DaimlerChysler Forum – Cooperation of Policy and Business in the Transatlantic Dialogue
Thank you, State Secretary Hintze, for your introductory remarks. Thank you, Rob Liberatore, Dr. Spoeri and DaimlerChrysler for organizing and hosting this important and timely event. I could not think of a more fitting title for this discussion forum, nor could I think of a better company to host it. DaimlerChrysler is an example of the significance and importance of the transatlantic relationship and how our relationship has been transformed as the world has transformed.
This transformation – spurred by the end of the Cold War – has brought the world closer together through the spread of more open and highly integrated markets. No where else in the world has this integration happened faster and more intensely than between Europe and the United States. The “glue” that was the Cold War, which held our nations together for over four decades, has been replaced with increased investment, deeper economic integration and more corporate partnerships. Despite constant talk of the rise of the Asian market and other emerging markets, Europe and the U.S. are still each other’s most important commercial partner and number one investment location.
The transatlantic economic relationship between Germany and the United States provides a perfect example: foreign direct investment flows between the U.S. and Germany total over $290 billion. There are over 3,250 German companies in the U.S. with an annual turnover of $429 billion and over 1,250 U.S. companies in Germany with a turnover of $214 billion. These firms provided over 1.25 million jobs in our two countries. These companies harness the benefits of opened markets brought about global economic integration. In doing so, they help increase the prosperity of our respective countries and further deepen the most important trade relationship in the world.
The economic relationship – the one that brings the world’s two largest, most affluent economies together – has, in effect, become both driver and anchor of the new transatlantic relationship. By the driver I mean the continued and ever-increasing level of investment and trade between the EU and United States. Forty percent of world GDP and over one-third of global trade take place between the EU and the U.S. The result is increased prosperity on both sides of the Atlantic.
Transatlantic economic ties have also anchored our relationship. They have helped us move ahead and maintain our purpose when disagreements over the Iraq War made other parts of the relationship difficult. That period underscored not only the strength of the transatlantic relationship, but also made apparent where a key source of strength lies – in the integrated, mutually reinforcing economic relationship. As an excellent DaimlerChrysler-supported study on the transatlantic economy noted, even though U.S.-German political relations suffered during the Iraq War, U.S. companies still poured $7 billion in investments into Germany in 2003. It was also a record year for transatlantic trade flows, growing by 7% year-on-year.
Politicians who ignore the need for a strong transatlantic partnership do so at their own nations peril in the future.
Globalization is unavoidable! Globalization is consumer-driven and something that has existed long before the fall of the wall that was right outside this building. Globalization is about choice, about seeing things changing elsewhere and wanting to be part of that change. These things – whether they are ideas, new manufacturing techniques, services or consumer goods – have been made accessible through the opening of markets and revolutions in technology and communication. Globalization has transformed the way people see the world. It has spurred competition and innovation and provides opportunities for not an elite few, but for the global population. It takes foreign relations out of chancelleries and legislatures and makes it part of the lives of individuals around the world.
By taking advantage of the benefits globalization has to offer – in terms of market access, increased investment and information flows, and innovation – companies and their employees have a vested interest, a real stake, in ensuring the continued success of the transatlantic relationship.
As most of you know, I have a bit of experience with running a company that benefited greatly from the transatlantic relationship. We realized that if markets opened and the global economy was changing, we needed to change right along with it. This required thinking about how to run a company more efficiently, to empower the individual to make decisions – from the lowest to the highest level. It meant breaking down barriers within the company – collapsing management silos and eliminating stove-piping. We couldn’t allow ourselves to be the greatest hindrance to competing in these new markets.
What I always thought important was our company’s ability to form a connection between our employees in the U.S. and our employees in Europe – to empower the individual. Information-sharing had to begin within the company itself, to show that the mission of the Timken Company transcended continents and that we all had a part to play in its success. We used worldwide company news letters to report on events or developments happening throughout our plants the world over. The information and technology revolution has only deepened and spurred more exchanges of communication and ideas. While it may sound simple to post a company newsletter or have an electronic bulletin board, the dissemination of information makes it quite clear that we are all in this together and each employee’s efforts – whether in Germany or Ohio – plays a role in the company’s bottom line.
In effect it makes a difference in the prosperity and well-being of every employee and family. Those workers can also carry that information to their friends and neighbors and further build international understanding.
The Europe and the U.S. still have the wherewithal to compete globally. In fact, Europe and the U.S. continue to be destinations of choice for multinational corporate expansion. Companies are putting more emphasis on high-value areas like research and development. They are moving closer to their markets, suppliers and decision-makers, rather than focusing solely on low-cost production. That shows that the U.S. and the Europeans are still well-placed not only to compete, but to succeed in today’s global economy. And of course, we have huge markets.
As I mentioned earlier, having a vested interest in transatlantic success is important, but you also need to empower your employees so they can exploit the advantages of globalization. As the world becomes more integrated, the importance of having employees who can adapt to this world -- who have the necessary skill sets to compete -- is essential. This challenge lies at an important intersection for government and business interests. It brings into further focus the importance economics plays on foreign policy. Weak economic growth in the EU means lost opportunities for transatlantic trade. As Daimler-Chrysler’s study on the transatlantic economy highlights, annual growth of just 3% in Europe would create a new market the size of Argentina.
President Bush has stated on more than one occasion that the most effective method for generating new, high-quality jobs, and higher living standards, is to develop the skills and technologies that promote economic competitiveness. Business and government both have a responsibility to provide education and training opportunities to keep the workforce competitive. Governments around the world must also continue to open their markets and support education systems that will allow their citizens to be part of this dynamic global economy. Governments also need to unleash the potential of businesses -- through tax cuts and less restrictive labor regulations.
To continue integrating the world economy – and halt protectionism – a serious effort needs to be made to save the WTO’s Doha Round. A successful Round is essential to companies, farmers, workers and consumers around the world. Free trade is at the center of President Bush's vision of a world of expanding economic opportunity, prosperity and freedom. Completing Doha is one of his top priorities. While bilateral or regional free trade agreements can be helpful, they can in no way replace the benefits of a comprehensive global, multilateral free trade system. The opportunities that a successfully concluded Doha Round provide are too great to let slip away. Let’s not let this once-in-a-generation chance pass us by. There is still time to reach a conclusion to the current Round, but your voices must be heard. It is time for European business to make it known to their politicians that failure in the current trade negotiations is unacceptable and it is time for all WTO members to seize this last chance to make the right choice about our common futures.
I would close by asking you to think about what you and your company can do to make the public aware of and supportive of this deeper relationship and the benefits it brings. An even deeper transatlantic relationship will ensure that this success continues, as we build on our strong partnership for the future.
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Updated: June 2008