Good afternoon. Thank you, Dr. Daboub, for inviting me to participate in the HUGE [Honduras, USA, Guatemala, El Salvador] Business and Investment Council annual meeting.
In response to Vice President Harris’s call to action, companies are drawing from their unique resources and expertise, committing to support inclusive economic growth in Central America. HUGE links the private sector in these countries and the United States. Supporting long-term development in northern Central America requires more than just U.S. government funding. As Under Secretary, I have met many HUGE member companies. I have seen your positive impact, both on the U.S. economy and in the region. We support your goal to mobilize $10 billion in investment to create 2 million new jobs over the next 5 years. We applaud your 10 new projects for $3.2 billion that will create over 200,000 jobs. I look forward to continuing to work with HUGE and its partners to advance our mutual goals.
I would like to discuss three key policy priorities today. First: investing in the region to strengthen critical supply chains. Second: leveraging private sector investments to advance good governance in the region. And third: labor protections.
The first key priority is to create economic opportunities closer to home while strengthening critical supply chains.
Building greater regional resilience and investing in supply chain diversification will make this hemisphere less vulnerable to global disruptions.
We’ve made progress to strengthen supply chains for health, food security, and technology in the region. The United States and Mexico created a supply chain working group focused on semiconductors and information communications technology. We’ve initiated bilateral supply chain consultations with Brazil; and we’ve worked alongside Costa Rica, Ecuador, the Dominican Republic, and Panama to form the U.S.-Alliance for Development in Democracy (ADD).
We need to plug Honduras, Guatemala, and El Salvador into broader supply chain initiatives so the region benefits from the nearshoring trend. Co-production by U.S. and Central American textile companies shows the potential benefits. About 82 percent of U.S. exports of spun yarn go to CAFTA-DR [Dominican Republic-Central America Free Trade Agreement] countries. Expanding co-production in Central America is important to jobs here at home too.
The second key priority is leveraging private investments to advance good governance.
We seek to catalyze private sector-led investment sustainably and transparently. This will strengthen democratic governance, human rights, and workforce development. Democratic backsliding, corruption, and poor rule of law puts Central America at a competitive disadvantage for external investments, economic growth, and talent retention. Nearshoring opportunities will land elsewhere if these troubling trends do not reverse quickly.
To address these challenges, we are:
- Working to put an end to anti-competitive practices and onerous tax policy.
- We aim to alleviate customs, transportation, and logistics bottlenecks that limit textile and apparel sectors.
- HUGE and our partners in government are exploring solutions for infrastructure and energy challenges.
And we need to develop the next generation work force. In August, I traveled to North Carolina for the launch of a workforce development initiative between North Carolina State, UNITEC, and the Honduran textile industry. This model could expand to El Salvador and Guatemala or for other sectors, including agribusiness.
The third key priority is labor protections. Although sometimes viewed as an impediment or potential detractor to growth, strong labor standards can play a critical role in increasing inclusive economic growth. From 2011-2019, Honduran apparel exports to the United States grew to about 2.8 billion dollars, the largest in the region. At the same time, the number of workers represented by independent unions grew to 40 percent, the highest in the world. Labor rights and growth can happen together. Both are integral to the U.S. Root Causes Strategy.
Let me conclude by thanking the HUGE Business and Investment Council for your commitment to inclusive economic growth, democratic governance, and partnership throughout the Americas.