Commerce Secretary Penny Pritzker is emceeing the first-ever SelectUSA summit today and Friday to woo more foreign companies to set up shop in the United States and encourage U.S. companies to expand here instead of overseas. My colleague Howard Schneider and I sat down with Pritzker to talk about the administration's strategy in this effort. Below is a lightly edited version of our interview.
Wonkblog: The administration has been really focused on export strategy lately. Is this a shift away from that?
Penny Pritzker: I think it's in addition. I don't think it's taking away. This is equally important.
WB: In terms of foreign direct investment, it seems like everyone's here already. Who's not here? What are your targets?
PP: It's everything from people who are in software businesses to chemical plants. And, what's amazing, we have 630 foreign-owned companies looking to invest at the summit, but we have 900-plus people on the wait list. The demand and the interest is extremely high.
WB: How much has the uncertainty and dysfunction in Washington hurt this effort?
PP: I was in Asia a couple weeks ago, and I met with a bunch of Asian CEOs. And they all have the long view. It's like Walmart. They're looking at the generational transition that's going on. They're not looking at this week or next week; they see the macro trend.
WB: Do you have any evidence that Americans care whether their goods are made in the USA, especially if they're more expensive? Is Commerce thinking about any sort of campaign to raise awareness about it?
PP: First of all, we're making the assumption that businesses are locating here because it's good business. We're not making the assumption that they're doing it for other reasons, like branding or something like that. There is an opportunity, you know. [Rep.] Steny Hoyer has his initiative, make it in America. Made in the USA, I think, has tremendous cachet and [is] something that should be marketed. But we believe that companies are making the decision to locate here because it's good to be closer to the customer, they want their manufacturing to be closer to their R&D, they like the low cost of energy and the abundance of energy. And innovation happens close to the customer.
WB: The U.S. has a very robust foreign commercial service already. Are they supposed to be doing more, or what?
PP: First of all, we're making FDI a core priority of our foreign commercial service and our ambassadors, which means they're going to be judged based upon not just exports but also how well they do in terms of promoting foreign direct investment. Second is, to do that, we've created coordinated teams in our top 32 priority markets. Number three, we've told -- what the president will announce -- is states and cities know they can call the administration and say we need your support. And just the way we advocate on behalf of exports, we're going to bring the same intensity to if you're a city or a state and you need help getting a foreign company to your place. We can't pick one over another, but if they're considering us and another country, we're all in to help you. And then fourth, there'll be a single point of contact. We're going to hold somebody responsible for each of these customers, if you will, these companies. So the news is, we're really focused on this, and we're operationalizing.
WB: The big companies don't really need that kind of help, though. Is this about moving down the supply chain to those smaller companies?
PP: Absolutely. Its all of the above. It's the large multinational that's looking into where they're going to put their next means of production to service their global marketplace. It's also their supply chain. It's the small to medium-sized enterprise that needs greater assistance.
WB: The president is on the record supporting a long-overdue increase in the minimum wage. Labor costs are a factor in where companies choose where to invest. Has the idea of hiking wages complicated this discussion at all?
PP: I have not heard one business tell me that's an issue. So I don't have evidence of that.
WB: Is there a tension between taking down tariffs on foreign goods, which will happen when trade agreements are signed in Europe and Asia, and promoting their production here at home?
PP: Look, I think our trade agreements will help to continue to expand this opportunity, because more and more what you get when you talk to even small businesses -- I was out with bicycle manufacturers in Portland, and they were so aware of the import and export rules. And I'm not talking about bicycle manufacturers who are doing tens of thousands of bicycles. I'm talking about the ones who are building a custom bicycle, or 100 bikes a year. Large and small business are very sensitive to trade and the trade relations. What I heard on my listening tour -- 350 CEOs -- the number one thing they wanted us to do was continue to pursue trade agreements around the world.
WB: Just returning to where the FDI is -- are you focusing on countries that aren't well invested here already?
PP: I'll just tell you who's here today. China, number one, Japan, India, Germany and Canada [are] at the summit. Whereas historically our stock of FDI is UK, Japan, Germany, Canada, France. So the point is, there's a lot of interest from parts of the world that don't have as large a stake in our foreign investment stock today.