Stefan M. Selig was firmly entrenched in his career as a top executive of Bank of America Merrill Lynch last fall when U.S. Commerce Secretary Penny Pritzker came calling with a job offer: She wanted him to head the International Trade Administration.
While at Bank of America, the mergers and acquisitions specialist advised corporate and private equity clients on more than $1 trillion worth of strategic global transactions.
Now the new undersecretary for international trade, who was sworn in on June 23, keeps his eye on trillions of dollars’ worth of U.S. exports of goods and services and is immersed in encouraging U.S. companies to export and helping to make sure they are competitive abroad.
It falls to him to build on President Barack Obama’s National Export Initiative with the new NEI/Next Initiative, which provides more information resources so American businesses can capitalize on opportunities to export their goods and services.
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Pritzker, who had worked with Selig when both were in private industry, said she tapped him because “he has the global experience, management skills and understanding of how to put deals together to ensure that we will be able to continue our critical work to expand trade and exports, grow our economy and create jobs.”
Selig was in Miami recently to speak at the Trade Americas Expo, where he emphasized the importance of the Americas to future U.S. economic growth.
“It doesn’t take long to realize that the United States’ commitment to trade-based growth is inseparable from its time-deepened relationship with the Western Hemisphere,” he said. “Overall, more than 45 percent of U.S. exports today go to the Americas. Our exports to the Americas are growing at a faster rate than our trade with the rest of the world.”
After his speech, Selig sat down with the Miami Herald to discuss his transition from investment banking to government service, his view of trade negotiations and his goals at the Commerce Department.
Q: Not many career investment bankers are in the Obama administration. What motivated you to make that leap?
A: One is that I truly hope that my private-sector experience can add value to my new role, to the Commerce Department and to the country. After all, we are the Department of Commerce, which is the business department.
Both the secretary and I come from a private-sector background, and our goal is to bring private-sector expertise into the department and build bridges to the business community in a way that maybe hadn’t been the focus earlier in this administration or in previous administrations.
Two, I had extraordinarily high regard for the secretary whom I had known as a client prior to her asking me to assume this role. The ability to be her primary adviser on trade and investment I found very appealing.
After all, I spent my career as an advisor and I’m really continuing in that role, and I’m advising two constituents: the secretary and the U.S. companies who want to grow their business. In fact, that’s exactly what an investment banker does but in a different context. The goals are exactly the same: how to make U.S. companies successful.
Q: When you left Bank of America, it was reported that you got a $9 million bonus. At the time, there was criticism that it posed a potential conflict of interest because you would be involved with free-trade agreements going forward that will touch on financial and corporate matters. What is your response to that?
A: It is inaccurate. The blogger that picked that up did not pick up the right information. I received a zero-dollar bonus in connection with my leaving Bank of America Merrill Lynch. It is categorically incorrect, and I made this testimony to the Senate Finance Committee.
Q: As you mentioned in your speech, there have been four straight years of record-setting U.S. export growth. But now that we’re in the fifth year of the administration’s National Export Initiative, whose goal was to double U.S. exports in five years, will that target be met?
A: The goal will not be reached. But exports have been a bright spot in the national economic recovery. A lot of things happened in that period of time that made the world economy a more challenging place. Obviously, the global economy recovered more slowly than anyone expected, given the depth and breadth of the downturn, so achieving those aggressive goals became difficult. But that being said, NEI has been a real important success in every respect.
Q: Recently, Brazil officially entered a recession. It is South Florida’s largest trading partner. How concerning is this slowdown in Brazil?
A: Brazil is obviously a large and important market for the United States and one of our largest trading partners — the ninth largest — despite not being a free-trade economy. But the good news is that while the Brazilian economy may be slowing, there are other economies in the region that are growing very quickly. The opportunity for us is to not only continue the important relationship with Brazil but to look to some of the other economies to continue growth in the region.
Q: As part of your portfolio, you’re the executive director of the Travel and Tourism Advisory Board. In practical terms, what does that mean? What is your role?
A: I was just at a meeting of the Travel and Tourism Advisory Board at the Mall of America in Minnesota. This is a presidential-appointed council that brings various members of the public and private sectors together. We had a long and important discussion about how to improve the visitor entry experience for travelers coming into the United States, including limiting wait times for arrivals.
The travel and tourism segment is an extraordinarily important part of our economy, the largest single sector of the service economy. Spurring travel and tourism is central to spurring our overall agenda at ITA of growing the economy through exports.
Q: Where do the negotiations on the Trans-Pacific Partnership stand?
A: There was a series of productive meetings in Ottawa July 3-12 and we made some good progress. Again, it’s hard to predict what the pace of those meetings will be, but there does seem to be some real positive momentum in those conversations.
Clearly, TPP is one of President Obama’s top goals for his trade agenda but also for this hemisphere in particular, given how many TPP countries are resident in the Western Hemisphere.
Q: Is there a time frame when the administration would hope to wind up negotiations?
A: The problem with that question is it’s not a unilateral decision. There are 11 people negotiating besides the United States. These are challenging and difficult negotiations. As I used to say when I was in the private sector doing complicated deals, ‘It’s like trying to put socks on an octopus.’
Q: Are there additional tools that are needed at this point to expand exports?
A: At this point I would say the only additional tool we need is trade promotion authority. That would significantly help our ability to address your last question about making progress toward a speedy, hopefully successful, negotiation of TPP and TTIP (the Transatlantic Trade and Investment Partnership).
Q: What are your goals in this job?
A: One goal is to have my boss be the most successful secretary of commerce in recent memory. Secondly, I run a large and important bureau with more than 2,100 people in 100 cities in the United States and over 70 countries. These folks are hard-working and talented and many have sacrificed to be in government service and make a difference for U.S. business. I want to do everything I can to empower them so they can be successful and to make sure their jobs are as rewarding as possible.
I also want to grow the economy and create jobs and create prosperity for our citizens. This was a diversion from my private sector career. I wouldn’t have done it if I wasn’t hopeful I could make a difference. And I guess 80 days into it, I’m still naive enough to think I can.
Follow Mimi Whitefield on Twitter: @HeraldMimi
STEFAN M. SELIG
Job: Undersecretary for International Trade, U.S. Department of Commerce.
Background: Served as executive vice chairman of global corporate & investment banking at Bank of America Merrill Lynch. A mergers and acquisitions specialist, he has worked on deals ranging from the sale of Yankee Candle and the initial public offering of Re/MAX to deals for L Brands, parent company of Victoria’s Secret and Bath & Body Works.
Other positions: vice chairman of global investment banking and global head of mergers and acquisitions at Banc of America Securities; various senior investment banking positions on Wall Street including co-head of mergers & acquisitions at UBS Securities. He began his investment banking career at The First Boston Corp. in 1984, and was an original member of Wasserstein Perella & Co.
Education: B.A. in economics from Wesleyan University; M.B.A. from Harvard Graduate School of Business Administration.
Boards: Former board member, Lincoln Center for the Performing Arts and Services for the UnderServed.
Family: Married to Heidi Selig, has a stepdaughter. He maintains a family residence in New York and lives in Washington, D.C., during the week. His mother lives in Boca Raton.