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Remarks by Deputy U.S. Trade Representative Miriam Sapiro at the Transatlantic Legislators' Dialogue
Cannon House Office Building
November 30, 2012
*As Prepared for Delivery*
"Thank you for the invitation to speak today. It is wonderful to see American and European legislators come together across the Atlantic and across party lines to work together for the benefit of our two economies. I also appreciate very much your giving me an opportunity to exchange views with you. Members of the TLD are among the most knowledgeable about the transatlantic economic relationship, and the most devoted to its strength. It is so helpful to me and my colleagues in government to hear your views and advice.
"Right now, we face similar challenges and we share the same goals – to strengthen our economies and create more jobs for our people. That is why our leaders created the High-Level Working Group on Jobs and Growth during their November 2011 Summit meeting. They tasked the Working Group to identify policies and measures to increase U.S.-EU trade and investment in ways that would support mutually beneficial job creation, economic growth, and international competitiveness.
"Our leaders are motivated by the belief that the U.S.-EU economic relationship – although the world’s largest – could generate even more job-creating trade and investment. I am here to discuss with you how we can fulfill our leaders’ mandate to achieve this goal.
"When we talk about ways to strengthen our relationship, it is helpful to recall that the U.S.-EU trade and investment relationship remains the single most important one – both for the United States and Europe:
- The United States and the EU together account for almost 50 percent of global GDP.
- U.S. foreign direct investment (FDI) into the EU was over $2 trillion in 2011, more than twice U.S. FDI into any other region in the world. EU FDI in the United States in 2011 was $1.6 trillion, which is roughly four times the amount from any other region. This extremely high level of investment activity supports more than 7 million jobs total on both sides of the Atlantic.
- The U.S.-EU trade relationship continues to grow -- trade increased nearly 50 percent between 2009 and 2011, to $2.7 billion a day. Our exports to the EU had a 44% faster growth rate in 2011 than 2010, while EU exports to the U.S. had a 15% faster growth rate during that same period.
- Our economic success promotes growth and improves living standards in the rest of the world. U.S. and EU investment and innovations drive the development of new products, processes, and markets worldwide. Our consumers and industries remain critical markets for many developing economies.
"The EU and the United States have a vital shared interest in preserving and expanding the commerce that lies behind these impressive economic figures, and the millions of jobs they represent. And the fact is, we have never stood still. We are constantly striving together to find ways to make the transatlantic trade relationship an even stronger basis for future growth and jobs.
"So what can we do to try to achieve the full potential of this already extraordinary relationship? It is clear we have not yet achieved the maximum possible success in removing or reducing the tariff and non-tariff barriers that still impede transatlantic trade. We recognize on both sides that, given the sheer size of our commerce, even small gains in any sector can result in significant economic benefit to our companies, our workers and our farmers. The urgency of pursuing all available means to find ways to increase our trade and investment has only increased in recent years, as we both seek to emerge from a period of economic difficulty, and as we both confront the challenges of a world economy in which emerging markets are playing a growing role.
"As you may know, the Working Group issued its Interim Report in June. The Report concluded that a comprehensive transatlantic trade and investment agreement, if achievable, could generate substantial benefits for the U.S. and EU economies.
"The phrase “if achievable” is very important: the Interim Report noted that the Working Group would need to do additional work to ensure that a U.S.-EU negotiation, if undertaken, could successfully deliver meaningful benefits in a timely manner. Neither the EU nor we want to spend resources on a negotiation that stalls. Rather, we would like to believe there is enough common ground to succeed and jumpstart trade and job growth on both sides of the Atlantic. A successful negotiation will also help sustain our collective ability to sustain global leadership on trade.
"So far, we have agreed that a genuinely comprehensive U.S.-EU trade agreement would, in principle, bring substantial benefits to both economies. What remains is to increase the confidence that together we can indeed achieve such a goal within a reasonable amount of time.
"Our discussion of what “if achievable” means continues today. We are exploring with the European Commission areas that we know will be challenging in any negotiation – areas where core goals of one side run up against domestic sensitivities on the other side.
"We are guided by an intensive process of consultation within the U.S. government, with private sector representatives, and with our Congress aimed at making a decision on whether to launch negotiations. I understand the Commission is engaged in a similar internal process.
"That is why I am so pleased to be here, as U.S. and EU legislators have an important role to play. After all, members of the TLD have helped get us to this point, having advocated for a comprehensive agreement for many years.
"And if we decide to launch negotiations, both the European Parliament and Congress would be consulted throughout, and of course, would have to approve any final agreement. Achieving success will not be easy, and will require consistent leadership from legislators in order to tackle the tough issues needed to reach a comprehensive outcome. I have no doubt that our discussions today and that continued leadership from Christian Ehler, Vital Moreira and others will be a huge help to both sides.
"Again, if we decide to launch negotiations, what would the United States want such an agreement to look like?
"I think you all know that U.S. trade agreements are typically quite comprehensive – requiring the removal of all, or virtually all, goods tariffs. We would not seek to do less with Europe.
"We would also want to explore possibilities for removing barriers to transatlantic flows of services and investment.
"And we would want to find ways to reduce and prevent the non-tariff barriers that now constitute the most significant barriers to transatlantic trade.
"In addition, finding new ways to tackle sanitary and phytosanitary (SPS) barriers, technical barriers to trade, and other non-tariff barriers would be a vital breakthrough.
"If together we decide that we really can negotiate a truly comprehensive and ambitious agreement, which can be concluded within a reasonable period of time, then I am confident there will be broad-based public support in the United States for such an undertaking.
"Even as we work to develop a recommendation for our leaders on the idea of a comprehensive agreement, we continue to pursue cooperation on many fronts. Two of our most important economic integration initiatives include the creation of the High Level Regulatory Cooperation Forum in 2006 and the Transatlantic Economic Council, or TEC, in 2007. Both of these bodies are working to make the U.S. and EU approaches to regulation and innovation more compatible.
"The TEC and the Regulatory Cooperation Forum have already had several important achievements in the past 18 months:
- We developed joint investment principles, and we are pleased that countries in North Africa and the Middle East have signaled they are ready to adopt these principles to spur greater investment.
- We agreed on a set of joint principles to promote trade in Information Communication Technology (ICT) services, which several countries have already signed on to, and we and the EU are encouraging others to do so, including in the Middle East and North Africa.
- We developed a comprehensive work plan for the development of compatible regulations and technical standards for electric vehicles, and a plan for cooperation on interoperable electronic health records.
- We successfully negotiated a new air cargo security partnership and trusted trader mutual recognition.
- We have conducted a series of increasingly successful workshops in which we are jointly exploring ways to help our small- and medium-sized enterprises (SMEs) overcome the challenges of exporting. I will help open the 4th TEC SME Conference next Monday here in Washington.
- We are working together to exchange and improve information flows on critical raw materials, and share ideas for improving the design, recycling, and substitution of materials in electronics. We are also continuing our strong cooperation on reducing barriers to trade in raw materials.
"Looking ahead, we are analyzing comments we received in response to a joint U.S. Government-European Commission solicitation for private sector proposals to address regulatory differences that unnecessarily impede trade. We issued this invitation earlier in the fall, and we have received around 70 comments from the groups representing a wide range of economic sectors. We plan to meet with our EU partners in the High Level Regulatory Cooperation Forum in the first part of next year to discuss how to proceed with regulatory cooperation, informed by this strong input from our stakeholders.
"More broadly, we are also working together to create a stronger multilateral trading system, including filing joint complaints on unfair trade practices in the WTO, such as on Chinese restrictions on exports of rare earth metals.
"Let me close where I started, by thanking legislators on both sides of the Atlantic who have supported and encouraged my team and our partners in the Commission every step of the way as we seek to enhance substantially our trade and investment partnership. The idea of an ambitious, comprehensive trade agreement is one that, with a bit more work, I hope we will be able to recommend to our leadership. Finding new ways for the transatlantic partnership to improve what is already the largest economic relationship in the world strikes me as a wise investment for both sides."