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Business at the Forefront -- Strengthening Competitiveness Through a More Seamless Transatlantic Marketplace
Frank Mermoud,
Special Representative for Commercial and Business Affairs
Remarks to the Eurochambres Congress Opening Session ("European Competiveness In A Global World")
Vienna, Austria
October 21, 2004 INTRODUCTORY SALUTATIONS:
- It's a pleasure to be in Vienna and to have an opportunity this morning to participate in this exciting discussion of competitiveness here in Europe and in a "global world."
- I would like to especially thank the Eurochambres (and President Christoph Leitl) for inviting me to address some of these issues with such an outstanding representation from leading business chambers from across Europe.
- And, it is a special honor to share this platform with such a distinguished group of government and business leaders from Austria, other EU member states, and the European Commission.
FRAMING THE ISSUE:
- Coming at this key topic from my own perspective as the U.S. Department of State's Special Representative for Commercial and Business Affairs, I would like to address some key developments, including an important, related U.S.-EU initiative, with a view towards the prospects for the exceptionally vast and dynamic transatlantic market.
- And, from the additional optic of my consultation on behalf of the U.S. Administration with the U.S. business community, I would like to touch from a business perspective on the need to spur economic growth, innovation, and job creation on both sides of the Atlantic, and some thoughts that we can usefully explore in this connection.
- These issues are very much on the minds of U.S. business groups, which frequently point out to me that they also have an enormous stake in what is happening in Europe, and often most notably in Brussels. Inevitably, they are also eager to learn what is going on between authorities in Brussels and Washington, which they likewise remind me can have a direct effect on their doing business.
- Of course we’re all experiencing a great deal of change and dynamism. It's too soon to speak authoritatively about the upcoming U.S. elections. But it is clear that the U.S. economy is strong and continues to grow (3.3 percent GDP growth in the third quarter).
- This positive economic outlook in the United States is once again attracting growing investment from overseas, and at the same time it continues to propel a robust flow of goods and services across the Atlantic in both directions.
- And, here in Europe there is clearly much happening, with the recent enlargement of the Union, the election of a new European Parliament, the appointment of new Commissioners, and consideration of a new constitutional structure for the EU. It’s an exciting and challenging time for Europe, and for America’s enduring relationship with Europe.
- The historic expansion of the European Union to 25 nations and 455 million people brings additional opportunities for strengthening our bilateral relationship, as well as for promoting prosperity including within the transatlantic market.
- Beyond the economic sphere, during the past couple of years, there clearly has been a great deal of ink spilt over the increasing complexities in the political and security dimensions of U.S.-EU relations – and for good reason.
- It has been, in many ways, a trying and difficult time. And we have to expect that we still have before us many more chapters in this evolution of the relationship, as Europe continues to develop its approach to common foreign and security policy, and as we each seek to address the menace of terrorism.
- Some of those future chapters may be every bit as tricky and uncomfortable as the most recent ones have been -- though I’m more than confident in the fundamental strength of this relationship.
- Naturally, the most critical element here remains our mutual commitment to open and frank dialogue and engagement in all areas in which we share a common interest, based on mutual respect and acceptance of legitimate differences in view and approach.
- What I wanted to underscore is that one extremely important lesson we’ve been able to learn from the past two years is this: the extraordinarily deep and broad economic linkages that exist across the Atlantic are an indispensable and very positive aspect of the U.S.-EU relationship. In this regard, there are a few key points that we need to keep clearly in mind. Among them:
- that millions of American jobs depend on European investment in the United States, and vice versa;
- that the shareholders of leading U.S. and European companies continue to reap enormous dividends from ever-expanding Trans-Atlantic trade and investment;
- that the U.S. and the EU have common objectives in the strengthening of the multilateral trading system – objectives that we have successfully advanced in restarting the Doha process in the WTO.
THE DUBLIN U.S.-EU SUMMIT: ADDRESSING THE ECONOMIC DIMENSION
- Our political leaders, clearly, have recognized that this economic dimension of the relationship requires both careful management and creativity. And that’s what we saw reflected in the declarations from the most recent U.S.-EU Summit held in Ireland in late June.
- President Bush, then-European Commission President Prodi and Irish Prime Minister Ahrens all acknowledged at the Summit that the U.S. and the EU are partners in the largest bilateral economic and commercial relationship in the world.
- U.S-EU trade and investment flows total more than $2.5 trillion a year. Or, to measure the intensity of relations in a slightly different fashion, it is not so surprising then that air traffic between the U.S. and EU accounts for about one third of all international flights worldwide.
- As our leaders also underscored in Dublin, the relationship has the potential to foster even more economic growth on both sides of the Atlantic at a time when the U.S. and Europe face challenges to increase productivity and raise living standards.
- And, in a global world, this Declaration clearly enunciates, Europe and the U.S. must also work together on the global economic stage. For, as the leaders further enunciated, liberalization of trade multilaterally remains critical to boosting global prosperity, generating sustained economic growth, and raising living standards.
- Importantly, in what I suspect has been an under-reported element of the Dublin Summit, our leaders issued a key "U.S.-EU Declaration on Strengthening Our Economic Partnership."
- In this major statement on transatlantic economic integration, U.S. and European leaders committed to “engage in a vigorous discussion of concrete ideas on how to further transatlantic economic integration to the fullest, spur innovation and job creation, and better realize the competitive potential of our economies and enterprises,” precisely the objectives that we are here to discuss today.
- The Declaration expresses mutual commitment to (quote) "policies producing strong and sustained economic growth to the mutual benefit of our citizens," and underscores the need for innovation to "bring improvements in productivity and stimulate more growth and higher levels of prosperity for our countries as well as other countries that rely on our markets."
U.S.-EU STAKEHOLDER EXERCISE:
- Finally, not satisfied to just leave this conversation in the government realm, the leaders purposefully called on stakeholders on both sides of the Atlantic to participate actively in developing new ideas for eliminating trade, regulatory, and investment impediments to further economic integration, and advancing new strategies for growth and innovation.
- And, who are these stakeholders? All of you in this room, your respective memberships, other groups such as think tanks, labor representatives, consumer groups, and other non-governmental organizations with interests in these areas.
- This process will offer a wide range of interested parties the opportunity to identify and put forward new possibilities for transatlantic economic integration.
- Officials will compile the recommendations, assess their viability and prioritize the ideas with the best potential for opening markets to present a forward-looking strategy to U.S. and EU leaders in early 2005.
- That process of stakeholder input has now begun, and – since I’m speaking to such notable stakeholders here today – I want to spend a moment discussing the opportunity presented by this summit initiative.
- In short, officials are looking for concrete, actionable ideas that will facilitate large amounts of trade while commanding the support of many stakeholders and political leaders.
- And, so that’s where European and American businesses enter the picture, particularly as represented by such key groups as the Eurochambres and the various national chambers of Commerce and other business groups.
- On my side of the Atlantic, the U.S. Chamber and other private sector groups, including U.S think tanks and civil society organizations, have already been involved in initial meetings at the State Department and elsewhere to give impetus to this initiative.
- Additional meetings to elicit input from such groups are planned in a number of major U.S. cities.
- Themes that have begun to emerge from this early discussion include the importance of an integrated capital market, regulatory convergence, the role of innovation, intellectual property rights protection, education and labor mobility.
- Several groups, including the Transatlantic Business Dialogue, the Transatlantic Partnership Network and elements of the European and U.S. Chambers of Commerce, have put forward useful ideas in the past year highlighting concepts such as a single regulatory market and focusing on key sectors such as telecommunications, the digital economy, air transport, financial services and competition.
TOWARDS A MORE SEAMLESS TRANSATLANTIC MARKETPLACE
- What we really need from the key stakeholders -- and business is certainly a key stakeholder -- is to help us define what it is about this big, mostly very successful economic relationship that can be improved upon. Where should our attention as policymakers and regulators of economic activity be directed?
- This is a very broad question we’ve posed, and I recognize it’s a tough one to grapple with. It raises a lot of subsidiary questions:
- Should we be thinking, for instance, about some sort of free trade arrangements?
- Or are the issues we need to address largely ones that would fall outside the scope of a “conventional” FTA?
- With most industrial tariffs already relatively low as a result of the multilateral trade negotiation process, should we instead be identifying specific economic sectors or areas of regulatory activity that seem to present especially strong prospects for further integration or where government action can spur new efficiencies or unblock existing impediments?
- Other suggestions include single-sector agreements, such as in services where protection is still relatively high, or strategic sectors like telecommunications or automobiles, which would involve issues that cut across the marketplace.
- In telecommunications, we should also look at how to work together to share the benefits of new technologies with the rest of the world. The key to this is the creation of telecommunications regimes that allow for the development of competitive markets because the best way to foster new technologies is through market-driven solutions.
- Or, in the area of transportation, in a post-911 world, there may be more we should be doing to ensure low-cost, efficient, and safe transatlantic civil aviation and shipping. The U.S. and the EU, for example, could potentially build on the work of the G-8 to foster a system in which cargo transport flows as safety and efficiently as possible.
- And, what about new initiatives related to research and development? Are there things we could be doing together on some of the innovative technologies cited in the U.S.-EU Dublin Declaration such as "information, communication, hydrogen energy, pharmaceuticals, and other health-related products" that would provide new impetus for their development?
- Likewise, touching yet another area highlighted in the Dublin Summit declaration, what might be done to reinforce our commitment to the protection of intellectual property rights, recognizing their fundamental and growing importance to the creation of innovative products, services, and technologies in our economies.
- And, not to limit this, how should we be thinking about the growing investment dimension of the relationship? Shouldn't it get as much attention as conventional concepts of trade?
- Again – we don’t have answers, or even preconceived positions, on these matters. That's why, on the U.S. side, we are working to ensure an interactive process of engagement through the stakeholder consultation sessions in different cities that I mentioned, and we’ve also solicited written input from stakeholders.
- We hope to wrap up this “listening” process late this fall, and then to formulate some conclusions that we can discuss with our partners in the EU institutions.
- We understand that the European Commission has recently launched a fairly similar outreach exercise on this side of the Atlantic.
- My proposition this morning is for you and your representative organizations to put your formidable experience and brainpower to work. Help us define some exciting new concepts for where we can take this most important economic relationship in the world.
- We imagine, obviously, that you – as European groups -- will focus your efforts towards a response to the outreach exercise being conducted by the EU institutions. But I’d like to note that we’d be very happy to receive any views you may wish to deliver as well to our own U.S. mailboxes.
CONCLUDING THOUGHTS:
- To sum up, here’s what I think that our leaders were saying in that Summit declaration: “We know how important the U.S.-EU economic relationship is. We also know that it’s a terribly complex relationship, and that there’s much more that we can and should do to bring about a deeper and richer integration. But we, the political leaders of the U.S. and the EU, don’t have all the answers about what really needs to be done, or in what order of priority. And so we need some help figuring this out.”
- This initiative, in spite of its current low profile, holds a great deal of promise for the future of our relationship. With help from people like you – people who have a real stake in the Trans-Atlantic marketplace – I’m confident we can produce something quite exciting and results-oriented, which can have a positive effect on markets both in Europe and the United States.
- And, more broadly, our economic partnership can continue to thrive as we work together both bilaterally by exploring the best paths forward towards a more seamless transatlantic economic partnership and multilaterally in the WTO Doha Agenda negotiations.
- Because, of course, our economies will prosper faster and further as the global economy grows as a whole.
- That's why we remain committed to negotiating multilaterally market access commitments and strengthening rules as embodied in the WTO Doha Development Agenda negotiations.
- To achieve this, we in Washington are continuing to work with our European and other trading partners to reach a successful conclusion of the negotiations in Geneva, based upon an ambitious and balanced outcome that takes into account the needs of developing countries. And, for this process to succeed in a global trading system, it is important to ensure that the poorest countries are not left behind.
- So, another area where business can help on both sides of the Atlantic is to register clearly and unhesitantly its support for pursuing these negotiations with the full vigor and determination that they merit.
- In conclusion, what is incontestable is that trade and investment remain at the core of the transatlantic relationship.
- Accordingly, to maximize opportunities for the mutual benefit of our citizens, together we must continue to look for cooperative means and best practices to enhance economic growth, job creation, and innovation, in particular to the most dynamic sectors of our economies.
- There is strong commitment to this by President Bush and his administration.
- Thank you for listening. I look forward to our discussion.
[End]
Released on October 21, 2004
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