Wildbad Kreuth, January 8, 2014
Ambassador John B. Emerson
Es ist mir eine Ehre, hier in Wildbad Kreuth zu sein. Ich bin seit Ende August in Deutschland. Die Wahlen habe ich genau verfolgt. Ich möchte der CSU zu ihrem starken Ergebnis gratulieren, ebenso wie allen Mitgliedern – insbesondere aber den neuen Mitgliedern – der Regierungen, die hier in München und in Berlin gebildet wurden.
This will be my fifth visit to Bayern in just over four months. In fact, Monday morning, my family and I flew back to Berlin after several days of skiing in Garmisch – und auf der Zugspitze! And I will be back in just a few weeks for the Munich Security Conference. I have been to München, Regensburg, Hohenfels, Grafenwoehr, Dachau, Rothenburg ob der Tauber, Erlangen, Forchheim, Herzogenaurach, Nuremberg, and many other places in between and along the way.
I have visited BMW’s headquarters and toured BMW Welt and the Showroom. I was also present at the launch of the new i3 electric vehicle in Berlin at the end of November.
General Electric’s Global Research Center in Munich was one of our first factory visits in Germany. That is where I heard about GE Aviation Deutschland’s development and manufacturing shop in Regensburg, the first of its kind in Germany.
Just last month, Consul General Bill Moeller and his staff arranged a visit to the Siemens Global Healthcare facility, where we had a very interesting discussion about the activities of Siemens – both here in Germany and in the US. Altogether, Siemens employs over 50,000 Americans, and it reaps the benefits of one of the most important markets in the world, in particular in terms of healthcare and industrialization.
I also had the pleasure of learning about state-of-the-art athletic research carried out at Adidas; and I even got to see the new Fussball designed for the upcoming World Cup.
Our discussions here in Bavaria however, have not just been limited to the scope of our mutually beneficial trade and investment relationships. In November, I visited the Joint Multinational Readiness Center and the Joint Multinational Training Center at Grafenwoehr and Hohenfels which anchor the presence of the U.S. Army in Europe. Together they form its largest and most modern training facilities outside the continental United States. I met with the American and German military commanders, as well as the mayors of the surrounding towns; and they made clear to me that our service men and women – and their families – are fully integrated into the neighboring communities in the Oberpfalz.
I would like to take this opportunity to thank you for your support of the US military presence in Bavaria and to thank all Bavarians for being such friendly and generous hosts to millions of American soldiers and their families for more than 65 years. The U.S. Army presence in Bavaria and the U.S.-Bavarian partnership were critical to our trans-Atlantic alliance during the Cold War; and that is still the case. Even today, over 60,000 U.S. and Allied soldiers attend specialized courses, working and training together. There is no better example of the new NATO than the first-class training centers in Grafenwoehr and Hohenfels.
I would also like to thank the state of Bavaria for the support provided to the Amerika Haus in Munich and the German-American Institute in Nuremberg – both of which I have visited. The staff at both locations could not be more dedicated and creative in their approaches to developing programs that demonstrate the win-win aspects of our trans-Atlantic relationship. Both of these institutions are excellent public platforms for the kinds of meaningful discussions about common values that are essential for a strong future-oriented 21st century partnership.
And finally, I have also visited Dachau, where I had the privilege of meeting with city leaders in the new town hall, and touring the concentration camp memorial. I was honored to sign the guest book there on the page right after the one signed by Chancellor Merkel. I learned how the city has confronted its horrible history; but I also learned about the vibrancy of today’s Dachau and its commitment to the common values that are the foundation of the trans-Atlantic community. In fact, in my travels to 14 of Germany’s 16 Länder these past five months, I have seen that commitment everywhere.
Today’s Germany is a role model; exactly the kind of role model that leaders in the United States and Europe envisioned when, at the end of World War II, they formed a partnership, based on a vision of freedom and prosperity. I don’t think anybody would argue that the world would be a better place now, if trans-Atlantic partners had not come together then, committed to that vision and to the values that define both our national and our mutual interests. And as I look to the future, we are at a point in our relationship where we must re-dedicate ourselves to our partnership, and its underlying values.
Given that backdrop, I want you to know that I fully understand the distress that has been caused here in Germany by the recent disclosures regarding the NSA. I have experienced Germany’s concerns on both an official and a very personal level. Since our arrival, my family and I have been deeply touched by the warmth and authenticity of the welcome we have received throughout Germany – a welcome that has not so much to do with us, as it does with the bonds of friendship so many Germans feel towards America. Well, we have also felt – quite personally – the disappointment that so many people here share.
I have communicated the depth and intensity of the German reaction to the NSA revelations back to Washington. And I can assure you, these concerns are being taken very seriously, at the highest levels of our government. I will give you three examples.
First, as you know, in response to the NSA disclosures, President Obama ordered a review of U.S. intelligence gathering activities. His goal was to ensure that there is a correct balance between privacy and security; that we collect information because we need it, and not just because technology tells us we can.
A preliminary report of that review was made public just before Christmas. Some of you may even have read it online. Recommendations include changing the long-term retention of telephone and internet communication metadata by private and government entities – and addressing concerns about potential abuse; strengthening the process by which the Foreign Intelligence Surveillance courts operate by ensuring that privacy concerns are presented there as well; increasing the oversight by senior government officials of decisions made by our intelligence services – and, where possible, making those decisions more transparent; and, extending specified protections to non-U.S. persons. President Obama, in collaboration with the intelligence community and others, is evaluating the recommendations that have been made. We can expect a Presidential decision later this month.
Second, we are engaged in ongoing discussions at senior levels of the U.S. and German governments about how we can best coordinate our intelligence efforts, while at the same time addressing the privacy concerns that all people share; and to clarify how we can work together in a manner that is respectful of the relationship between our two countries.
Finally, on Capitol Hill, Congressional oversight committees are examining both the legal underpinnings of our intelligence-gathering activities and their own oversight capabilities. One only need read the newspaper to see that there is a vigorous debate in Congress about these issues. It is clear that once the President has made his decisions, Congress will also evaluate the need for policy changes.
Without a doubt, our intelligence programs need to be carefully monitored and controlled; but make no mistake, we do need them. Candidly, after the reports about the Chancellor’s cell phone, many people conflated that with the data analysis programs, mistakenly believing that the NSA was listening to their phone conversations and reading their emails. In fact, meta-data analysis is a numbers-processing function that is analogous to looking for a needle in a haystack – something that is necessary in this viral age where terrorists are very sophisticated in their use of technology to recruit, plan, and attack. Yes, changes will be made but again, we need to be clear-eyed about the threats we face from terrorism, the proliferation of weapons of mass destruction, and cyber warfare. The reality is that since 9/11, the efforts of our collaborative intelligence gathering efforts have thwarted numerous terrorist attacks, including some on German soil. In making policy changes, we have to be careful not to throw the baby out with the bathwater.
I would be happy to discuss any of these points during the question period; but let me address one specific issue that has been raised in conversations I have had with business leaders: and that is the concern that the United States may be conducting industrial espionage, in particular here in Germany. As you know, the U.S. government does not comment on the specifics of intelligence activities. Nevertheless, last July, the Office of the Director of National Intelligence made an exception to that rule when it was explicitly stated that the United States does not use foreign intelligence collection capabilities to steal the trade secrets of foreign companies for the commercial advantage of American companies. Period.
Amid all these concerns, people often ask me whether trust can be re-built. I believe that it can, and that it will be. Any long-standing relationship, no matter how strong, can go through difficult periods; and we’re in one of those periods now. Good friends disagree; but they also work out their differences. We will get through this because we must – and I firmly believe that if we work through this together, with mutual respect and understanding, our relationship will become even stronger. As important as these issues are, we must also stay focused on our other critically important mutual goals.
One of those goals is the negotiation and implementation of the Trans-Atlantic Trade and Investment Partnership. When I arrived in Berlin, I said that, in addition to re-building trust, economic statecraft would be one of my top priorities. Since then, and in the course of meeting with many people at companies, both large and small, I have become even more convinced of the vital role that businesses play in advancing the shared interests of our two countries.
It is hard to imagine now, but in the early postwar years, Bavaria was one of the least prosperous states in West Germany. Today, of course, it is an economic powerhouse. Agriculture is still a mainstay of the Bavarian economy (as it is in the United States, including my home state of California), but Bavaria, again just like California, is also home to a sophisticated and highly productive manufacturing sector.
Let’s step back a moment and think about the roots of this Bavarian success story. Certainly, the Marshall Plan played a role; but other European countries received more Marshall Plan funds, and are not where Germany is today.
The initiatives taken by individuals and institutions, both public and private, in the early postwar years were also essential driving factors for the social, political, and economic conditions that spurred the Wirtschaftswunder. And in fact, what people called a miracle was really no such thing. It was very real and very clear demonstration of how peoples’ lives can improve through capital investment and the elimination of barriers to free economic development.
Then, as now, open markets are the path to future prosperity. Today, our common goal is to complete the journey that began over six decades ago. In terms of global trade and investment, there have been important milestones along that road: the original GATT, or General Agreement on Tariffs and Trade, which came into force in 1948, as well as the Uruguay round of GATT talks which created the World Trade Organization in January 1995. However, in the past two decades, technological advances have transformed the business world. Entire new industries have arisen. At the same time, many non-tariff barriers to trade have been put in place around the world.
By strengthening a rules-based approach that supports the new parameters of the global trading system, T-TIP will help create a strategic, political and economic framework that will be as important in the 21st century as NATO was in the second half of the 20th century. I see T-TIP as a new gold standard, that will serve as a model for future agreements, as we look to the east and the south and across the developing world.
I spoke earlier about the essential role that businesses play in advancing the mutual interests of our two countries – mutual interests built on common values like freedom, rule of law, respect for intellectual property rights, transparency in commercial dealings, and respect for the environment and employees. T-TIP will reflect these common values; and as such, it is a whole that is much greater than the sum of its parts.
T-TIP will also improve our abilities, as trans-Atlantic partners, to compete effectively in the marketplace of the 21st century. Together, the EU and the United States now account for almost half of the world’s economic output and 40 percent of global trade. Ours is also the world’s largest investment relationship.
Companies like BMW, now America’s biggest car exporter, demonstrate how trade and investment create win-win situations on both sides of the Atlantic. Domestically, in Germany and especially here in Bavaria, many sectors of the economy are doing well. In the U.S., the employment situation continues to improve. The American energy sector is experiencing a renaissance as new technologies and innovations re-shape the market. But none of us can afford to be content with these successes. The founder of the 80-year old Mittelstand investment company for which I worked before becoming Ambassador had a great observation: “Nothing wilts faster than laurels rested on.” Roughly translated: “Nichts vergeht schneller als alte Lorbeeren.” In this ever-changing world, if we are not pushing forward, we’re falling behind.
The vitality of our partnership depends on innovation. Innovation means enabling people to develop ideas, to take risks, to be willing and able to cross oceans, to create new products, and to discover new possibilities for their own futures. Our ability to create the conditions for that kind of innovation and to ensure the prosperity we want for tomorrow, rests on what we do to build stronger ties today. That is why T-TIP is so crucial.
Nevertheless, there are concerns. For example, some are concerned that only the large multinationals will benefit from T-TIP. This is not true. In fact, all levels of companies stand to profit from the agreement – and in particular, many of the small and medium sized companies that are the backbone of the Bavarian economy.
It is, however, no wonder that global players in the German corporate world support an ambitious far-reaching agreement. Eliminating tariffs on imported cars could mean an extra 300 million Euros each year to BMW alone. More broadly, any reduction in tariffs as a result of T-TIP will bring immediate benefits to consumers, including lower prices and more choices in the market. In addition, many workers in Germany and the U.S. will also be able to look forward to more and better jobs, as a result of T-TIP.
Of great significance, however, are non-tariff barriers, such as regional regulations and standards. Removing these kinds of barriers will greatly simplify – and increase – trans-Atlantic trade. This is also where, proportionally, small and medium sized companies stand to benefit from T-TIP. Big companies can afford to employ specialists to deal with regulatory differences. Smaller businesses will benefit from regulatory convergence by saving money on duplicative testing, legal analyses, and conformity assessments.
One goal of T-TIP is to help ensure that the high standards that we set in our economies become the worldwide standard for judgments about the stability of the marketplace and the reliability of investments. Removing non-tariff barriers will further strengthen our joint position as a model in advancing a rules-based global commons – one in which the nations of our trans-Atlantic community will thrive.
This also holds true for more traditional economic sectors, such as agriculture. Every fourth Euro in German agriculture stems from exports; and as the President of the Bayerischer Bauernverband has said, T-TIP can expand export prospects for high-quality products with a strong “Bavarian trademark.”
Efforts to address trade barriers through T-TIP have been and will continue to be guided by a commitment to the rigorous, science-based standards of health, environmental, and consumer protection that both U.S. and EU citizens expect. Our regulatory systems are the most advanced in the world. The United States and the members of the European Union lead the world in science, and in research and development. 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 closely with manufacturers to ensure that we are traveling in greater safety than ever before. We know that we can eat a fantastic meal anywhere here in Germany or in the U.S., and that the food will be safe and healthy, regardless of the fact that it may have arrived at the table via different regulatory routes.
We have been able to reduce regulatory barriers to trade without undermining consumer safety in all of our previous trade agreements, and we can do the same in T-TIP. Both Germany and the United States enjoy uniformly high standards of safety and quality in the products they buy and the foods they consume. The differences between us can be measured in grams and millimeters – or ounces and inches. The issues both of us care about are quality control and customer satisfaction. Speaking for my country, I can assure you that we are not interested in being part of any race to the bottom.
One of the main goals of T-TIP is to create a fair playing field which improves everybody’s sense of the future – from the farmers who are struggling to put good, healthy food on our tables and still make a living; to the employees of small and medium-sized business, as well as multinationals; to young people, seeking long-term employment. And here I am talking about both the young entrepreneur who might be the world’s next Steve Jobs or Bill Gates or Werner von Siemens, who established the company that bears his name at the age of 31, as well as the inner-city kid who is trying to enter a tight job market without any real qualifications or experience.
Apart from regulatory issues, there are other concerns. For example, some people have expressed concern about the level of transparency in the negotiating process. Well, government-to-government negotiations are never held in public. While there are a great many issues on which we already agree, different levels of dialogue will be required, especially when it comes to the areas where we have divergent points of view. Some of these discussions, due to the sensitivity and complexity of the negotiations, will need to take place behind closed doors. As legislators, you know that this is a necessary part of the process of finding consensus and coming to an agreement. But as politicians in a democratic society, you also know that it is crucial that the issues at stake are well understood within the wider public sphere.
As such, the fact is a large number of stakeholders on both sides of the Atlantic have been included in meetings with the negotiators. And in unprecedented fashion, there have been public read-outs after each phase of the negotiation process has concluded. I worked at the White House under President Clinton in the 1990s. One of my jobs there was to manage efforts to secure Congressional approval of the Uruguay Round of the GATT. Believe me, I know how important it is to work with stakeholders – both to obtain the best possible agreement, and to secure approval of that agreement by the governing bodies – in this case, the European Parliament and the United States Congress.
Both the T-TIP negotiations and the NSA allegations have focused attention on the larger importance of the German-American relationship, and I will conclude with this thought: President Harry Truman once said, “If you can’t stand the heat, get out of the kitchen.” Well, as a Californian, I enjoy the heat! As long as I am Ambassador, I plan to stress the importance of our long relationship, ask directly about your concerns, and address our toughest challenges everywhere I go.
One of my biggest concerns for the trans-Atlantic relationship is the younger generation of Germans – folks who came of age after the fall of the Wall and re-unification, who do not understand how important the German-American alliance was to both of these great successes. Young Germans have many questions about the United States – questions that go far beyond comprehensive international trade agreements and intelligence gathering activities. From the government shutdown last October, to our legislative battles over the debt ceiling, health care, gun control, and immigration, I know that people here feel that America could do this and should do that better. But you know what? Many Americans, with pride in their country, feel the same way. America has always been a work in progress. It is written into our Constitution. From the beginnings of our nation, founded on a commitment to freedom and democratic values, we have always sought to “form a more perfect Union.”
Finding solutions to challenges has made America stronger as a nation. Working together for the common good has been a distinguishing feature of the American character since its earliest days. In 1831, Alexis de Tocqueville traveled extensively in the United States, recording his observations of life in the young nation. He recognized and applauded American voluntary action on behalf of that common good. Americans, he said, did not rely on others – whether a government, an aristocracy, or a church – to solve their public problems; rather, they did it themselves, through voluntary associations and a culture of philanthropy.
People from founding father Benjamin Franklin to the philanthropists and volunteers of today, ever mindful of the “greater good,” helped to establish or improve institutions such as universities, libraries, public hospitals, mutual insurance companies, volunteer fire departments, performing arts organizations, and agricultural colleges. Fundamental to American values is the conviction that people, working together in a spirit of cooperation, can together accomplish great things; and that creating opportunities will lead to a better life for all.
I mentioned at the beginning of my remarks that today’s Germany is a role model. It is respected worldwide for its vibrant and stable democracy, its economic strength, and its open and diverse society. I have also referred frequently to the values we share. Those values are reflected in society here in Germany and in the United States; they are also reflected in our mutual goals and interests; and they are fundamental to the ongoing partnership of our countries and friendship of our people.
As we begin this New Year, we all know that it will not be without challenge. Let’s not forget, however, that, as President Obama has said many times, the United States and Europe can and must continue to play the leadership role that the world needs and expects of us in these complex times. Let us now re-dedicate ourselves to re-focusing our cooperation, improving our communication, and strengthening our partnership for decades to come.