Transatlantic Innovation Trends – How to Inspire a Culture of Opportunity

Transatlantic Innovation Trends – How to Inspire a Culture of Opportunity
114th AmCham Annual Membership Meeting
Frankfurt, May 19, 2017
CDA Kent Logsdon


Thank you, Bernhard Mattes, Eveline Metzen. Honorary President Fred Irwin.
Ladies and gentlemen,

it is an honor to greet the members of the American Chamber of Commerce at this your 114th annual meeting.

I am quite certain that next year at the 115th annual AmCham meeting, you will all have met and had the opportunity to become well acquainted with a new Ambassador.  In the spirit of full disclosure, let me tell you that we do not have a timeline for a new Ambassador – or even a name yet.  So I’m afraid you will be stuck with me for a while longer.  I would also like to take this opportunity to introduce you to the new head of our Commercial Service offices in Germany (as well as the broader central-European region), John McCaslin.

We have a close relationship with the AmCham at all levels, and my colleagues and I at the Embassy and our five Consulates thank you for your cooperation.  We value your support.  The transatlantic partnership plays a strong and dynamic role in both the global economy and international security.  It is crucial that we do all that we can to help American and German companies meet the opportunities and the challenges of these changing times.  AmCham Germany, representing the interests of American firms located in Germany as well as those of German companies with investments in the U.S., plays a crucial role in explaining what companies need to succeed – and why.  Given the importance of our relationship, we count on AmCham to be a strong partner and advocate for promoting U.S. investment in Germany and expanding trade.

Eveline, we look forward to working with you and expanding our cooperation with AmCham.  The theme of this your first annual membership meeting is well-chosen.  We too are interested in encouraging a culture of innovation, and sharing and implementing best practices.

Bernhard, Eveline, I would like to thank you for your flexibility and continued readiness to meet with U.S. government visitors from DC.  Just last week, you generously hosted a reception for a bipartisan congressional delegation, headed by House Democratic Leader Nancy Pelosi and Congressman Jim Sensenbrenner.  Democrats and Republicans in Congress don’t always agree, but there is consensus on the importance of the transatlantic relationship.  That was quite obvious from our discussion last week.  The delegation’s visit was also an indicator of the continued close cooperation between our governments – at all levels.  Germany’s role as host of the upcoming G20 Summit next month will highlight our cooperation on a diverse range of global issues.  Our Secretary for Health and Human Services Tom Price is in Berlin today for the G20 Health Ministerial.

U.S. Labor Secretary Alexander Acosta is also in Germany now to attend the G20 Labor and Employment Ministerial Meeting that’s taking place as we speak in Bad Neuenahr.  And, in fact, Secretary Acosta will speak at a dinner hosted by AmCham on the occasion of this Annual Meeting later tonight; and I am sure he is looking forward to that.  Promoting inclusive economic growth and addressing inequality are the key themes of Germany’s G20 labor and employment agenda.  One of the key focus areas is shaping the future of work.  The digitalization of the economy is a significant challenge for workers in the coming years, and it is important that we approach this structural change now – and not later.

Germany’s century-old “duale Ausbildung” apprenticeship model is widely recognized for its success in sustaining the highly qualified and productive German workforce, one of this country’s key strengths in a globalized economy.  Many countries, including the United States, are interested in learning from the German model.  And German companies in the U.S. are also increasingly implementing this type of vocational training at their facilities, especially where they face challenges with finding skilled workers.  Given the interest in vocational training on both sides of the Atlantic, Germany and the U.S. signed a bilateral agreement for bilateral cooperation in 2015 to foster the exchange of ideas and address obstacles to the business-driven expansion of German-style apprenticeships in the United States.

The ongoing nature of the bilateral cooperation in this area was highlighted by the participation of President Trump and Chancellor Merkel at a roundtable discussion with German and U.S. CEOs during their first meeting at the White House in March.  During the roundtable, President Trump said, “Germany and the United States have an incredible opportunity to deepen our partnership as we continue to develop a strong workforce in both of our countries.”

And we are indeed stepping up cooperation in this area.  The roundtable at the White House was a first step.  Last month, First Daughter and Advisor to the President Ivanka Trump followed up on the discussions with a site visit to the Berlin Siemens training center while she was in Berlin to attend a W20 meeting convened by the Chancellor.  She had a chance to hear directly from apprentices why the program was the right choice for them and how they are already making important contributions to the company as apprentices.  When Commerce Secretary Ross met with BDI Chairman Dieter Kempf recently, he told him that the United States should adopt Germany’s workforce development model to ensure that we have the “workforce of the future.”  Labor Secretary Acosta visited BMW in Munich earlier this week to learn about their apprenticeship program, and he and his fellow labor ministers are addressing this issue today.

And at the Embassy and our Consulates, we coordinate regularly with officials, companies, and industry associations – including AmCham – to develop new areas of cooperation to further build on efforts to maximize the opportunities created by innovation and technology.

Manufacturing is one of the areas that have been identified as crucial for the international economy.  It will evolve and benefit extraordinarily from the usage of the Internet as a communication and operational platform.  The emergence of advanced manufacturing heralds a future where products are designed and produced more quickly, safely, efficiently, and inexpensively; more energy efficient; and more customized to an individual’s needs and demands.

Challenges for the involved industries and supporting governments are the definition of reference architecture and frameworks necessary for interoperability, and how to build confidence around new and innovative approaches to security.  In April 2016, the two major international players, the International Internet Consortium and the German-led Industry 4.0, agreed to collaborate for the benefit of interoperability of systems from the different domains.

Our bilateral discussions with Germany include a host of digital policy issues.  One common theme in these discussions is the desire on the part of the United States to create opportunities for our companies through an open digital economy rather than advancing policies that, in practice, are protectionist and favor particular companies.  There are challenges, but there are even more opportunities for both U.S. and German companies.  Robotics, 3d-printing, next generation metals manufacturing, the commercialization of advanced power electronics and many more sub-sectors that fall into the definition of advanced manufacturing are areas where the U.S. has something to bring to the table and can work productively with German partners.  The digital economy creates exciting and new potentials for our companies in sectors we cannot even contemplate now.

There is also enormous potential in digitization and advanced manufacturing for trade and investment.  Current transatlantic cooperation, skill-sharing and capacity building is an important way to protect future long-term domestic and international economic growth for countries on both sides of the Atlantic.  Here, there are some best practices that European countries can learn from the U.S.  The U.S. leads Germany, for example, in commercializing technology by an ever growing gap.  One thing, however, is certain.  Advanced manufacturing includes a variety of sectors that are ripe for our companies.  They provide opportunities for job creation.  They also already represent a large part of U.S. and German exports.

And on the issue of exports and trade let me be clear: the United States supports free trade and Germany continues to be an indispensable partner for the United States.  The deep and mutually beneficial trade and investment relations between U.S. and German firms are vital to both our countries.  We know that companies that are engaged in importing and exporting on average pay better wages than those that do not engage in trade.  And a hallmark of our two economies’ extra-ordinary inter-connectedness is the fact that subsidiaries of German companies have created nearly 700,000 jobs in the U.S., and the same holds true for U.S. companies in Germany.  Our strong relationship is essential for global economic growth.  Robust trade and investment are essential for our economies, and are, in turn, critical for international security.  A strong and prosperous United States is good for Germany and the world (and vice versa).

But trade has to be fair and, for that reason, President Trump has made reviewing U.S. trade policy a priority.  With this in mind, he has asked Commerce Secretary Ross to lead a review of our trade relationships.  He has initiated an analysis of trade in goods deficits with a number of our major trading partners, including Germany.  There was a public comment period earlier this month, and a public hearing took place at the Department of Commerce only yesterday.  A final report is expected by the end of June.  It will evaluate a wide variety of potential causes for a trade deficit, from tariffs, non-tariff barriers, subsidies and intellectual property rights to historical savings, investment and capital flows, plus the issue of chronic overcapacity in some sectors and the challenge of effective enforcement of existing trade agreements and rules.

We look forward to working with Germany and our other leading trading partners to address these and other challenging issues.  Our two countries share a clear and common interest in addressing unfair trade and investment practices in countries around the world.  As world-renowned innovators, just as our companies require and rely on well-trained and productive workforces, they also require and rely on stable investment environments and strong intellectual property and investment protections.

Finally, last week in a bipartisan vote, the Senate confirmed the appointment of Robert Lighthizer as U.S. Trade Representative.  In his confirmation testimony, Lighthizer called for an international trade system that functions the way it was negotiated.  He said that the United States must be ready to work with like-minded trading partners to ensure fair trade and to encourage market efficiency.  He also complimented the work of the former USTR, saying that Ambassador Froman and his team had done a remarkable job in a variety of areas, and that we should take advantage of that work.  While we don’t yet know whether formal trade negotiations between the U.S. and Europe will be on the agenda, one thing is certain; we should indeed take advantage of the work that we did on T-TIP and apply ‘lessons learned’ as we develop and implement policies together that grow our economies, and that ensure trade is free and fair.  This is the best way to foster prosperity and uphold security on both sides of the Atlantic.

In the same context, while the relationship between Europe and the UK is a decision for those parties to make, we believe that it is important that the UK and EU maintain strong ties. We need both a strong UK and a strong EU, and hope to see a Brexit process that minimizes economic disruptions and ensures continued stability in Europe.

It is no secret that many Americans and Europeans feel left behind by developments of the last twenty or thirty years.  Whether this is a result of globalization or technology, the world has changed dramatically.  Governments need to address the concerns of their citizens.  Working together, the United States and Germany can make constructive contributions towards addressing these concerns.  As President Trump said after his meeting with the Chancellor, “Our alliance is a symbol of strength and cooperation to the world.”

At the fourth annual SelectUSA Investment Summit next month in Washington, companies will have the opportunity to learn how the Trump Administration is planning to make the United States an even stronger trading partner and investment destination.  It is the most important event of the year regarding foreign direct investment in the United States – and it is particularly important this year.  I know President Trump and Commerce Secretary Wilbur Ross will be thrilled if AmCham companies and their partners are there.

Business ties are not built just on economic equations but also on close personal relationships, on dialogue and on a free and open exchange of ideas.  These are the ties that bind.  They are enduring, and they are vital to the future of our two nations and the world.

And so, all the best for a successful conference.  I hope all of you leave this meeting inspired and excited to work together to reinvigorate AmCham Germany.  There is a lot to discuss; and you have a very interesting and ambitious agenda.  Thank you all for your commitment to the strength and potential of the German-American relationship.