Munich, November 19, 2014
Ambassador John B. Emerson
Thank you, Pedro Miranda. And I would like to thank Siemens for hosting this reception for the Global Cities Initiative delegation, a joint project of Brookings and JPMorgan Chase – and thank you to all those here this evening who have taken the time to meet with the delegation.
I would like to welcome the chair of this initiative, Richard Daley, the former mayor of Chicago, one of America’s greatest cities, and incidentally the city of my birth and where I received my legal education.
I would also like to welcome Bruce Katz and Amy Liu who are directing the work at Brookings.
And of course herzlichen Wilkommen to the entire delegation, or they say in Bavaria, Grüß Gott!
In a few minutes, we will hear from Greg Fischer, the mayor of Louisville, Kentucky. Mayor Fischer, just yesterday, I was in your sister city of Mainz, a beautiful city situated along the Rhine.
Mayor Jim Gray from Lexington, Kentucky is also with us.
And we have a delegation from San Diego, from my own state of state of California .
Welcome to Bavaria, a land that people often compare to Valifornia, without the ocean, of course.
The basic tenet of the Global Cities Initiative is that cities need a new growth model. As Jamie Dimon, the chairman & CEO of JPMorgan Chase, and a creator of this program, says: “the future of humanity is a tale of cities. This is where the majority of the world’s population now lives, and the source from which almost all economic growth will come. We need to put capital and knowledge to work in partnership with local governments and businesses so that cities can invest in the kind of 21st century infrastructure and export capabilities they need to succeed in today’s global economy.”
The Global Cities Initiative combines Brookings’ expertise in fact-based research and the longstanding commitment by JPMorgan Chase to helping businesses connect to global markets. That commitment is an example of a new kind of corporate responsibility – one that I personally find very exciting and very important. In fact, much of the work of our Embassy is focused on building these kinds of connections.
The Global Cities Initiative was launched in March 2012 in Los Angeles, my home town. It was the first of a series of domestic and global forums, held in collaboration with metropolitan area leaders, to develop best practices for regional economic growth.
That first forum resulted in a study that showed that although the L.A, metropolitan area ranked first nationally in total exports, and was the nation’s number one port center, it was not taking full advantage of its many assets. As a result, the Los Angeles Regional Export Council was created to directly address the gaps within its export system and to foster a more export-oriented business culture throughout the region, particularly among SMEs.
I understand that this has been an issue for a number of the cities involved in this initiative: how to increase the number of export-ready firms.
I mentioned the work of our Embassy. On this issue, in particular, let me put in a plug for the Foreign Commercial Service, represented here today by Christina Sharkey, from our Consulate in Munich. With our SelectUSA initiative, for the first time, companies who want to do business in America have a single point of contact at the federal level to cut through red tape and help navigate national, state, local rules and regulations. That initiative is mirrored by the National Export Initiative/NEXT. It helps American companies reach more overseas markets by improving data, providing information on specific export opportunities, working closely with financing organizations and service providers, and partnering with states and communities to empower local export efforts. The good news is data shows those firms using federal and state trade services, such as NEI/NEXT and the Commerce Department’s Gold Key matching service, rated them very highly.
There is another aspect to this issue and it is one of the reasons why the Transatlantic Trade and Investment Partnership, which would create the largest free trade zone in the world, is so important. The most promising area for cooperation in T-TIP is in reducing the impact of the differences in our regulatory and standard-setting systems. The United States and the EU have the strongest regulatory protections in the world. But even though we achieve similar levels of protection in many, if not most areas, we often achieve those levels of protection through different regulatory routes, with different measures, and in a way in which those differences create obstacles to trade.
Due to often minor differences in regulations, a product built to high standards in the U.S. cannot be sold in the EU – and vice versa — without undergoing entirely separate testing. A great example of this is in the automobile industry.
Large firms have the resources to maintain multiple production lines – allowing them to serve markets with different requirements – but small firms often cannot. If we do it right, T-TIP will open the marketplace to businesses which have found the European market or the American market too complicated and too costly to enter. T-TIP will work to the advantage of businesses – both traditional and start-ups. It can open our marketplaces to a new burst of innovation; and it will create jobs in our cities. We still have a ways to go with T-TIP. Here in Germany, a number of myths have emerged regarding it potential impact – and we are addressing them, head-on.
Here is one myth and it is relevant to how cities work. Some fear that T-TIP will force municipal water districts in Bavaria to privatize. Not true – but if a municipality does decide to privatize, with apologies to tonight’s hosts, 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. Also not true. It is not even on the table for discussion – and as you can imagine, it would have as many objectors in the United States as in Europe.
What T-TIP will do is increase the momentum for innovation – which is the focus of this forum. You couldn’t have picked a better place to visit than Munich to seek out best practices on innovation strategies to strengthen advanced manufacturing. Munich is often referred to as the Silicon Valley of Germany. Bavaria is a model for how skilled – and highly paid – manufacturing can thrive in an advanced economy. Manufacturing here represents more than twice the share of employment here as it does in the United States. Bavaria’s emergence as the new center for industrial manufacturing in Germany is an amazing success story; and there’s a lot to be learned here.
This is an exciting time. Much of the world’s scientific and technical innovation takes place within and between the U.S. and the EU. By working together even more closely, we have the opportunity to accelerate the development of advanced technologies, and the industries that grew up around them. The recent announcement by President Obama and Chinese President Xi Jinping of new actions to limit emissions will surely also spur innovation in environmental technologies, an area where Germany and the U.S. already lead
I believe you also had discussions regarding how innovation can be supported by public-private partnerships. In this context, I hope you have had ample opportunity to learn about the German dual-model of vocational education and on-the-job training. Germany’s standard for vocational training for young people is so well-respected that President Obama gave it a plug in his State of the Union Address in 2013. It is certainly one of the reasons why youth employment is much lower here in Germany than in other countries in Europe, where youth unemployment is soaring.
Some cities in Germany are launching other kinds of initiatives to reach young people in alienated, under-served communities – communities that often have a strong immigration background. For the purposes of the Global Cities Initiative, to be globally fluent means having a high degree of global understanding, competence, practice, and reach that enables a metro area to adapt to all the promises of greater globalization while at the same time mitigating risks that it can bring. One of the risks is isolation, especially of young immigrants.
We need initiatives that teach global fluency, based on tolerance and integration, not only on the metro level, but also on the level of the city’s potential future leaders – its young people. Here, too, there is much that can be done through public-private partnerships and civil society. Civic elements create a positive atmosphere for industry and industrial growth.
To prosper, we all need to make our economies, our societies, and our people more globally fluent. This will make our communities more globally competitive. One thing is certain: status quo approaches will deliver status quo results. The global cities initiative has enormous potential. I am looking forward to learning more about the best practices that are being developed, discussed, and shared at this conference.
Again to all those who hosted the U.S. delegation, vielen herzlichen Dank.
And to the U.S. delegation, I hope that what you have seen and heard and learned here in Munich will be helpful, and that the relationships you are developing with your German interlocutors will continue long after your return home. I also hope you also have a chance to enjoy a little of the local culture here, which is wonderful. Sorry — you missed Oktoberfest — but there are many places in Munich where you can get a good beer year round.