T-TIP – New Approaches to Security and Prosperity

Atlantik Brücke and the American Council on Germany
Berlin, September 11, 2015
Ambassador John B. Emerson

 

Thank you, Friedrich Merz.

Ambassador Kimmitt, I would like to thank the American Council on Germany and the Atlantik Brücke for organizing this conference.

And it’s a privilege to join such a distinguished panel to discuss the potential impact of the Transatlantic Trade and Investment Partnership agreement on not only transatlantic, but also global security and prosperity.

At this pivotal moment in time – exactly 14 years after 9/11 and almost 25 years after German reunification, Western values are being challenged.

The parameters of our world are increasingly complex.  Consider the challenges we face today – violent extremism, an evolving terrorist threat, Russia’s aggression toward the Ukraine, escalating cyber attacks, the accelerating impacts of climate change, the outbreak of infectious diseases, the current refugee crisis – the nature and diversity of the challenges we face have exponentially accelerated over the past 70 years.

As New York Times columnist Thomas Friedman has stated, we face a struggle between the world of order and the world of disorder.  Post-WWII institutions, such as the UN, NATO, the OSCE, were force multipliers, reflecting a vision of peace, freedom and prosperity.  But just as our world has changed; so, too, must these institutions.  Evolving them to meet the demands of today must be a critical part of our shared transatlantic leadership.  Accordingly, this is a very important time for Americans and Europeans to come together in support of a rules-based international order that promotes global security and prosperity.

T-TIP represents ideas that were put in practice with the Marshall Plan and the General Agreement on Tariffs and Trade, or GATT, back in 1948.  We are now at the point where we are ready to take the final step along the path we have been travelling for decades: the creation of the largest free trade zone on the planet.

Like other trade agreements, the Transatlantic Trade and Investment Partnership agreement addresses tariffs.  Of far greater significance, however, is its focus on non-tariff barriers to trade and the advancement of the rules-based public commons in which the nations of our transatlantic community have thrived.

T-TIP promotes the values an open trading system represents: freedom, open markets, rule of law, intellectual property right protection, transparency in our commercial dealings, high standards for consumer health and safety, and respect for the environment and working men and women.  These are the values that we share and that our citizens find so important.

Now, creating a trade agreement that enshrines these principles may thus sound logical, but apparently not to everyone.  When the negotiations were launched two years ago, we knew they would present great opportunities – and also a few challenges.  After ten rounds, we see both.  In my opinion, in view of recent developments, the opportunities presented by T-TIP are even more obvious.  Unfortunately, there are challenges we did not fully foresee.  The public debate over T-TIP, in particular here in Germany, has been dominated by fears, rather than the realities of free and fair trade.  Clearly the “drip-drip-drip,” or should I say dump-dump-dump, of Snowden-related NSA allegations, have not contributed to the sense of trust that is basic to any negotiation.

And candidly, T-TIP proponents in Europe lost the first round of framing the public discussion; and not because we lost a battle of ideas – but because we were very late in even showing up.  Now, I can talk about T-TIP ‘til I am blue in the face – and sometimes I do; but let’s face it – the American Ambassador is not going to be the most effective advocate for T-TIP in Europe.  Fundamentally, Europeans need to hear from Europeans about how increased trade and investment with the U.S. will positively affect their lives.  And that is why this conference, and the continuing work of Atlantik Brücke, is so important.

The fact is T-TIP will boost exports, support jobs, and advance a pro-growth agenda in Europe.  And at a time when much of the EU is struggling economically, facing not only stratospheric youth unemployment but also now a migration crisis of a dimension not seen since the end of World War II, T-TIP would be a virtually cost free jobs package and a stimulus to the European economy that would not require governments to spend or borrow a single cent.

We also need to shed light on a number of misperceptions – for example, regarding the investor-state dispute settlement mechanism, or ISDS.  The ISDS approach, which was in fact first invented by Germany to protect its companies from having their assets nationalized by foreign governments, is not designed to prevent any government from adopting or maintaining non-discriminatory laws or regulations.  It will not impose new, extra-legal conditions that will limit the ability of sovereign nations to regulate in the interest of financial stability, environmental protection, or public health.  I often hear that we don’t need ISDS because Germany and the U.S. have well-developed legal systems.  Well, this isn’t a trade agreement between Germany and the U.S.  It is between the entire European Union and the U.S., and Germany has a number of trade agreements including EU member states where it has insisted on the inclusion of ISDS.

Misperceptions have also arisen concerning harmonizing different regulatory schemes.  This effort would not result in a “race to the bottom,” as some fear, or a loss of sovereignity. The U.S. and the EU are the most highly regulated economies in the world.  When it comes to regulation to protect consumer health and safety, neither the U.S. nor EU countries would accept a lowering of our high standards, or of their abilities to legislate, as the leaders in both Germany and the United States have made very clear.

Some say that T-TIP will only benefit big companies.  In fact, small and medium-sized companies stand to benefit even more.  Here is why: very often, a product built to high standards in the EU cannot be sold in the U.S. – and vice versa – due to minor regulatory differences.  Differences which do not have any meaningful impact on safety. for instance, the color or shape of an automobile tail light.  These immaterial requirements often result in excess manufacturing costs, which get passed on to the consumer.  Now large firms have the resources to maintain multiple production lines, or to hire armies of experts and lawyers to deal with conformity assessments and differing regulatory frameworks.  Most often, smaller businesses do not.  And for every small business’ successful entry on the international market, there are many more for which the barriers to exporting are just too high; too complicated; too costly.

There are other issues that we could discuss, and clarify, but my fundamental point is this: We need to bring a more balanced perspective to the T-TIP debate.  As I said at the outset, this debate is taking place at a time when Western values such as rule of law, human rights, and open markets – the backbone of the “world of order” that our citizens cherish – are being challenged on many fronts.  With T-TIP, we have the opportunity to reinforce those values; and to build an economic and strategic framework that can serve as the foundation for shared prosperity well into the coming century.

Together, transatlantic partners have tackled global security challenges, promoted prosperity, and upheld international norms.   And the “partnership in leadership” with a reunited Germany that President George H.W. Bush foresaw on the eve of German reunification has come to pass.  Germany is indeed leading through partnership – a partnership based on principles of mutual responsibility, mutual interest, and mutual respect.  It plays a critical role both within Europe and throughout the world; and without question, it is one of America’s strongest allies.  Foreign Minister Steinmeier has described Germany’s role as Europe’s “chief facilitating officer.”  I often describe Germany as our “indispensable” partner.

And I am certain that the strength of our ties will help us address the serious challenges of the 21st century.  And I look forward to discussing how we can make those ties even stronger in our panel discussion.

Thank you.