Leipzig, November 21, 2013
Ambassador John B. Emerson
Sehr geehrter Professor Pinkwart, ich möchte Ihnen und Ihren Kollegen an der Handelshochschule Leipzig für die Gelegenheit danken, auf dem jährlichen HHL-Forum zu sprechen. Bedauerlicherweise konnte ich nicht an der gesamten Konferenz teilnehmen.
Die Themen, die Sie hier behandelt haben – von den Finanzmärkten und dem Unternehmertum bis hin zu Innovationen – stehen ganz oben auf der transatlantischen Agenda. In vielerlei Hinsicht leiten diese Themen die transatlantischen Beziehungen. Und ich spreche dabei nicht nur von Handel und Investitionen.
Our two countries share a unique partnership. There are bonds formed by centuries of immigration. Both my wife and I, like over a quarter of Americans, have German roots.
In the years and decades following World War II and during the long, hard years of the Cold War, the United States followed one basic premise: If Europe is at peace, America is more secure. If Europe prospers, America does so as well.
Since that time, as trans-Atlantic partners, we came to share a common destiny because we saw the logic of mutually beneficial interdependence, where each nation can grow stronger and more prosperous because of the success of its neighbors and friends.
And so when the Wall fell, America welcomed and supported Germany’s – and Europe’s – march toward unity. For more than 1,000 years, from the time of Charlemagne to the founding of the European Community, the idea of a unified Europe captured the world’s imagination. Thanks to events that began with the peaceful revolution here in Leipzig, and in other cities and town throughout the former GDR, for the first time, that dream was reached – not through conquest but through the decision of free people. A decision that, by the way, was shared by people around the world, thanks to the explosion of satellite communication.
My colleagues at our Consulate in Leipzig have told me about some of the initiatives that were put in place in the 1990s to re-establish bonds with the people in the Eastern states. During that historic period of your country’s history, all Americans admired your strength and courage and your commitment to freedom. Civic courage – the will to keep in clear sight one’s goals as a people, no matter how distant or how difficult they may appear — has been a powerful and emotional link between Germans and Americans.
Americans also identified with the pragmatic, flexible approach that Germans, in all parts of the country, applied to the challenges of reunification and to defining a democratic future for all of Europe.
This was an opportunity without precedent in our common pursuit of economic and political freedom. And as trans-Atlantic partners, the United States was proud to work along-side Germany to make it succeed. I am talking about deeds, not just words; and concrete projects, not just plans.
I am also talking about an engagement that is ongoing, an engagement that is political, as well as economic; an engagement that is based on common values; an engagement that is the basis of our global cooperation, and pursuit of shared mutual interests. Such an engagement is crucially important to the United States and Germany.
I often caution my colleagues not to let the urgent overwhelm the important. However, sometimes the urgent does call for our immediate action.
And in this regard, I want to digress for a moment to assure you that I fully understand the distress that has been caused by the recent allegations regarding the NSA, particularly here in the former GDR. I have communicated the depth and intensity of the German reaction to Washington. These concerns are being taken very seriously, at the highest levels of our government.
First, President Obama has ordered a review of the way the United States gathers intelligence to ensure that we are properly balancing privacy and security in our efforts to protect the lives of our citizens and allies. We want to ensure we are collecting information because we need it; not just because we can. This review will be complete by the end of the year. The President is committed to sharing the results with our allies and partners, and wherever possible with the public as well.
Second, we are talking to our German partners, again at the highest levels, about how we can better coordinate our intelligence efforts and address the privacy concerns that all people share. President Obama has spoken with Chancellor Merkel about this. And at the most senior levels, leaders of our respective intelligence communities are meeting to make certain we coordinate in a manner that is consistent and respectful of the closeness of our alliance.
Finally, on Capitol Hill, the congressional oversight committees are examining both the legal underpinnings of our intelligence gathering activities as well as how to increase their own oversight capabilities, given the advances in intelligence gathering technologies that have developed over the past decade; advances which many legislators feel have outstripped their oversight abilities.
Amid these concerns, people often ask me whether trust can be re-built. Well, I believe that it can, and will be. This is where leadership and communication, the central themes of this conference, are crucial
Any long-standing relationship, no matter how strong, goes through periods of difficult times; and we’re in one of those periods now. But we will get through this because we must. We must because our history, friendship, values, and shared national interests demand it. And it is my great hope that, at the end of the day, our relationship will be even stronger. As Chancellor Merkel herself has made clear, we cannot let these allegations distract us from so many of our other critically important mutual goals.
Realistically, however, the pattern of leaks to various news outlets is likely to continue over time. Every time there is another story, we have a choice: we can either stop in our tracks and put a hold on all the other critical work we are doing together, or we can move steadily forward on all fronts – including this one – simultaneously.
One example of the significant and vital work we are doing together is the trans-Atlantic trade and investment partnership, or T-TIP. This is a topic which I am sure will impact you directly, either in your studies or for the graduates and leaders among you, in your business lives.
The concept behind T-TIP is not new. It represents ideas that were put in practice with the Marshall Plan and the General Agreement on Tariffs and Trade, or GATT, back in 1948. It was also reflected in the North Atlantic Treaty, which established NATO a year later.
Fast forward to the new Trans-Atlantic agenda in the mid-1990s and the Trans-Atlantic Economic Council, launched during Germany’s presidency of the European Union, some 10 years later. As partners, we have worked together to refine a post-Cold War vision for the 21st century. The goal now is to complete the road map toward prosperity that we have been developing together over the past two decades.
Now, I know that many sectors of the German economy are doing well. For example, the federal Interior Ministry just released its annual report on the State of German Reunification: The report highlights several positive economic developments, some of which are particularly good news in this region. The unemployment rate is half what it was in 2005; and the lowest it has been since 1991. The birth rate in the eastern German states now exceeds that of the western German states; and, perhaps most significantly, for the first time, migration between the eastern and western areas was roughly equivalent in 2012. Mitteldeutschland can be proud of the progress it has made in building on its long research and industrial strengths.
In my country, the employment situation is also improving. The energy sector is going through a renaissance as new technologies and innovations shape the market.
But we cannot afford to be content with our success. And we have a long way to go in confronting issues such as youth employment. Moreover, in this ever-changing world, if we are not pushing forward, we’re falling behind.
We also cannot afford to be either nay-sayers or skeptics. In 1899, Charles Duell, the Commissioner of the U.S. Office of Patents, said that “everything that can be invented has already been invented.” In 1948, Thomas J. Watson, Chairman of the Board of IBM, said, and I quote, “I think there’s a world market for about 5 computers.” Well, they were obviously wrong. Technological advances have transformed the business world. Entire new industries have been developed. But at the same time, many non-tariff barriers to trade have emerged around the world, since the creation of the WTO.
Consider the opportunity presented by T-TIP. Together, the EU and the U.S. account for almost half of the world’s economic output and 40 per cent of global trade. But ours is also the world’s largest investment relationship. This investment pays off in numerous ways. In terms of jobs, the benefits are obvious. But our mutual investment also includes a large percentage of research and development – on both sides of the Atlantic. This cutting edge research is representative of our huge stake in the future success of each other’s economies, not to mention the kinds of jobs and products and services that we cannot even imagine today.
T-TIP will boost the level of those cross-investments; and it will improve our abilities to compete in the marketplace of the 21st century. By strengthening the rules-based approach that supports the entire global trading system, we will also be sending a message to the rest of the world about the values a free trading system represents: freedom, rule of law, respect for intellectual property rights, transparency in our commercial dealings – this is what creates the best path toward prosperity.
This is why I say that T-TIP can create a strategic, political and economic framework that is as important in the 21st century as NATO has been in the second half of the 20th century. It can create a gold standard that will form future such agreements as we look to the east and the south.
Now, as great as all this sounds, we know it won’t be easy: one of the biggest challenges in negotiating and implementing T-TIP will be harmonizing different regulatory schemes. Our regulatory systems, whether in the U.S. or Europe, are the most advanced in the world. We know that when we get behind the wheel of a car or board an airplane – on either side of the Atlantic – regulators have worked with manufacturers to ensure that we are traveling in greater safety than ever before. We know that we can eat a fantastic meal here in Leipzig or in Houston, Leipzig’s sister city; and that the food will be safe and healthy, regardless of the fact that it may have gotten to the table via different regulatory structures.
The problem is, as one trade policy expert says, “both sides say, ‘this is simple. We can get huge gains from coordinating. You should do what we do.’ And the other says, ‘No, it is better if you follow our model.’ And you end up with nothing.”
Well, we don’t have to accept ‘nothing’ for an answer. As Dan Mullaney, the American lead negotiator for T-TIP, said at an event last week in Berlin, there are three approaches we can take to the issue of standards: We can agree on one set of regulations. We can agree to recognize the standards of our partners. Or, we can establish a framework, through T-TIP, to work out the tough issues as they arise. Candidly, we ought to do all three. As my favorite college philosophy professor was fond of saying, there are many roads up the same mountain.
All this reminds me of two very important lessons I learned about communication and leadership when I worked in the Clinton White House in the 1990s on trade issues.
First lesson: start the discussion with the areas upon which there is agreement; then build on that consensus by tackling the tough issues.
Second, mobilize the stakeholders. In other words, identify those people who are key to implementing change and get them involved; communicate with them; energize them.
So, to that end, this is my request of you. I ask everyone in this room to take responsibility for advocating the successful implementation of T-TIP by the EU parliament and member states.
We know, starting with President Obama and Chancellor Merkel, that leaders on both sides of the Atlantic support T-TIP – and for those of you who are still scratching your heads over the government shutdown last month, support for T-TIP in Congress is bipartisan. By the way, if you are worried about a possible re-run of the movie we saw in October, I, for one, do not believe that it will happen. We can talk about that later if you wish.
Nevertheless, in terms of reinforcing the T-TIP message, we need to start connecting the dots for our parliamentarians so they see the connection between the agreement and the lives of their constituents. The 2014 European Parliament elections are a great place to start.
I discussed this with a second visitor to Berlin last month – Carla Hills, the USTR under the first President Bush. I understand Carla Hills was invited to visit HHL and I hope that she will be able to do that in the future. When we met, she stressed the importance of spreading the news. And so I ask you to also consider how you can energize your colleagues, your employees, your fellow citizens, and your business partners. Ambassador Hills suggested figuring out the percentage of employee paychecks that is earned from trans-Atlantic business and letting people know how important international trade is to their wallets! Encourage them to let their representatives know the importance of T-TIP. In my experience with the U.S. political system, elected officials “don’t read their mail; they weigh it.”
I also believe that we need to reinforce the impact of T-TIP on innovation – another theme of this conference. And congratulations on HHL’s recent well-deserved award for innovation.
California, my home state, is famously innovative with its Silicon Valley and Silicon Beach. I know you have Silicon Saxony, here. Since coming to Germany, Kimberly and I have made a point of reaching out to young innovators and entrepreneurs — and that’s one reason I am happy to be here today. I hope this will only be the start of a conversation that I would very definitely like to continue. We owe it to our young people – on both sides of the Atlantic – to implement a system that encourages innovation. Their ideas are the seeds not only of tomorrow’s jobs, but also the continuing prosperity of our economies.
Finally, apart from negotiating trade agreements, what can government do?
Ideas come from individuals, young and old; but individual achievements take place within a context. It’s the role of government to create an environment that allows innovative ideas to take root.
Neither of our two countries can guarantee global prosperity, energy security, efficiency, and market stability alone. But there’s a lot we can do together.
First, we can promote societies in which any person anywhere can participate in markets everywhere; a society in which ideas, information, products and capital can flow unimpeded by unnecessary or unjust barriers.
A second way to stimulate innovation is by setting political and economic goals.
For example, if Germany’s Energiewende succeeds, Germany will be the center of renewable energy technology and innovation.
Similarly, in the U.S., the Obama Administration and individual federal agencies have set ambitious sustainability goals. Since 2008, we have more than doubled renewable energy generation from wind, solar, and geothermal sources. We’ve invested in advanced technologies and alternative fuels, and we’ve expanded responsible domestic oil and gas production. Unconventional oil and shale gas have driven down energy prices for industrial, commercial, and residential users. They have also created thousands of good jobs in the United States and have also resulted in a dramatic reduction of CO2 emissions. Pursuing clean energy technology is a great example of something not only being the right thing to do but also being the smart thing to do.
There are many examples of how innovative policy goals and ambitious scientific research reinforce each other. In fields such as nanotechnology, biotechnology, information technology, and cognitive science, both basic and applied research drive and inspire policy goals, which, in turn, create the incentive for more research and development. This is how investments and basic research led to things like the computer chip and GPS systems.
And so, another important role governments can play is making these kinds of investments. It would have been hard for Steve Jobs to have reached the heights that he did if the Defense Department’s Defense Advanced Research Projects Agency, DARPA for short, had not developed the Internet in 1971. Where would the car industry be without highways or the Autobahn? What kind of pharmaceutical revolutions could take place without government-funded basic research? Maintaining and increasing individual capacity for innovation requires key investments in a solid foundation.
In the United States, we’re applying a collaboration model, through public-private partnerships, to ensure the implementation of new technologies and to foster new ideas. Through business incubation programs that marry fresh inspiration with practical know-how and funding, a back-of-the-cocktail-napkin sketch can be transformed into a viable and realized enterprise.
I understand that this is something that Germany and the EU are also committed to expanding; In the United States, we’ve seen incubators aggregate into networks. Germany, with half of Europe’s business incubators, has been a role model in terms of supporting an entrepreneurial spirit of innovation. Right here in Leipzig, universities, business and research institutes work together to grow the economy and jobs. Linking up these broadening networks internationally is the next logical step.
We can talk a lot about the elements of innovation and how to promote it, but I think a simple and useful formulation comes from an American management guru, Tom Peters who said: “Celebrate what you want to see more of.”
This conference is a great example of the kind of collaboration and dialogue we want to celebrate and see more of.
Nochmals vielen Dank, dass Sie mich eingeladen haben.