Thank you for your kind invitation to participate at today’s conference.
As many of you know, President Bush will arrive in Germany tomorrow at the invitation of the Chancellor to see first-hand her home district. The visit will allow the two leaders a chance to continue their dialogue and further the positive momentum that has characterized their earlier meetings. Such regular and honest discussions are setting the foundation for a re-invigorated U.S.-German relationship.
The visit of President Bush will also afford them an opportunity to further discuss one of the most important components of our bilateral relationship—economic ties and global growth. In May, in her meetings in the United States, one of Chancellor Merkel’s key objectives was to discuss what could be done to broaden the potential for innovation and investment. Our combined weight in the global economy and our convergent interests make the United States and Germany natural partners in leading global economic development based on opening markets to encourage trade, investment and development. The economics are clear--trade liberalization, combined with pro-market, developmental domestic reforms, enhances the economic growth potential of developing countries. Free trade is integral to expanded economic opportunity, prosperity and freedom throughout the world. As the two leading export nations, the United States and Germany have an enormous stake in having the Doha Round WTO talks succeed and result in expanded markets and ambitious investment that will create the jobs we need. Efforts to complete the Doha Round of trade talks are currently "rough sledding" for the United States, as President Bush recently said. We are calling for Europe to make some "tough decisions" in the Doha round of trade negotiations. These and other global economic issues will be on the agenda at the G-8 talks later this week in St. Petersburg.
This conference today will directly address these mutual and fundamental priorities of our two leaders in encouraging investment.
In the new German states, you have been living through some of the most dramatic changes on the continent. As people who have experienced such amazing change over such a short period of time, you are in many ways ahead of your time. A decade and a half after the fall of the Berlin Wall, the challenges of rebuilding the east have become bound up with the national issues of economic policy reform.
Addressing such issues as the high cost of doing business in Germany, and enhancing the ability of capital and labor markets to react quickly and flexibly to changing conditions, are critical to Germany's ability to thrive in the global economy of the 21st Century. Today's conference should feature some frank talk about the tax, regulatory, labor, logistical and other circumstances that would attract major investors, Americans and others, to the German marketplace. The American economy, and my government, want to see Germany booming.
Chancellor Merkel has been very honest about the economic challenges Germany faces; and, she is proposing real solutions. Part of the reform package is a new emphasis on innovation and the basic economic factors that give individuals the freedom and opportunity to be productive and creative in a knowledge economy.
U.S. and other foreign investors are looking for opportunities to bring capital, jobs, and management resources to Germany as the investment environment improves. Germany, due to its location and its world-renowned trade events, is increasingly seen in my country as a global marketplace where international deals are struck by partners from every continent.
The benefits that cross-border investment brings to both of our economies are enormous. Foreign direct investment flows into the United States reached $129 billion in 2005, double the average from the mid-1990's. We estimate that foreign firms provide 5.1 million jobs in the United States, with German firms accounting for over 15% of this total, or 800,000 jobs. In addition, forty percent of these jobs are in the manufacturing sector. In Germany, U.S. cumulative fixed investment is worth about $80 billion, and U.S. firms account for 500,000 jobs. Focusing more regionally, 207 U.S. firms have already invested in the Eastern German states, including Berlin, for a total of over Euro 16 billion. This translates into well over 37,000 German jobs. Further, total trade between Germany and the U.S. has reached more than $108 billion per year. These numbers demonstrate that we have one of the most successful and integrated commercial relationships in the world.
This conference today recognizes and highlights the fundamental fact that foreign investment in all its forms – including foreign direct investment, like AMD in Dresden; private equity; and portfolio investment – is a growth engine that helps our countries to continue to prosper together.
Ladies and gentlemen, the years ahead will be challenging in many respects, but I am convinced of the important role that business communities on both sides of the Atlantic play both to enhance economic opportunities at home and to address the vital global challenges of the day. Thank you very much.
(As prepared for delivery)
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Diplomatic Mission to Germany
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Updated: August 2006