The United States and Europe: Indispensable Allies in a Changing World

Berlin, February 4, 2014
Ambassador John B. Emerson

Vielen Dank, Udo Marin.  Danke, Ambassador Richter.  Meine Damen und Herren, es ist mir eine grosse Ehre, mit den Mitgelieder vom VBKI (Verein Berliner Kaufleute und Industrieller) zusammen zu sein.  Besonders in dieser nicht ganz einfachen Zeit, ist es sehr wichtig, unseren Dialog über unsere vielen gemeinsamen Interessen fortzusetzen.

Accordingly, I appreciate the opportunity to speak with you today about the importance of a strong 21st century trans-Atlantic partnership.  I am just back from the Munich Security Conference. It was my first time, but this year marked the 50th anniversary of this annual meeting of trans-Atlantic – and increasingly world – leaders. The first Wehrkunde Conference was founded at the height of the Cold War.  It was a way for trans-Atlantic partners to hold serious conversations about the messy, dangerous, often morally problematic, but absolutely essential business of building and managing security in a world armed with a frightening array of nuclear weapons and underlying policies of ‘mutually assured destruction.’

Once again, this year, leaders from government, NGOs, and think tanks came together to discuss the challenges – and the opportunities – before us today.  Consider how much our world has changed since 1963.  Thankfully, we managed to keep the essential peace through those years and finally bring an end to the Cold War.  The world today is more secure, prosperous, stable and free than it was 50 years ago; and today’s Germany is a role model: exactly what 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. President Gauck’s very eloquent and compelling speech in Munich was testimony both to the importance of the values we share across the Atlantic and the responsibility they entail.

The advance of freedom that has occurred over the past fifty years has improved the lives of tens of millions of people.  It has made our friends, old and new, stronger and more self-reliant.  The “East-West divide” is slowly dissolving, with the West increasingly looking East.  And instead of an almost permanent “North-South divide” between the developed and the poorer countries, today, as Ambassador Richter can tell you from his time in India, we seek to deepen our engagement with emerging markets and developing economies.

The global economy has tripled over the last two decades.  Emerging markets have accounted for almost half of that growth, and this has been good for both the United States, for Europe, and of course for Germany, as we export goods and services to the developing world.

The Cold War concerns that dominated the second half of the 20th century have evaporated.  Nevertheless, today, the challenges we face can also be messy, dangerous – and most often with no easy answers or simple overarching strategic framework like ‘containment’ during the Cold War.  It is essential that we continue to talk calmly and seriously about how best to manage the complex global parameters of our world.  We resolved the crises of the Cold War.  We certainly should be able to untangle today’s dilemmas.  Back then, the problems were measured in megatons.  In today’s digital world, it is megabytes.

And so, of course, we need to continue our conversation regarding the profound concerns arising from the recent NSA disclosures.  I fully understand the distress that has been caused here in Germany by these disclosures.   And I understand the differences between the experiences of the German people, especially from 1935 to 1989, and the recent experiences of Americans after 9/11, as well as their impact on our respective attitudes towards intelligence gathering.  I can assure you that the concerns of Germany, Europe and in my country are being taken very seriously, at the highest levels of the U.S. government.

Fully re-building trust will require sincere efforts and hard work.  President Obama outlined some of the changes that will be made in U.S. intelligence activities earlier this month, as a result of the comprehensive review that he ordered last year.  In ordering this review, his goal was to ensure that information is collected because it is needed, and not just because technology makes it possible.  Consequently, he announced significant changes that will strengthen the executive branch oversight of intelligence activities; insure that privacy concerns are advocated within the Foreign Intelligence Surveillance Court; modify the manner in which metadata is collected, stored and used; insure that we work with our friends and partners in a manner respectful of that relationship; and, in an unprecedented step, extend certain protections that American citizens enjoy to people overseas.

Secretary of State John Kerry discussed these issues in more detail with Chancellor Merkel and Aussenminister Steinmeier last Friday here in Berlin. Discussions are, however, ongoing – within the Administration, in Congress, and between the senior levels of our respective intelligence services – about how to strike the right balance between protecting our security, on the one hand, and protecting our personal privacy and liberties, on the other.  And let me make clear that we understand that the tapping of a Chancellor’s phone has nothing to do with combatting terrorism.

But make no mistake: we are confronted by a different assortment of weapons than during the Cold War, less overtly lethal, perhaps; but they are potentially just as destructive of the ways in which we all work, travel, and live our lives.  Our adversaries are very skilled at using technology to accomplish their objectives – and not only within the area of terrorism, but in cyber-attacks against our financial exchanges, air traffic control systems, or even, through massive identity theft, our personal credit cards and bank accounts.

The digital world opens up great opportunities for personal and economic development, but it also has become the vehicle used by those who seek to do us harm, to recruit, to train, plan, and attack.   The reality is that since 9/11, the efforts of our collaborative intelligence gathering efforts have thwarted numerous such attacks, including some on German soil.

Striking the right balance between security and freedom is not a zero sum game.  Strengthening one actually protects and enhances the other.  And this is a much bigger issue than the NSA.   As Minister de Mazière said the other day, you could eliminate the NSA, and the problem would still be there.  Germany, Europe and the U.S. each need to define what we seek to accomplish by regulating digital activity, taking into consideration the nature of business, security, and privacy concerns, while keeping in mind the fundamental, transformational characteristic of the Internet: to allow anyone to communicate, with anyone else, anywhere in the world, at any time.  How do engineers, scientists, and business practitioners think this will evolve over the next two or three decades, and how should we respond to those anticipated developments?  Germany, Europe, and America must ask these questions, and then work on the solutions together.

On this broad issue, let me address one final aspect: and that is the concern, recently raised in the press, that the United States may be conducting industrial espionage, in particular here in Germany.  As President Obama said in his remarks on U.S. intelligence programs earlier this month: “We do not collect intelligence to provide a competitive advantage to U.S. companies or U.S. commercial sectors.”  But what we do do – and that’s part of why I am here this evening – is exchange opinions, conduct research on economic and industry trends, and examine issues ranging from trade, investment, development, entrepreneurship and innovation.  Every Embassy has an economic unit, and working with the Departments of State, Treasury, Commerce, Labor and Agriculture, we analyze local, regional and global economies, as well as industry sectors within those economies; and the information we develop, whether on projected crop yields or trends in manufacturing and international trade, is frequently made publicly available.  Indeed, this approach has helped to make the trans-Atlantic partnership successful.

That is why it is essential that we re-build the trust that has been shaken. Friends can disappoint one another; friends can disagree; but when that does occur, we must work hard to get through it, thereby protecting this German-American friendship that has grown over so many decades.  We share a common heritage, with 65 million Americans having German ancestors.  We share family relationships; many of the American service men and women who were based in Germany married Germans, and their children were born here.  We share a common love of culture, with much of classical literature and music coming from Germany, and much of popular culture – fashion, music, television and film content, and art – coming from America.  And we share the common values that undergird the long-standing trans-Atlantic relationship.

We will get through this, because we must.  Our collaboration today will determine our ability to deal with the challenges of tomorrow.  I am talking about jointly confronting issues such as the proliferation of weapons of mass destruction; the challenges posed by the Arab Spring in northern Africa and the Middle East; understanding the changing dynamics in Russia, and the states of the former Soviet Union; and preparing for the inevitable changes in the economies of China and southeast Asia.  And I am talking about global warming and climate change, the need to transform our sources and uses of energy, and, as mentioned earlier, the important decisions that need to be made about how to respond to the rapid advances in the digital world.  But I am also talking about how we can strengthen our economic partnership.  I believe we can ensure that prosperity will be as emblematic of the 21st century as security was of the last.

And we have before us a great opportunity to do just that.  The Transatlantic Trade and Investment Partnership, or T-TIP, will not only create the world’s largest free trade zone, it can also serve as a framework for the codification of Western values such as freedom, rule of law, protection of intellectual property rights, transparency in commercial dealings, and respect for the environment and employees.

It will cement our way of doing business as the world’s gold standard.  Imagine what happens when you take the world’s largest market and the world’s largest single economy – also, by the way, the two most innovative economies in the world – and you marry them together, reinforcing these shared principles and values.  If we’re ambitious enough, T-TIP will do for our shared prosperity what NATO has done for our shared security, recognizing that our security has always been built on the notion of our shared prosperity.

Nevertheless, there are concerns about T-TIP.

First, some ask, “We’re doing pretty well, why do we need it?”  Domestically, in Germany, 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.  In this fast changing world, if we’re not moving forward, we’re falling behind.

Second, 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 economy throughout Germany.

Now, it is no wonder that global players in the German corporate world support an ambitious far-reaching agreement.  In the automobile industry, eliminating tariffs on imported cars could mean an extra 300 million Euros each year to BMW alone.  But remember this: the more cars, aircraft, machine tools, or other high value manufactured goods that are sold, the greater the benefit to their suppliers, many of which come from the Mittelstand.  More broadly, any reduction in tariffs as a result of T-TIP will bring immediate benefits to consumers, including lower prices and greater choices in the market.

Of great significance to these negotiations are the non-tariff barriers to trade that have emerged over the last several decades, 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 often cannot afford to do that.  And all businesses will benefit from regulatory convergence by saving money on duplicative testing, legal analyses, and conformity assessments.

This also holds true for more traditional economic sectors, such as agriculture.  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.  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.  And if we’re serious about the need to feed the world and confront starvation, or dramatically reduce the use of pesticides that poison our ground water, we have to approach food production from the basis of science, and not myth driven fear.  We have been able to reduce regulatory barriers to trade without undermining consumer safety in all of our previous trade agreements, including those related to the production of organic food, and we can do the same with 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.  Harmonizing or jointly recognizing standards on either side of the Atlantic will not result in a reduction of consumer safety.  Speaking for my country, I can assure you that we are not interested in being part of any race to the bottom.

The benefits of TTIP, or any trade agreement for that matter, are not self-evident.  It will be up to us, whether we are addressing others in the business community, members of the European Parliament, our employees or the public in general, to explain the benefits, in real and concrete terms, of increasing trans-Atlantic trade.   And I look forward to our working together to do just that.

At the end of the day, one of the main objectives 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 18 year old who is trying to enter a tight job market without any real qualifications or experience and the young entrepreneur, perhaps from Berlin’s Silicon Allee, who might be the world’s next Steve Jobs or Bill Gates.

As I said earlier, 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.  These values are reflected in society both 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 the friendship of our people.

One of the most meaningful moments of the Munich Security Conference was President Gauck’s speech about Germany’s role in the world.  Our mutual challenge is to ensure opportunity, security, and liberty for Americans and Europeans, but also for people in other parts of the world who look to us for that possibility.  We can do this by renewing our partnership and living up to the legacy of the world’s strongest alliance, that between the nations of Europe and the United States.

We know that the road ahead 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.

In the trans-Atlantic relationship, even as we have experienced what many believed to have been impossible just fifty years ago, there has always been a foundational belief in peace and prosperity, and freedom and democracy. So let us re-dedicate ourselves to re-focusing our cooperation, improving our communication, and strengthening our partnership for decades to come.

Vielen Dank.