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German-American Relations
Remarks by Ambassador Timken
Ernst & Young/American Chamber of Commerce in Germany
Düsseldorf, February 7, 2006


(As prepared for delivery)

Thank you for your kind words, and thank you, Ernst & Young and AmCham, for the opportunity to address you this evening. This is my first official visit to Düsseldorf. Tomorrow I will meet with Minister-President Ruttgers and in view of his upcoming trip to Washington, New York and Philadelphia; our meeting will be especially useful. But Sue and I, and our daughter Fran, have been to the region unofficially on a few occasions since our arrival in Germany last August. Everywhere in Germany we have received a very warm welcome. We look forward to meeting as many people as possible in person. So I would like to thank Ernst and Young and the American Chamber of Commerce for arranging this opportunity.

Since my arrival, I have spoken frequently about the positive direction of U.S.-German relations. Let me digress a little. As a former chairman of the National Association of Manufacturers -- the equivalent of the German BDI -- and as former CEO of the Timken Company, I used to spend a few minutes at the beginning of every speech I gave with a reality check to highlight the strengths of manufacturing in America -- because I knew that manufacturing as a component of the economy was misunderstood and under-appreciated by many.
Now, as Ambassador of the United States to Germany, I must conduct a similar reality check on the German-American relationship.
I have pointed out frequently that with the formation of the new German government, our relationship would be stronger than ever and the transatlantic flow of government people crossing the ocean between Germany and the U.S. would be impressive. I believe I have been correct on both accounts. Minister-President Ruttger’s upcoming visit to the United States is just one example. I have just come from the Security Conference in Munich. Secretary of Defense Rumsfeld spoke after Chancellor Merkel. Deputy Secretary of State Zoellick spoke on Sunday morning. As you might expect, there were numerous Bilateral meetings between the principals.

Two weeks ago, Commerce Secretary Gutierrez visited Germany. And the flow of official visitors and the discussion of issues that affect both our countries and the world is showing no sign of letting up!

But of course, the most important meeting was the very successful visit of Chancellor Merkel to Washington in December. Both the duration and personal content of the discussion between the Chancellor and President Bush were symbolic, in my estimation, of a new era of dialogue and friendship. And I know because I was there with them.
The Chancellor and President Bush had a chance to spend more than 3 hours of quality time together, face to face.

Their discussions were wide ranging, covering both issues of high importance to our two countries, as well as personal insights, such as Chancellor Merkel's recollections of her experiences growing up in the former East Germany. The President was highly impressed by the Chancellor. Afterwards he noted that those who have lived under tyranny place an extraordinarily high value on freedom.

Chancellor Merkel and President Bush found common ground on many issues, paving the way for stronger and more concerted transatlantic action on important security challenges. Germany was a leader in negotiations with Iran to stop nuclear proliferation. Germany plays a very important role in Afghanistan; Germany has been engaged with training the military and police and has forgiven hundreds of millions of dollars of Saddam-era debts, for example, in rebuilding in Iraq. We welcome Germany’s decision to join the International Fund for the Reconstruction of Iraq.

Chancellor Merkel and President Bush also spoke of strengthening our economies and intensifying trade as the surest way to create meaningful and well-paying jobs at home as well as stronger growth in developing countries.

These two leaders know very well that pooling the entrepreneurial and trade strengths of the world’s strongest economies is the best and most effective way to address the political and economic challenges we face globally.

During tough times and good times, the business community has been one of the mainstays in the German-American relationship. The President recognizes your contributions and I bring special greetings from President Bush to all those who are part of the German-American economic relationship.

The meetings two weeks ago of Commerce Secretary Gutierrez with Minister of Economic Affairs Glos, Minister of Foreign Affairs Steinmeier, and with key members of the U.S. and German business community -- the first such visit on the part of a U.S. Commerce Secretary since 1999 – were affirmations of the importance of trade and investment in the relationship between our countries and recognition of the leading role Germany plays in dealings between the U.S. and the European Union.

The level of U.S. investments in North-Rhine Westphalia alone matches that of many countries. There are more than 560 American businesses located in this state with a combined annual turnover of 53 billion Euros. More important, these firms employ 170,000 people directly and thousands more indirectly -- right here in North-Rhine Westphalia.

Ladies and gentleman, you know, and I know, that our economic cooperation benefits American companies and American workers as well as German companies and German workers – even if people on both sides of the Atlantic sometimes seemed embarrassed in recent years to talk about that cooperation and those benefits. Today, I call upon the business community to realize that it is now your country’s policy to do exactly that -- to speak up at every opportunity.

But beyond the bilateral benefits, given the size of our economies, the United States and Germany have a special responsibility to contribute to global growth.

Transatlantic trade and investment fuels the engines of the world's economy and leads to tangible benefits – jobs, goods, new ideas – for people in the U.S., Germany, and elsewhere in the world.

I mentioned earlier my reality check when I was chairman of the National Association of Manufacturers. Part of my routine was also to encourage the business community to play a more active role in the development of public policy by becoming part of the political process. Nobody understands better than the private sector what policies are good for the economy. The private sector cannot stand on the sidelines and watch. It cannot afford to leave politics to the politicians.

In diplomacy, however, the business community also has a role to play. Transatlantic relations are not just about governments talking to each other. I am convinced that a strong network of policymakers, researchers, journalists, nonprofit leaders -- and business leaders -- is one of the cornerstones of transatlantic partnership.

The business community in Germany has been very generous in helping us to establish some new exchange programs to extend those networks. I would especially like to thank the American Chamber of Commerce for their assistance in this regard.

We are working with Germany to achieve a successful completion of the Doha round. Trade in agriculture is an especially daunting challenge, requiring bold and decisive action. At the World Trade Organization talks in Hong Kong we reached an agreement to end all farm export subsidies by 2013. We need to build on this and to keep the momentum toward achieving a global trade deal. The U.S. has already made a far-reaching offer to reduce agricultural tariffs and subsidies. We hope that Germany will help lead the EU toward further steps to lower barriers to trade and so boost prosperity and improve people’s lives. But the trade talks need the energies and contributions of all the 149 members of the WTO.

The United States and Germany need to keep working together to urge emerging markets such as Brazil and India to broaden access to their manufactured goods and services markets. We look forward to Germany -- as the world's leading exporter -- playing a leading role in the Doha talks, especially in paving the way within the EU for lower tariff barriers on farm goods.

Open markets, not protectionism, are the way of the future. We can see all around us here in Europe how economies improved and people’s live became better as governments scrapped tariff and other barriers to trade. We need to be open in talking about this experience, these examples with people elsewhere in the world to show them the future is about opening up markets.

Let’s face it, if you want to see an example of what life is like in a country that closes itself off from the rest of the world, take a trip to Pyongyang. Failure of the WTO trade talks is not an option. Not for our economies. Not for global prosperity and certainly not for Germany, the world’s leading exporter.

While the U.S. economy continues to grow, we know that there has to be growth in other parts of the world. However, growth in Europe has been disappointing. A more robust European economy is essential to global prosperity and one of the few things economists can agree on is that the European Union cannot be strong and prosperous without a growing Germany.

The German economy is showing signs of improvement. Economic growth may reach 1.8 or 2.0 percent this year, up from 1.1 percent last year. In fact, part of my reality check about the strength of the German-American relationship is my honest view that the German economy is not doing as badly as some might say.

Germany is not alone as it considers structural economic reforms to remain competitive in today's global economy. We have had to face our own challenges in America. President Bush inherited a recession that was made worse by the attacks of September 11; a stock-market bubble that burst, as you all know, in the year 2000; corporate scandals that undercut the confidence that citizens have in the business community; and then of course this last year Hurricanes Katrina and Rita, which were a shock to our economy. Nevertheless, in the 3rd quarter of last year, the American economy grew by an annual rate of 4.3 percent. At year-end, unemployment was 4.7 %.

In spite of the difficulties we have had, our economy is doing quite well, and we believe that there are three basic planks that the President has followed to renew economic growth and vitality.

One is free and open trade.

The second is to reduce taxes, and to let consumers and businesses keep more of their money. Experience shows time and time again that consumers and businesses do a better job of allocating money than the federal government. That was the basic principle that drove the tax reductions. I know. As NAM Chairman, I told the President we would take the lead in selling his tax cuts to the Congress. And, if you look at the results today, I believe that they have had an important impact.

And then, finally, reducing regulations on business so that business people don't go to work worrying about getting sued, filling out paper or giving up creativity to conform. They go to work worrying about creating jobs, and launching new products, and entering new markets.

The primary challenge for American policymakers is to keep that strong performance going, to keep the momentum going. President Bush has an aggressive agenda that is focused on our long-term economic challenges, and we believe that he is right to think long-term; we need to continue to position America to compete in the global economy not just for the next three years, but for the long haul. We believe that those same rules apply here in Germany, and we know that you are working very hard on several areas where improvement is warranted, and that includes labor policy and your regulatory burden, which is something that we have had to confront as well.

All this hard work will lead to more economic growth. We believe that there is no substitute for growth.

Growth gives you options. If you have growth, different social programs, different social options, different options for your society all become possible. Growth creates jobs. There is no substitute for economic growth. Growth raises our productivity and our citizens’ standard of living, and history has taught us protectionism and government intervention does not create economic growth.

We believe the role of government is not to create wealth or to create prosperity, certainly not jobs. The role of government is to create an environment that unleashes the power of the citizens’ and private enterprise and innovation in an environment where an entrepreneur can flourish and companies can expand and create more jobs.

The politicians in Washington aren't the ones who do business. They create an environment so that business people can do business. Government can assist private businesses by ensuring conditions of transparency, building infrastructure, and defending the rule of law -- but it is the private sector that must drive economic prosperity. This leads, we believe, to the greatest growth.

We look forward to continue working with Germany to provide our respective countries opportunities for growth. Our governments have something called the Informal Commercial Exchange Talks. This is an annual dialogue where we discuss our bilateral and multilateral trade concerns. These meetings have been helpful and we work to lessen the regulatory burden.

We work together as well through our Summits, ministerials, and regular meetings with the European Commission and the EU member states.

We have committed to working on projects that can help create a business environment that encourages both domestic and transatlantic innovation. There are opportunities and challenges in the area of pharmaceuticals, intellectual property, and as President Bush, outlined in his State of the Union speech last week, in advanced energy technology.

Together we can build a world that is more prosperous, more stable, and more secure. I can't think of a better thing that we can do for the world at large than to strengthen the bonds between Germany and the United States, and I can't tell you how proud I am personally to be able to contribute to that very noble cause.

We have seen the benefits of strong transatlantic cooperation in the overwhelming German response to the natural disasters in the U.S. last year. I would like to take just a minute to thank all of you, and the companies you represent, for your generous help and assistance during the aftermath of Hurricanes Rita and Katrina. New Orleans and the Gulf coast are making progress, they're rebuilding. I can't thank you enough for your help and for your contribution to helping them rebuild their lives and rebuild their communities.

As the city of New Orleans recovers, our hearts go out to others around the globe affected by natural disasters. The earthquake in South Asia, the tsunami – are more reminders of the fragility of human settlements when confronted with the forces of nature, but also the importance of banding together to find solutions to humanitarian issues and any number of global challenges. We have serious issues to confront – ranging from terrorism to nuclear proliferation to avian influenza to re-energizing global economies.

Still, like all democracies, our governments occasionally disagree. The important thing is that, when we disagree, we believe that we disagree on tactics. Strategically, we agree on the vast majority of the challenges facing our democratic, free-market system. The strong ties between our countries have built one of the world's most valuable strategic partnerships. Our job now is to take that relationship to the next level.

One of the key messages that came out of the meeting between President Bush and Chancellor Merkel – the importance of open and direct dialogue between long time friends. The business community lives by this code with demonstrated results. That is the spirit in which we have succeeded in the past, and that will be the key to the successful future of U.S.-German relations.

2006 is Mozart year and Heinrich Heine year. It also marks the 300th birthday of an important and historic American -- Benjamin Franklin. He once said, "He that speaks much, is much mistaken." So, heeding that warning, I thank you for your attention and would be happy to listen to any comments or concerns that you might have.


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Updated: April 2006