselves how our decisions impact U.S. economic growth and America's ability to project economic influence abroad.

Simply put, a core diplomatic mission is to assist America’s economic renewal and to enhance U.S. economic leadership in the world.  Diplomats must harness markets and global economic forces to advance U.S. strategic and political goals. 

Within the State Department, leaders from the different substantive areas are incorporating economic statecraft priorities into their international travel.  I’ll give you a couple of examples. 

ü  Demonstrating how economic tools can support regional strategic objectives, Marc Grossman, our Special Envoy to Afghanistan and Pakistan, used his travel to 10 countries in Europe and South and Central Asia to solicit support for the New Silk Road vision for private sector-led investment and development in Afghanistan and surrounding countries.  In meetings with government ministers and in press statements, he promoted private sector investment as a critical part of reconstruction and stabilization.

ü  In another example, the highest person at the State Department who deals with non-immigrant visas, immigrant visas, and American citizen issues, recently flew to India to address these consular issues.  While she was there, she also engaged the business community, underscoring U.S. efforts to increase trade by facilitating tourist and business travel. 

Making the U.S. a top tourist destination offers a tremendous opportunity to create jobs and strengthen the U.S. economy.  Recognizing this, President Obama issued an executive order in January to improve travel promotion and improve visa and foreign visitor processing in line with protecting our national security.  He noted that the travel and tourism industry is one of the U.S.’s leading service sectors and sources of exports.  
The State Department has found that there is a direct link between visas issued for travel to the United States and job creation in the U.S.  Sixty million visitors entered the U.S. in 2010, supporting 1.1 million jobs.  35% of those visitors entered on visas, supporting 385,000 jobs.


Bermuda also recognizes the role tourism plays in stimulating the economy, with the tourist industry and associated businesses – including many members of the Chamber of Commerce – hard at work.

Whether it’s the United States, Bermuda, or any other nation, power in the 21st century depends on what that country grows, makes, innovates, and sells.  

America’s economic renewal depends to a large degree on the strength of the global economy, and the global economy, including Bermuda’s, depends on the strength of America.  Ensuring economic strength at home is the source of our strength abroad.  Moreover, it is important to the global economy.

The U.S. government fundamentally believes that increasing trade and prosperity will benefit not just Americans, but people everywhere. Our economies are interdependent as never before, and so are our fates.

If our economies are prosperous and dynamic, we are able to invest more resources in our own people.  A vibrant private sector and strong economic ties with our partners are good for business and good for the community, a theory that y’all as business people understand.

The engine of any society, especially a democratic society, is how it provides the means for its people to earn a living, for people to make a profit, for people to put in place their ingenuity, their initiatives, their entrepreneurial spirit and create businesses and trade opportunities.  I know that’s something that all of you here at the Chamber of Commerce could agree with and are interested in doing.  

The United States believes that strong economic relationships in our neighborhood – and that includes Bermuda – are a strategic necessity.  And we know that sustainable, inclusive economic growth in the region will benefit us all.  Geography matters.

Now, the difference between a great idea that stays an idea and one that’s actually implemented and yields results has a lot to do with people-to-people ties. And we are working to foster connections between the people of Bermuda and the United States so we can all find more ways to work together and to seek common ground and common solutions.

A good example of economic diplomacy in action was this year’s Voluntary Visitor exchange on entrepreneurship that the State Department organized and funded in February for 6 Bermudians from the public and private sectors – including Nicole Warren, one of your directors.  Premier Cox had requested that the exchange focus on entrepreneurship as she, like President Obama, understands the importance of entrepreneurship in promoting economic recovery and growth.

During the exchange, the Voluntary Visitor team met with representatives from different model entrepreneurship programs.  They looked at mixed use facilities, a waterfront center, the role of the arts in economic development, festival planning, the financing of “green” initiatives, and incubators.  The team is drawing up recommendations on how entrepreneurs can help stimulate Bermuda’s economic recovery. 

The trip, an excellent networking opportunity, was a chance for a mutual exchange of ideas between Americans and Bermudians. 

We’re also excited about another new U.S.-Bermuda joint venture that got off the ground last week.  Cisco Academy is a global education program headquartered in California that will provide certified training for Bermudians in Information Technology.  This should give young Bermudians access to career and economic opportunities.  Cisco will help to create the economy of the future, and our two governments are eager to see this effort succeed.

The State Department is committed to promoting the export of goods, services, and ideas such as the Cisco Academy.  We want to modernize the way we connect American companies with opportunities overseas; to break down barriers to trade, investment, and fair competition; and to make sure that our presence around the world drives our economic recovery at home.

Embassies and Consulates around the world are focused on helping U.S. companies do business abroad while at the same time attracting foreign investment to the U.S.

Recognizing that every $1 billion of goods the U.S. exports supports more than 5,000 jobs at home – even more in industries like aerospace and telecommunications - we seek to double U.S. exports by helping American firms expand sales of their goods and services abroad.  One of the ways to do that is by opening up trade. 

By choosing American products and services, Bermuda’s wholesale and retail sector plays an important role in enabling U.S. exporters to serve the Bermuda market.  So thanks to all of you.

Many people think that large corporations and the government are the dominant drivers of economic growth, but there are many types of businesses that expand the economy and catalyze job creation.

One of them - “impact investing” - is an emerging sector of the economy, currently estimated to be a $50 billion industry globally.  

Impact investors seek both financial and social returns. They believe that business has an opportunity to create economic value and positive social  outcomes.  They often make debt or equity investments in organizations that address major societal challenges such as affordable housing, health care, or clean energy, while expecting a return on their invested capital. 

Green innovations, like solar power technology or wave power technology, which is currently being studied for Bermuda, can help stimulate economic development in a value-added way.

At the U.S. State Department, we seek to support the work of innovators that are contributing to an impact economy by developing and deploying cutting-edge business and financial models that generate financial returns and positive social and environmental change.

We also seek to defend values and laws that are fundamental to innovation—open discourse, freedom of expression, and intellectual property rights.  We work with foreign governments to encourage pursuit of sound innovation policies. In the past, for example, the Consulate has sent several Bermudians from the Ministry of Justice to the U.S. to study intellectual property rights in a program funded by the U.S. Patent and Trademark Office.

Looking forward, the protection and enforcement of intellectual property rights in support of global economic growth and innovation is key to our prosperity and that of our friends and allies around the world.  It is also central to our shared pursuit of better jobs, higher living standards, and upward mobility.

I feel like I cannot let this chance to speak with y’all go by without also mentioning the role of women in the global economy.  Secretary Clinton often emphasizes that for countries to truly develop their economies, they need to ensure that women in their societies reach their potential, particularly by having more economic opportunity and by removing constraints on their ability to start companies, move up the ranks and have upward mobility within companies, to obtain jobs, and generally to participate in economic growth.

Across the world, there are opportunities to open more markets and unleash the talents of people everywhere – women, men, and young people – to improve their own lives and the lives of their families and societies.  There are opportunities to drive economic growth in a way that provides prosperity broadly to as many people as possible.  The goal of economic statecraft is the creation of markets and the empowerment of people everywhere, which in turn will benefit both the U.S. and the global economy.

We can no longer rely solely on traditional forms of government-to-government diplomacy.  To create greater understanding in the 21st century, we must pursue innovative ideas through people-to-people diplomacy.  This includes companies, businesses, and entrepreneurs like you individually and organizations like the Chamber of Commerce. Often, the private sector or a private-public partnership is able to accomplish things that a government alone cannot.

You, the members of the Chamber, share the common goal of advancing the business interests of Bermuda, fostering the spirit of free enterprise, and providing networking opportunities within the business community.  This is right in line with the people to people diplomacy I was talking about.  All of you involved with the Chamber of Commerce can be a part of economic diplomacy in the 21st century.

Thank you for your kind attention.