McClintock calls for elimination of trade barriers between Puerto Rico and US mainland

Honorable Kenneth D. McClintock

Secretary of State of Puerto Rico

 Welcoming Remarks

Domestic Trade Roundtable Summit 2012

Puerto Rican Chamber of Commerce of Florida

Ponce, Puerto Rico

March 29, 2012

First, I would like to thank Elizabeth Cuevas-Neunder, Founder and CEO of the Puerto Rican Chamber of Commerce of Florida for having invited me to appear before you this evening. I am honored by the invitation and quite pleased to see among you so many friends…

Congratulations are also in order to Elizabeth who has done such a great job in developing the Chamber into an important tool for opening and developing trade between Florida and Puerto Rico.

Judging from the approximately 850,000 Puerto Ricans living in Florida one could say that the island is colonizing the American peninsula… and who could be surprised if, after all, Florida and the United States was discovered by a Puerto Rican…

I guess that chapter was not included in your history book… But I am speaking, of course, of Juan Ponce De León who, while being Governor of Puerto Rico, set out from the Island an expedition in search for the Fountain of Youth.

            To those of you who are looking at me in disbelief, you are right… Ponce De León was born in Spain, just as I was born in London. But… should place of birth disqualify Ponce De León or McClintock as a Puerto Rican? Of course not! He was, after all, the first Governor of Puerto Rico as I am its 22nd Secretary of State…

Not convinced? Think of California… Of the 38 governors of California, 29 were born in other states and two were born in Europe… Who would say that Arnold Schwarzenegger is not a “real citizen” of “Cahl-ifoh-nia”?

            There you have it… a historical tidbit that you may not have known about Florida and that you can proudly pass to your friends and business partners when you return home.

            When I address business and professional organizations that visit the Island, I usually extoll on the many attributes that make Puerto Rico such a great place to invest and do business... in sum, on why Puerto Rico Does it Better. But I was to do that with you, I would be preaching to the choir.

            One of the key reasons why the Puerto Rico consumer market is so attractive to Florida businesses is that Puerto Rico is the only U.S. territory which is included in the customs area of the United States together with the 50 States of the Union and the District of Columbia.

            There is, however, a barrier to the free flow of trade between Puerto Rico and the rest of the United States which hurts both Florida and Puerto Rico. And that is the requirement of filing Electronic Export Information (EEI) —previously known as the Shipper’s Export Declaration— for shipments between the States and Puerto Rico which is contained in the Foreign Trade Statistics Regulations (FTSR) and administered by the U.S. Census Bureau.

Inasmuch as commerce between Puerto Rico and the States is interstate rather than foreign commerce, it is unwarranted to impose a requirement that is designed to enable the Census Bureau to compile foreign trade statistics and various federal agencies to enforce laws relating to exporting. Moreover, continuing to impose the EEI requirement would make Puerto Rico’s participation in the U.S. Customs area and the application of the Constitution’s Commerce Clause to Puerto Rico virtually meaningless.

Among the key purposes of the Commerce Clause is to promote an American common market system and thereby foster economic growth. However, requiring EEI filings is tantamount to placing a boundary that separates Puerto Rico from the rest of the nation to the detriment of the Islands’ economic well-being.

Complying with that requirement not only adds a cost that increases the price of many goods, but also imposes an unnecessary burden on interstate commerce that restricts the flow of trade within the U.S.

The EEI barrier also impedes some businesses —particularly, shipping companies— from affording Puerto Rico shipping rates that are comparable to those offered for other U.S. destinations.

Moreover, consumers in Puerto Rico should be entitled to receive from the businesses that benefit from the American common market —including the protection provided by the Commerce Clause against discrimination by States— the same treatment as consumers in the States and D.C.

            By means of your participation in the election of the President and your representation in the House and the Senate, as residents of Florida you have the means to influence federal policy-making in ways that are not available to the American citizens of Puerto Rico.

            My plea to you this evening is that you exert that influence so that the U.S. Commerce Department takes the necessary steps to amend the Foreign Trade Statistics Regulations so that EEI is no longer required for goods shipped between the States and Puerto Rico.

            Trade is not a zero-sum game… It is a win-win relationship were both parties to a transaction benefit. And by doing away with the EEI requirement for shipments to the Island, both Florida and Puerto Rico will benefit.

Thank you very much.