Carlos Gutierrez hosts Ask the White House

Carlos Gutierrez
It's my pleasure to join you for the Ask the White House online forum to discuss President Bush's American Competitiveness Initiative.

In his State of the Union address President Bush reminded Americans that America's continued economic leadership will depend on new ideas and new ways of doing things.

President Bush's Competitiveness Initiative calls on us to increase our research and development efforts. At the Commerce Department we will be adding 600 new scientists at the National Institute of Standards and Technology to develop new technology that will help us lead and compete in the global economy.

The President's Competitiveness Initiative is an historic initiative that encourages Americans to grow and be the best competitors in the world. I'm happy to take your questions.

Karen, from Olney, Maryland writes:
I applaud the President's focus on stimulating American innovation, but can you elaborate on how the Department of Commerce - or the government, for that matter - should play a role in stimulating innovation?

Carlos Gutierrez
That's a great question, Karen. First we must keep in mind that America leads the world in innovation. Even though we only have five percent of the population, we employ nearly one-third of all scientists and engineers and account for one-third of global R&D spending.

In his State of the Union address, the President announced the American Competitiveness Initiative that includes a $380 million proposal to improve math, science and technological education in our K-12 schools as well as a proposal to double the investment in key federal research agencies. The Department of Commerce will play its part in this initiative by adding an additional 600 researchers at the Nobel Prize winning National Institute of Standards and Technology.

Thomas, from Marshall writes:
Do you really think that America is still in it's strong position nowadays compared to even five years ago as it seems our position in the world is slipping with many turning their backs on america and adopting 'anti american' sentiment.

Carlos Gutierrez
Thomas, thanks for the question. There is no doubt in my mind that America is the global leader in innovation, job creation and economic growth. In fact, on virtually every measure, the American economy continues to lead the world. For example, we have close to the highest GDP per capita in the world and our unemployment rate of 4.9% ranks among the lowest in the world. And, we are deeply engaged in the world economy as the world.s leading exporter of goods and services. Despite this success, we are beginning to see new competitors like China and India, which is why the President announced a bold vision in his State of the Union address to compete with confidence.

roger, from michigan writes:
i work for a major manufacturer in michigan and i am concerned that the bosses that run our plant and company are going to be caught flat footed when they realize that our company is not growing because we have not come up with new ideas or thought of ways to do our job better. i don't want to be perceived as a trouble maker but i think competition is going to get tougher. what can i do to help my company?

Carlos Gutierrez
This is a great question. I think every employee and employer should be asking themselves what they can do to be more competitive and innovative. We are living in a period of time where change is constant. If businesses are not adapting their business plans to the needs of their consumers, their competitors will jump in and fill that demand.

Cliff, from Brimfield, Ohio writes:
Secretary Gutierrez: What part does trade deficets play on the world economy. Not just ours but all nations? Thank You

Carlos Gutierrez
Cliff, let me put the trade deficit in perspective. Part of what drives a trade deficit is the difference in economic growth rates between countries. Our economy grew at 3.5 % last year, which is about twice the rate of the European Union and over a percentage point higher than Japan. This means that U.S. consumers are in a stronger position to buy goods and services from overseas than are consumers in other countries.

So, part of what we need to do to address our trade deficit is to ensure that other countries take steps to increase the growth rate of their economies and open their markets to American exporters.

The trade deficit is not the most important number. There are other economic indicators such as GDP growth, unemployment, inflation and productivity that measure the true health of an economy. I am proud to say that under these measures, we are doing well, but we should never be complacent.

Nic, from PRC writes:
Dear Sir,Thank you for your time. Do you think that China will pose a serious threat to America's ecomnomic growth/competitiveness in the next few decades? If so, how is America responding? Respectfully, Nic

China's economic growth has certainly had a global impact and we focus a great deal of attention on our relationship with China. At the Department of Commerce, we are focused on expanding market access for American workers, businesses and farmers, and creating a level playing field in our trade with China.

One area of critical importance to our competitiveness is the protection of intellectual property rights. American companies lose billions of dollars each year because of piracy and counterfeiting in China where infringement levels are estimated at 90 percent or above for virtually every form of intellectual property.

We meet frequently with Chinese government officials to address major trade concerns like this one. We will continue to engage China and urge them to comply with their WTO commitments.

William, from Kentucky writes:
Why have we not invested more in the Americas. We seem to have put all of our eggs in one basket, China. I feel like we are using our jobs as a chess piece in the world of foreign policy, not competitiveness. We should be heavely invested in Mexico. I personally feel they should be a part of the United States.

While many companies are focused on opportunities in China, far more U.S. trade and investment currently occurs in the Americas each year. For example, in 2004 the U.S. exported more than $110 billion in goods to Mexico compared to less than $35 billion to China. The North American Free Trade Agreement (NAFTA) has been incredibly successful for American companies and we are building upon that success.

Keeping America competitive requires us to open more markets for American goods and services. We are pursuing an aggressive international trade agenda that will help create jobs and opportunity at home by eliminating or reducing tariffs and barriers abroad.

Since the President took office in 2001, we have negotiated Free Trade Agreements with several countries in the Americas, including Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Peru. We are also negotiating Free Trade Agreements with Colombia and Panama. All of these agreements will help our competitiveness by allowing America.s businesses, workers and farmers to compete on a level playing field.

Winfield, from Greenbelt Maryland writes:
I was pleased to see the President talk about the importance of innovation to the U.S. economy. What is the federal government doing to encourage and fund the development of innovative technologies? How do inventors ans small businesses submit proposals to federal agencies?

Carlos Gutierrez
I agree with you Winfield. The President continues to show bold leadership and discuss new ways America can compete and be the best competitor.

Many are not aware, but the federal government provides approximately one-third of the R&D funds in the U.S. and is focused on the basic research that industry cannot do. The private sector provides the remaining two thirds and is focused on R&D that will translate into new innovations, products and services for the American people.

The American Competitiveness Initiative announced by President Bush proposes to double over ten years the funding for key federal research agencies. And, to encourage bolder private sector R&D, the President supports making the R&D tax credit permanent. There are a variety of mechanisms for inventors and small businesses to use in engaging with the federal government on research projects. You can learn more about these opportunities by visiting the National Institute of Standards and Technology website at www.nist.gov.

richard, from washington dc writes:
with jobs silghty going up. should our economy go up?

Carlos Gutierrez
Richard, our economy is strong and it is moving in the right direction. However, in order to maintain our economic expansion we need to make the President's tax cuts permanent. The administration is committed to working hard to create the economic conditions that will encourage businesses to expand, invest in new equipment and hire new employees. The right economic environment will translate into more opportunities and prosperity in America.

Charles, from Alpharetta, Georgia writes:
What exactly does the secretary of commerce do in the Whitehouse? Do you get to see the President a lot whenever he is in the Whitehouse?

Carlos Gutierrez
Interesting question, Charles. As a member of President Bush's cabinet, I have the honor and privilege of working closely with the President in helping him advance his agenda for a strong economy. A big part of that is meeting with him frequently either at cabinet meetings at the White House or other events across the country to discuss the progress that is being made in fulfilling these goals. We are very fortunate to have such a strong and focused leader as our President.

Burke, from Thornburg writes:
Prior to NAFTA being approved, they (who ever) said that wages over a generations between Canada, Mexico, and the US, will tend to equalize.Is this true to what extent, or not true. I can see how our US inflation rate is low as a preliminary affect. Any thoughts?

Carlos Gutierrez
Burke, the success of NAFTA is a great illustration of how trade benefits America and its trading partners, and why it is so important that we continue pursuing opportunities to knock down trade barriers that discourage economic growth, job creation, and hold millions of people in poverty.

All three NAFTA countries have seen significant economic benefits. The GDP of all three countries has grown more than 30 percent since NAFTA went into effect. Our trade with each other has also grown at an astonishing pace. Our exports to Canada and Mexico have grown by 89 percent and 167 percent respectively.

Jason, from Cleveland, Ohio writes:
Mr. Gutierrez:President Bush stated in the Address on Tuesday that immigration is good for business and the economy. I can't figure out why this is. You would think that an increase of immigrant workers would flood the limited amount of jobs America has. Could you shed some light on why immigration is good for the economy and commerce in general? Thanks.

President Bush has been clear - any immigration reform must address border security, focus on interior enforcement, and the economic reality that there are jobs out there that Americans are not willing to accept.

The President has proposed the creation of a Temporary Worker Program. When no American worker is available and willing to take a job, the program should provide a labor supply for American employers.

Immigration is also important to America's competitiveness. In his State of the Union address the President talked about attracting the best and the brightest to America. In America we recognize that immigration has brought new ideas and new innovations that have made America the best place to work and do business.

Michael, from Virginia Beach, VA. writes:
Why wasn't tax simplification, or rather, The Fair Tax brought up in the State of the Union address? The would give our economycommerce an immense shot in the arm. Please address how this bill will help US Commerce and why it is needed. Greenspan was even on board with this....

The President has called for a tax code that is simpler and fairer. In addition, he noted in the State of the Union that the $880 billion in tax relief provided to the American people in the last year has produced four years of uninterrupted economic growth. However, tax relief is set to expire in the next few years and if Congress does nothing, American families will face a massive tax increase.