BDI Annual Meeting

Berlin, September 22, 2014
Ambassador John B. Emerson

Herr Grillo, vielen Dank für die Einladung zu Ihrem jährlichen Treffen. Ich bin erst seit heute Nachmittag aus Kalifornien zurück, aber es war mir wichtig, heute Abend hier zu sein. Wir arbeiten in vielen wichtigen Bereichen zusammen, und ich danke Ihnen für Ihr Engagement und Ihre Partnerschaft. Außerdem möchte ich Ihnen einen Freund vorstellen, der mich heute begleitet, einen prominenten Deutsch-Amerikaner: Gerhard Casper, ehemaliger Präsident der Universität Stanford.

Herr Grillo, thank you for asking me to join you at your annual meeting.  I just arrived this afternoon from California, but wanted to be here with you tonight.  We are working together on many important issues, and I want to thank you for your commitment to our partnership.  I also would like to introduce a friend who is with me this evening, a prominent German American: former President of Stanford University, Gerhard Casper. 

My family and I came to Berlin just over a year ago.  It is no secret that the German-American relationship has undergone some difficult challenges over the past year.  Given the importance of this gathering, I thought this would be a good time and place to review the progress we have made, or not. on crucial aspects of the trans-Atlantic relationship and discuss the work that lies before us.

Upon our arrival, I identified three themes as my top priorities.

First, re-building trust in the context of what has been an ongoing discussion about the NSA and broader questions on intelligence matters;

Second, setting the groundwork for the successful negotiation and enactment of the Transatlantic Trade and Investment Partnership – something on which many of us here tonight have been closely working together;

And third, building trans-Atlantic bonds with those Germans who came of age after the fall of the Wall, many of whom are, today, questioning the fundamental value of our relationship.

In each of these areas, we have suffered setbacks – most of which have been pretty well reported – but we are also making progress.

Regarding the NSA, we have listened carefully to the concerns here in Germany and we are responding to these concerns as part of an ongoing discussion that is being held at the highest levels of our governments.  Both Chancellor Merkel and President Obama agree, and insist, that when it comes to intelligence gathering, we should not be doing something just because we can, but because we need to.  Last month the President sent his Chief of Staff, Denis McDonough, to Berlin to meet with his counterpart in the Bundeskanzleramt, Peter Altmaier.  They put in place a Structured Dialogue to make sure that we not only honor that principle, but also that we work together effectively.

An integral part of this process includes the Cyber Dialogue that was announced by Aussenminister Steinmeier and Secretary of State Kerry last winter and officially launched at the Auswärtiges Amt in June.  The topics on the agenda at that first meeting ranged from security and international cooperation in the field of cyber policy to the economic opportunities of digital commerce and issues relating to data privacy.

At the same time, in the United States, we are engaged in a robust debate about the right balance between Sicherheit und Freiheit.  President Obama conducted an unprecedented, comprehensive review of our intelligence services and first articulated the results of that review in a landmark speech back in January.  For example, significant changes are being made to the process whereby data is stored and accessed.  Unprecedented steps are being taken to make sure that the privacy rights of the citizens of the United States, as well as those of our friends and allies, are protected.  Similar reviews are ongoing at the Congressional level.  Legislation has been proposed; and, as is the tradition in the U.S., in stark contrast to some other nations that are in the news these days, this process of review and reform is public, collaborative, and transparent.

But as we debate and reform, let us not forget: With all of the discussions that have taken place over the last year around these issues, we live in a world where non-state actors, such as the “foreign fighters” who are returning to Europe from Syria, and now Iraq, seek to harm us – not only through traditional and barbaric tools of terror, but also, on a nearly daily basis, through cyber-attacks on our financial, air traffic control, or energy grid systems.  These folks have become very adept at using technology to recruit, train, plan, and carry out their attacks – and it is essential that we continue our work together not only to stay one step ahead of them, but also to enable us to continue to degrade and ultimately destroy the terrorist organizations with which they are affiliated.

Our successes in protecting citizens in both of our countries usually go unreported; and yet, failure would be catastrophic.  Yes, we have made some poor decisions.  But we must keep in mind the important work of our intelligence services; and why it is crucial that strong partners, such as Germany and the United States, work together effectively, proactively, and collaboratively.

I have frequently said over the past year, even as we addressed a steady barrage of Snowden related stories, that we cannot be distracted from attending to the many challenges we face.  During my time here, whether it has been dealing with the Ukraine, or Afghanistan, or Syria, or NATO, or EU related issues, or Iran, or the Middle East, or Iraq – our vital partnership with Germany has been front and center in almost everything that we do.

The crisis in the Ukraine is a great example of this.  More than that, it is an example of the constructive, forward-looking approach that Chancellor Merkel and Foreign Minister Steinmeier bring to the global issues that are not strictly within the purview of the 21st century trans-Atlantic relationship, but that are of concern to us all.  In dealing with the Ukraine, America has no more significant ally than Germany; and President Obama has no more important partner than Chancellor Merkel.  And when it comes to sanctions, I know how tough this can be for Germany and, in particular, for many of the companies represented here tonight.  But I also know how, in the wake of the tragic downing of MH17, and the Russian incursions into Eastern Ukraine, the leaders in this room have made clear that we will stand together in meeting this challenge; even as recently as Herr Grillo’s interview in the Süddeutsche Zeitung, reported today.

The trans-Atlantic partnership has transitioned from one with an almost singular focus on the very real security challenges defined by the parameters of the Cold War to a broader, more encompassing relationship, defined by interests that go far beyond the territory of our nations.  On one level, I believe we are undergoing an entire re-examination of who we are and what we mean to one another as friends and allies, in the post-Cold War, post re-unification era.  You saw that at the NATO Summit, earlier this month.  And we saw it in Germany’s leadership within the EU on the issue of sanctions and in its decision to provide arms to the forces combatting ISIL.  Our relationship is maturing; and Germany itself is undertaking an important debate about its role in the world.  This is something that is long overdue, and it is taking place amongst new realities – about Germany’s strength, about our shared interests, and in light of our shared values.

Just as in the past 25 years NATO has re-adjusted and fine-tuned the security parameters and requirements for the 21st century, we also know that economic security and prosperity is a foundation of long-lasting national security.  Trans-Atlantic economies now face a turning point in our relationship.  And that brings me to the second priority I addressed one year ago: our mutual commitment to a successful conclusion and implementation of the Transatlantic Trade and Investment Partnership.  Last week, I was in Washington for an extensive meeting with USTR Michael Froman on just this effort.  I may be preaching to the choir when I say this; but in my view, T-TIP can create a political, economic, and strategic framework that will be as important to a 21st century of shared prosperity as NATO was to the shared security of the second half of the 20th century.

But while we’re only in the 6th round of negotiations, those who oppose T-TIP have been very vocal – raising multiple objections that are often basednot on the reality of the proposal, but that arise out of their collective fears about globalization.  Yet as Minister Gabriel has said, TTIP is our opportunity to guide and harness the impact of globalization.  Despite that, fear-based objections to TTIP are rampant.  And I know that everyone in this room is energetically engaged in efforts to bust these myths and move the discussion forward.  But we need to do better.  Candidly, folks, we 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 U.S. has little credibility here.  First of all, we’re on the other side of the negotiating table.  Second, for a whole host of reasons, people are mad at us –and that hasn’t helped.  But fundamentally, Europeans need to hear from Europeans why this is so important.

And so, in addition to the work you are already doing, I would ask you to consider how you can further energize your colleagues, your employees, your suppliers, and your business partners.  But most immediately, we need to bust those myths that are taking root about T-TIP.  One prevalent myth is that T-TIP’s efforts to harmonize standards will result in a ’race to the bottom’.  The fact is, as you know and I know, European and American regulatory systems are the most advanced in the world.  T-TIP will enshrine in law the very high standards of the EU and the U.S.

The impression that the U.S. has lower standards in consumer and environmental protection than Europe, by the way, is dead wrong.  In some areas, European standards are higher; but in many areas, as Minister Gabriel noted at a conference on T-TIP last spring, American standards are higher.  And the leaders of the U.S., the EU, and Germany have no interest in signing a trade agreement that will reduce the protection of the public interest.  The fact is that TTIP will enshrine our shared belief in rule of law, respect for intellectual property, protection of consumer health and safety, and transparency of commercial transactions.  And as such, it will become the gold standard for other trade agreements that are negotiated, by Germany, the EU or the US, as we look to the south and the east and the developing world.

Another myth pertains to agricultural products and the question of GMOs.  No, the U.S., which itself has a major market for organic foods, has nointerest in telling people what to eat.  We do, however, have an interest in making sure that decisions to ban “freak food” products are based on science, and not on fear.  One fact about American agriculture that surprises people: 87 percent of U.S. farms are operated by families or individuals; and 89 percent of those farms are considered small businesses.

Here is another issue we need to address:  Some maintain that the investor-state dispute settlement mechanism, or ISDS, which is often necessary to encourage companies to invest in other markets, will impose new, extra-legal conditions, limiting the ability of sovereign nations to regulate in the interest of financial stability, environmental protection, or public health.

The ISDS clause was, in fact, an invention of Germany that has been included in hundreds of agreements.  The United States promotes provisions in trade agreements that protect our right and the rights of other nations to regulate in the public interest.  Nothing in bi-lateral investment agreements prevents any government from adopting or maintaining non-discriminatory laws or regulations that protect the environment, health and safety, or other public interests.  And in fact, this approach has helped establish higher global standards and strengthen arbitration procedures through clearer legal rules, enhanced safeguards, and transparency throughout the ISDS process.  But these processes can always be improved, and the negotiators on both sides are open to suggestions.

Other myths:  T-TIP will force municipal water districts in Bavaria to privatize.  Not true – but if a municipality does decide to privatize, it should let GE, as well as Siemens, bid on the contract!

Another myth: T-TIP will prohibit public subsidies of cultural and performing arts institutions.  This is not even on the table for discussion – and would have as many objectors in the United States as in Europe.

My favorite myth: T-TIP will require Europe to increase fracking.  No, but itwill make easier for us to export natural gas to Europe.

Finally, we have heard concerns about the transparency of the negotiations.  In fact, in the United States, never before has the dialogue among stakeholders, negotiators, and senior trade officials been so candid and open. Unfortunately, I don’t hear the same thing from Europeans, many of whom are frustrated by the level of EU transparency.  On top of mistrust of the U.S., there is mistrust by many in the member states of Brussels.  And we are encouraging greater transparency. However, a caveat: As in any negotiation, no progress will be made if every discussion has to take place before television cameras.  You know this better than anyone.  And at the end of the day, every comma, period, and clause of this agreement will be subjected to intense public scrutiny before anyone has to cast a vote, yea or nay.

One other issue, tangentially related to T-TIP but of importance to this group: there is widespread consensus that Germany would benefit from greater investment.  As Director General Dr. Kerber recently said, Germany needs greater investment in schools,universities, the Internet, transportation, and the electricity grid.  These efforts will help Germany ensure solid growth and strong living standards.  The coalition government has recognized this need, promising to boost investment spending €5 billion over four years.  Right now represents an excellent opportunity to invest in the future.  In fact, the leveraging of public-private partnerships to increase investment in infrastructure was a topic of discussion frequently raised with our Secretary of Transportation during his recent visit to Berlin and Hamburg; and I can personally attest that the question of increased investment and infrastructure spending has also been discussed frequently with Ministers Schäuble and Gabriel.

Back to T-TIP. I specifically want to compliment and thank Ulrich Grillo and the BDI for what you have done to bring a more balanced perspective to the T-TIP debate; but we still have a long way to go.  We must not continue to allow the debate to be framed in the public arena on the basis of fear rather than fact.  We need to take whatever tough issue is in play in the press and hit it hard, head on. And we need to connect the dots for folks about the specific benefits of TTIP to local communities, individual companies, and to your employees.  We all can do better, and we all must do better.

Finally, my third priority:  When I arrived a year ago, I talked about the need to build bridges with younger Germans – those who came of age after the fall of the Wall and reunification.  I had the impression then that many young people in this country questioned the value of the German-American relationship, and even whether we share the same values.  This has worsened during my time here, and it is of great concern.

That is the subject of a full speech in itself, something I am working on – but, in closing, let me make this observation:  In thirteen months, after many conversations and discussions, I have learned that the concerns of young Germans are not so different from those of young Americans.  On both sides of the Atlantic, our young people share a scepticism of big government and big business, a passion for many of the same sports and similar tastes in music and film and fashion – the popular culture they both create and consume.  They are concerned about jobs, education, the environment, and the role and responsibilities of government in dealing with the challenges and choices facing their lives.

They are also disturbed by what they saw on the streets of Ferguson, Missouri last month, as well as the demonstrations here in Germany regarding the crisis in Gaza that exhibited ugly anti-Semitism.  In other words, their concerns range from the domestic to the international; their interests, from the economy to security; their ideals, from the deeply personal to a global mindset.  But while many young people are drifting away from an interest in America, there is an appreciation for the innovation and creativity that has made places like Silicon Valley iconic.  There is a sense of the opportunity it represents for their lives, and therein lies the potential for building new bonds.

Both of our countries have long been places where innovation is encouraged, where good ideas can thrive and dreams can become real, and where the world’s greatest minds are free to push the limits of science and technology.  The key to economic success – and the United States and Germany are cases in point – has always been the ability to develop new ideas and create new industries around them.  Many of the young people who flock to Berlin are eager to connect with the innovative, start-up culture of the United States.  Perhaps, a trans-Atlantic relationship, based on shared cultural interests and a yearning for collaboration and innovation, will serve to bond the younger generation.

But we also need to address the question of shared values, head on.  Recent polls showing an undercurrent of anti-Americanism, and a sense of many that America is no different from Russia, are distressing.  America was founded on an idea, a concept of freedom and democracy and a set of ideals that crossed the Atlantic with the first European settlers.  The belief that through conscience and free will, each of us has the right to live as we choose.  The belief that power is derived from the consent of the governed, and that laws and institutions should be established to protect that understanding.  The belief in free assembly, free speech, a free press, rule of law, the right to self-determination, and the need for free and fair elections.  Those ideas – and the values upon which they are based – were written into the founding documents that govern America to this day, including the simple truth that all men and women are created equal.  And those ideas, nearly two centuries later, were incorporated into Germany’s Grundgesetz.

As the historical timelines of both of our countries have shown many times over and in many different ways, it takes hard-working and dedicated citizens to hold true to those ideals, and to turn the vision they represent into reality.  And over the past year, there have been many opportunities to test those ideals – in places like the Ukraine, Syria, and Iraq, where we stand together in support of democracy, free expression, and human rights.

And it is important for all of us, not only our young people, to understand that while many countries have a history of going over the line – and my country is no exception, the lesson that we all need to remember is that our democracy is self-correcting.

So you see, despite the setbacks in the past year, we are making progress.  And one thing is clear.  Whether it is the security of Ukraine, peace in the Middle East, the energy stability of Europe, creating a framework that will sustain economic growth well into this century, our collective response to climate change, or combating the threat of disease like the deadly Ebola virus that is ravaging parts of Africa, no one nation can make a real difference by acting alone.  That is why our partnership and our friendship are so important.  In the end, whether we are able to live up to our ideals comes down to us – and the choices we make in confronting these challenges together.