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“The German-U.S. transatlantic partnership” (Check against delivery) Mr. Donohue Prof. Dr. Feddersen Mr. Staudt Dr. Oetker Ladies and gentlemen: I would like to begin by thanking you on behalf of Minister Glos for the invitation to this second conference on U.S.-German economic relations, which is being organized jointly by the Dräger Foundation and the DIN Institute, the Federation of German Industries and the U.S. Chamber of Commerce here in Washington. Minister Glos regrets that he is unable to be here with you today, and he passes on his best wishes. When he asked me if I could represent him at this event, I was very happy to agree. As a member of the Bundestag, I have already visited Washington on several occasions. I have always had a most interesting time here in this city. I also greatly enjoyed our evening yesterday up on the roof deck of the Hay-Adams Hotel, with its wonderful view over the White House and many other important buildings. Ladies and gentlemen, Let us move on to my subject: I believe that the basic theme of this conference – transatlantic relations – is extremely important. And I believe that the format for these two days is well-chosen. Germany and the United States of America are linked by a closeness at many different levels, a closeness which finds particular expression in our shared fundamental democratic values and convictions, our historical experience and our cultural traditions. The new German Government is aware of this. For example, the coalition agreement between the CDU, CSU and SPD states: “We want to shape transatlantic relations in a way that looks to the future without forgetting our shared history. For this, close, mutual trust between the U.S.A. and a self-confident Europe which sees itself as a partner, not a counterweight, is essential.” I repeat: Germany aims at a close and trusting relationship with the United States of America. America should know that, in Germany, it has a reliable partner in Europe. “That does not” – as the Coalition Agreement goes on to say – “rule out the possibility of differing views, which must be dealt with in a dialogue based on partnership and in a spirit of friendship.” The visit by Chancellor Merkel to President Bush here in Washington in January was a most promising start towards this. When she was here in January, Chancellor Merkel described the aim of the new Government to President Bush as follows: “To start with, we want to do our homework: we want to strengthen our economy. We are facing the challenges of globalization and need a strong economy if we are to cope. Beyond this domestic aspect, Germany would like to be a reliable partner for our friends in Europe and the world – and particularly for the United States of America.” In a few days’ time, Minister Glos will be here on his first visit as Minister to discuss these issues in greater depth with his American counterparts. And the second visit by the Chancellor planned for early May clearly highlights the desire of both sides for continuous and close co-operation. The political and economic challenges we are facing today cannot be coped with by any one side on its own. This is true whether it is:
Ladies and gentlemen, I would now like to say a few remarks about German-American economic relations. For the United States, Germany is the leading trading partner in Europe; in the other direction, the United States is Germany’s leading trading partner outside Europe. Last year, for example, the volume of trade between our countries amounted to around 140 billion dollars. Thanks to numerous examples of investment by nearly 3,400 German firms in the U.S.A., and by more than 2,000 American companies in Germany, our economies have not only grown more prosperous, but have also become increasingly interwoven. After all, German firms provide some 760,000 jobs in the U.S.A., and U.S. investment safeguards more than 450,000 jobs in Germany. However, there are considerable disparities between the levels of economic growth in the two countries. Whilst in recent years the U.S. side has seen continuous economic growth, the economy in Germany has stagnated for various reasons. However, this year Germany’s economic barometer is looking more positive than it has for a long time. In recent years, the driving force in the German economy has clearly been foreign trade. It creates a substantial proportion of our GDP, and Germany has been and still is a world leader in this area. The German Government supports German exporters by continuing to battle for open markets and competition. In addition to this, we wish to extend the focus of our foreign trade and investment to increasingly include small and midsize firms. The Government’s Annual Economic Report presented two months ago by Minister Glos highlights the key issues of the coming years: growth and higher employment. In order to achieve this, we need a strong stimulus from innovation and investment. To this end, the Government has put together an investment package totaling 25 billion euros – or more than 30 billion dollars. To encourage domestic and foreign companies to invest more in Germany and to create new jobs, we will modernize our tax system and make it more internationally competitive. “Creativity” and “research and development” are key issues to make Germany fit for the future. For this reason, we will boost the level of spending on research and development in several steps from 2.5 to at least 3 percent of GDP by 2010. In particular, we will improve the environment for innovation in the fields of biotech and genetic technology, information and communications technology, chemicals, medicine and pharmaceuticals, and in energy and transport. I would like to address energy policy specifically, as it is a significant factor for commercial activity. High energy prices reduce real incomes, restrict the opportunities for other expenditure, and raise the production costs of business. For this reason, one of the aims of our energy policy is to promote growth. After all, our energy supply must be sufficient at all times at internationally competitive prices if it is to safeguard investment and jobs. The development of highly-efficient conventional power stations with zero emissions is a particular technological challenge here. Ladies and gentlemen, We need efficiency at home if our country and its companies are to perform well on the international stage. What can the German Government do – both nationally and in Brussels – to foster more growth in the transatlantic economic area? We look to this conference to provide (a lot of) fresh ideas and to show the way forward. Let me try to respond to the main question asked by this conference:
My answer is: the transatlantic marketplace already exists. At the end of February, U.S. Trade Representative Robert Portman and EU Trade Commissioner Peter Mandelson engaged in a very fruitful exchange of views here in Washington, and they again stressed the significance of transatlantic commercial relations – despite some undeniable differences on trade policy. Robert Portman put it like this: “While the United States and the European Union will disagree at times, we have a healthy transatlantic trading relationship of almost $ 500 billion a year, investments of over a trillion dollars and a strong bond and a common history.” At last year’s summit meeting between the European Union and President Bush, a joint economic initiative was adopted by the European Union and the U.S.A. We should remember that the substance of this economic initiative is based on the results of so-called “stakeholder consultations”, that is to say surveys of civil society, including commerce, which were held on both sides of the Atlantic. The aim of this economic initiative is to improve the competitiveness of Europe and the United States by way of enhanced co-operation in key economic fields. This includes areas like
Further progress has now been made in the talks between the EU and the U.S.A. At the end of last year, we agreed on a joint practice-oriented program of work. Let me mention a few examples which we intend to sort out in a reasonable period of 2 to 3 years, in order to come closer to the ideal of a barrier-free transatlantic economic area.
It is high time for Europe and the U.S.A. to work jointly and strategically together to ensure that other players also keep to the rules of world trade. Better protection for intellectual property rights on the international markets is of the utmost significance for our companies. Much greater emphasis needs to be placed on the enforcement of patent protection. [I shall be actively taking up this issue once again at this year’s Chinese Government forum on copyright, which will be held in Peking on 26 April to mark World IP Day. It may be that Europe and America will need to exert a certain degree of pressure on the relevant governments to encourage compliance with internationally recognized rules! At this year’s summit meeting between the European Union and President Bush in Vienna at the end of June, we want to be able to report on specific progress which promises practical benefits for business within a reasonable timeframe. In our globalised world, such well-functioning partnerships are becoming increasingly significant. Ultimately, this is also a logical outcome of a changing environment. Powerful players have come onto the world economic stage, particularly China, and others are ready to join in the race, such as India. Ladies and gentlemen, The organizers of the conference have posed the question: “Do we need an improved/new framework?” The German Government’s answer is clear. We share the view of the European Commission and the U.S. administration that the main need is to make progress on precisely defined individual fields of economic co-operation with the U.S.A., as I have just described. We believe that this is the most practical way to achieve permanent improvements in the transatlantic marketplace. In contrast, the oft-called-for transatlantic “trade and investment agreement” would send the wrong signal to the ongoing Doha Round of the World Trade Organization. If all of the contentious issues were also being negotiated in a parallel agreement at the same time, the outcome would probably be a mutual blockade. Ladies and gentlemen, I would like to conclude with a few comments about the WTO, a subject also mentioned in the conference program. It proved possible in Hong Kong last December to avoid a failure like in Cancún or Seattle. And that is good, because it keeps the road clear for a successful conclusion. The basis for the agreement at Hong Kong was provided by the EU with its agreement to a final date for the phasing out of export subsidies for farm products (the end of 2013). However, I find it regrettable that the talks were so dominated by agriculture and that subjects of greater economic importance were pushed into the background. The Ministerial Declaration has yet to strike a balance between the various negotiation objectives of the Doha Round. That is particularly true of the reduction in industrial tariffs, the liberalization of services and the removal of non-tariff barriers. For the German Government, the key point in the next few months is to focus the spotlight more on the interests of our export industry in market opening and to achieve improved market access, particularly in emerging economies like Brazil, India, China and other Asian countries. To achieve this, we need co-operation with the United States, which has similar interests here. Chancellor Merkel met with USTR Portman in Davos, and we and the EU Commission are engaged in intensive contacts with him. Overall, the agreement reached at Hong Kong has moved the WTO further along the road towards a successful completion of the Doha Round. The political will does exist, ladies and gentlemen, for a successful conclusion to the Round. After all, a multilateral outcome from the talks – one which strengthens the international rules and facilitates market access for all WTO members – will produce welfare gains in all the parties to the talks. Ladies and gentlemen, We have a lot of common issues to resolve in our transatlantic relationship, for example in trade policy, foreign policy, security and the fight against terrorism. I hope I have been able to demonstrate to you that the German Government has an open ear for the interests of commerce on both sides of the Atlantic and that we are progressing well towards a trusting transatlantic relationship – particularly as a basis for further economic improvements. The intensive exchange between the German Government and our American friends in the first few weeks following the formation of the new government is proof of this. I will restrict myself to mentioning the visits to Berlin by I have no doubt, ladies and gentlemen, that you will all enjoy many fruitful discussions today and tomorrow, and will draw the network linking Europe and the United States of America even closer together. Ladies and gentlemen: This brings me to the end of my remarks, and I shall be brief: let me quote the Israeli writer and satirist Ephraim Kishon. He once said: “Capitalism will fail either due to income tax or due to (overlong) speeches on economic policy.” I thank you for your attention.
March 20, 2006
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