Transatlantic Business Conference

Frankfurt, November 14, 2013
Ambassador John B. Emerson

Thank you, Bernhard Mattes.
Ulrich Grillo,
State Secretary Herkes,
Members of the AmCham and the Bundesverband der Deutschen Industrie,
Ladies and gentlemen,

It’s a pleasure and a privilege to participate in the seventh annual Transatlantic Business Conference.  I would like to thank the FAZ Institut, the Commerzbank, Deloitte and AmCham Germany for organizing and co-sponsoring this conference.

You all have a stellar reputation in the United States.

AmCham and its conference partners and their partners and members in turn are invaluable members of a transatlantic network that has for years stood for dialogue, discourse and dependability.  Everything I heard about your activities before I arrived nearly three months ago has been surpassed by what I have seen on the ground here in Germany.

You understand the issues that drive trans-Atlantic business relationships.  You also understand the need to grow that relationship; and why it’s important not only for the bottom line in pure business terms but also for the broader role that Germany and the United States, as allies, play in the world.  From the period following World War II through the Cold War, and then reunification to our collaboration today on everything from Iran to Syria to the Eurozone to climate change to human rights to counter-terrorism to negotiating what will be the largest free trade zone in the world, our partnership is crucial.

And on a personal level, during our two-plus months in Germany, I have been impressed not only by the warm welcome we have received from everyone, but also by the by the strong sense of partnership and the underlying hopefulness at multiple levels of German society.

Given that backdrop, I understand the distress that has been caused by the recent allegations regarding the NSA.  I have communicated the depth and intensity of the reaction to Washington; and these concerns are being taken very seriously.   And so let me take a moment to address what I call the elephant in the room of German-American relations.

Any relationship, no matter how strong, can go through difficult periods; and we’re in one of those periods now.  But we will get through this– and it is my great hope that our relationship will be even stronger at the end of the day.  Now, realistically, the pattern of leaks to various news outlets may well continue over time.  And so, I have been asking people to take a step back.  Every time there is another story, we have a choice: we can either stop in our tracks, wring our collective hands, and put a hold on all the other critical work we are doing together, or we can move steadily forward on all fronts – including the crucial issue of striking the right balance between protecting our citizens’ security, as well as their privacy.

One example of the significant and vital work we are doing together is the Trans-Atlantic Trade and Investment Partnership, or T-TIP.  The concept behind T-TIP is not new.  It represents ideas that we have talked about and put in practice starting with the Marshall Plan and the General Agreement on Tariffs and Trade, or GATT.  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 by Chancellor Merkel during Germany’s presidency of the European Union some 10 years later.  As partners, we have worked together to refine that postwar vision for the 21st century.  This conference was born seven years ago as a response to TEC.  From all that I have I heard from , it has been a valuable platform for very useful discussions on the many important and complex issues that are a part of the largest trade and investment relationship in the world.

As we prepare to take that relationship to the next level, the conference this year represents an important milestone.  As we speak, the EU and the United States are engaged in the second round of T-TIP negotiations in Brussels.

The goal is to complete the road map that we have been developing together over the past two decades since the completion of the GATT’s Uruguay Round and the creation of the WTO.

During the past 20 years, however, technological advances have transformed the business world.  Entire new industries have been developed.  And many non-tariff barriers to trade have emerged around the world.   Now, I know that many sectors of the German economy are doing well and the recovery in the U.S. is also growing strong.  Employment is improving and the energy sector is going through a renaissance as new technologies and innovations shape the market.  But we cannot afford to be content with the success stories of yesterday or even today.  If we are not pushing forward, we’re falling behind.

That’s why the opportunity presented by T-TIP is so important.  Together, the EU and the U.S. account for almost half of the world’s economic output and 40 per cent of global trade.  Ours is also the world’s largest investment relationship.

Just last week, President Obama hosted the first ever SelectUSA Summit in Washington DC.  1200 people from over 60 countries and areas all across the United States came together in Washington to discuss investing in the United States.  The conference was so successful that almost as many people had to be turned away as those that did attend. .  German companies represented the third largest group attending the Summit.  Those companies included both world-famous global multinationals and many less well-known small and medium sized enterprises that are the backbone of Germany’s economic success.  I note that some representatives of those German companies are here today.  My colleagues and I are grateful to AmCham for helping us recruit this impressive group.  German business leaders know that investing in the U.S. makes good business sense.  And by the same token, American business leaders know that investing in Germany pays off.  The benefits in terms of jobs are mutual.   But our mutual investment also includes a large percentage of research and development – on both sides of the Atlantic.  This is cutting edge research, that 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 that our shared values create the best path toward prosperity.  That is why I say that T-TIP can create a strategic, political and economic framework that as important in the 21st century as NATO has been in the second half of the 20th century.  So right now, right here in Europe, I believe we’re on the doorstep of a great transformation that could actually make trade more open, make markets more free, make competition stronger, and create more opportunity for jobs.

Now, as good as all this sounds, we know it won’t be easy: One of the biggest challenges we face negotiating and implementing T-TIP will be harmonizing 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 great meal here in Frankfurt or in my hometown of Los Angeles; 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 Assistant United States Trade Representative for Europe 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 thirdly, we can establish a framework, through T-TIP, to work out the tough issues that need discussion.  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 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; and then build on that consensus.  Second, mobilize the stakeholders.

In closing, this is my request to you.  I ask everyone in this room to take responsibility for advocating the successful implementation of T-TIP by the EU Parliament and the U.S. Congress.  I know we all agree that T-TIP is vital to Bavaria’s future economic prosperity in an increasingly globalized world.

We have all heard, even very recently, that leaders on both sides of the Atlantic support T-TIP – and by the way, for those of you who are still scratching their heads over the government shutdown last month, support for T-TIP in Congress is bipartisan.  Nevertheless, in terms of reinforcing the T-TIP message, there is no such thing as too little effort.

I discussed this with a second visitor to Berlin last week – Carla Hills, the USTR under President George H. W. Bush.  She stressed the importance of spreading the news.  And so when you go back to work this afternoon, consider how you can energize your colleagues, your employees, and your business partners.  One suggestion Ambassador Hills had was to figure out the percentage of employee paychecks that is earned from trans-Atlantic business.  And then let them know how important this is to them!  And then make the connection on the importance of T-TIP as an issue for EU parliamentarians – especially during the course of the 2014 campaign. And in my experience with the US political system, Congressmen “don’t read their mail; they weigh it.”  So that means that \ each and every one of us has to weigh in.

Another suggestion: talk about the positive impact of innovation, especially when you speak to young people.  California, my home state, is famously innovative with its Silicon Valley and Silicon Beach.  Since coming to Germany, I have made a point of reaching out to young innovators and entrepreneurs.  Their ideas are the seeds not only of the jobs of the future, but also the prosperity of our economies.  We owe it to our young people to implement a system that encourages innovation, ever keeping in mind values that will never go out of fashion: values like freedom, democracy, pluralism, rule of law, and basic human rights.

The responsibility that comes from freedom is the basis for these universal common values that we share.  Thank you for your commitment and thank you for your help.

Vielen Dank.