Notes from Meeting w/U.S. Secretary of Commerce, Carlos M. Gutierrez

I was honored to be invited to join a small group of San Diego business leaders in meeting for an hour with Secretary Gutierrez.  As Secretary of Commerce, he is responsible for overseeing a vast department with 38,000 employees, a $6.5 billion budget, and serves as the voice of business in the Bush Administration.

He spoke for about 15 minutes and then opened the floor to questions.  Major topics and his general response included:

Border Infrastructure: Chamber President Ruben Barrales described the variety of efforts underway at the border to provide security and enhance efficiency; including the third border crossing at Otay Mesa East, and a proposal to create a bridge between the U.S. and Mexico's Rodriguez Field to allow passengers to park on the U.S. side of the border and access international flights from Mexico without having to deal with the delays associated with the border crossing.  Secretary Gutierrez seconded the need for enhanced infrastructure and efficiency while protecting the security of U.S. citizens.

NAFTA and Trade Agreements: There is no question that NAFTA has been of great benefit to the U.S., Canada, and Mexico.  Trade is now at $1 trillion between the three countries, and over the 14 years since its enactment, U.S. GDP growth has averaged 3% (whereas it was 2% in the prior 14 years), Unemployment has averaged 5% (whereas it was 7% in the previous period), and all three economies have grown by 50% during that time.  He was clear to state that this good news has also come with readjustment for some industries - he mentioned specifically corn and bean growers in Mexico, and sugar growers in the U.S. as being subject to a changing environment due to the recent reduction in trade barriers, but their specific struggle should not discount the overwhelming success of the agreement.

He went on to say that the Columbia Free Trade Agreement has stalled in Congress because, for the first time in at many many years, the Speaker of the House has changed the rules to deny a vote on the floor.  For the last 16 years Columbia has experienced tariff free access to the U.S. and this agreement would create a reciprocation - meaning that the U.S. would be the big winner in this round.

Patent Reform:  Legislation has been working it's way through Congress, but is currently stalled in the Senate that would dramatically improve the patent process and creates a compromise on infringement award settlements that attempts to right-size those settlements to appropriate levels, while ensuring that intellectual property rights are appropriately maintained.  This conversation confirms some inside information that TGG Capital received just last week from one of the Patent Advisory Board members when he was meeting in our office regarding a possible Outsourced CFO project.

Oil and Energy:  The Secretary expressed frustration with the demand and supply problem we exacerbate by conflicting policies; with consumers paying the price at the gas pump.  We encourage alternative energy, but solar tax credits are irregular and are now set to expire, we have proven oil reserves in ANWR but we don't have the will to extract it, we haven't permitted an oil refinery in 30 years, we haven't permitted a nuclear facility in 30 years, we can't get the nuclear waste storage facility off the ground, etc.  He commented that ethanol production from corn has contributed about 3% of the 43% rise in the commodity price and described the Administration's drive to generate ethanol from non-food sources as a means to ease that pricing pressure.

Aqua Culture:  The Secretary oversees NASA and NOAA, with big research dollar implication in San Diego due to the Scripps Research Institute, the aerospace industry, and our partnership with the U.S. Military.  One item raised by the President of Hubbs-Sea World research institute was their proposal to develop an off-shore aqua-culture program designed to meet the Secretary's call for increasing our production of seafood to meet demand without further exacerbating the world's fisheries.  A delicate balance that aqua-culture programs such as Hubbs' is designed to meet.

Although our time with the Secretary was limited, it was a good opportunity to provide our direct input to the highest levels of government.  I look forward to the next opportunity to meet with our leadership and will continue to provide feedback regarding issues that are of concern to us at the local, state, and federal level.

-- Greg