As prepared for delivery.

2007 has been a landmark year for the transatlantic relationship – due in large part, I believe we would all agree, to the commitment and leadership of Chancellor Angela Merkel. No one country embodies the goal of a stronger Europe more than Germany. Chancellor Merkel articulated that goal throughout Germany’s twin EU and G8 presidencies. What’s more, Chancellor Merkel and President Bush share that vision. Their message is clear: Cooperation is crucial.

As a result, over the last year, we have seen the transatlantic – and the international – community move forward as partners on a number of concrete initiatives. We have seen more effective cooperation on fighting terrorism, limiting the spread of weapons of mass destruction, fostering development in Africa, combating disease, and addressing climate change and energy security. There has been constructive discussion on strategies in critical regions, including Iran, North Korea, the Middle East, and Afghanistan. I myself have just come back from a short fact-finding visit to Afghanistan. The ongoing and successful transformation of Afghanistan from tyranny to democracy is an example of what we can achieve when we work together.

During this conference, however, you will be looking at an aspect of transatlantic partnership that has a direct impact both at home and around the world – namely, improved cooperation on regulatory reforms and trade. A central column of the German-American partnership is our two-way trade and investment. The United States is Germany’s second largest trading partner. The United States is not only the top investment destination for German companies but also the largest foreign investor in Germany. More than 2,000 American companies are located in Germany with almost double that number of German companies located in the United States. Together, these firms provide close to 1.5 million jobs in both our countries.

Considering Germany’s leadership role in the European Union, the dimensions of our partnership are even more impressive. The U.S. and the EU represent the world’s two largest economies. More than three billion dollars a day in trade, services and investment cross the Atlantic every single day. Fourteen million jobs depend directly on trans-Atlantic trade. But we have the means to significantly increase these results.

Despite these numbers, there are impediments to trade and investment between the United States and the EU member states, including Germany. Perhaps it is a mark of success that traditional tariff barriers no longer pose the main barrier to transatlantic business. Rather, our bilateral challenges generally involve regulatory standards and practices.

Recognizing the importance of our economic relationship, Chancellor Merkel initiated the Transatlantic Economic Initiative to reduce and remove these barriers. At the U.S.-EU Summit in Washington last April, the United States and the EU agreed to a Framework for Advancing Transatlantic Economic Integration. The German Federation of Industries estimates that by reducing regulatory barriers on both sides of the Atlantic, we could gain up to 3 percent growth in GDP. When you consider that the U.S and the EU account for roughly 60% of global GDP and 40% of global trade, 3 percent growth represents very significant potential gains. As a former businessman, I am sure the Chancellor is right on the mark.

Greater openness in trade and investment between the U.S. and Europe also has significance beyond our borders. Our strengthened cooperation shows the way in other regions to boost transparency and the rule of law. This in turn can help unleash the potential of open markets and contribute to the peaceful rise of emerging economies around the world. One of the best ways to help developing countries is to encourage them to open up to the world economy. The research on this is clear – more integration with the world economy brings about reductions in poverty and more hope for the future.

President Bush’s economic adviser Al Hubbard and I met with Chancellor Merkel in June to kick off the work of the Transatlantic Economic Council. As the United States’ representative on the Council, Hubbard and his team work closely with EU Commissioner Verheugen. Today the U.S. Ambassador to the European Union, Boyden Gray, who brings a great deal of expertise in regulatory matters to this effort, will share his thoughts on our progress to date and the way forward. You will also hear from Commissioner Verheugen.

On Friday, Al Hubbard and Guenther Verheugen and the Council staff will meet in Washington, D.C. to assess the Council’s six-month progress. Continuing Germany’s critical role in achieving progress, Chancellor Merkel’s Economic Adviser Jens Weidmann will also attend. Chancellor Merkel will then join President Bush at his ranch in Crawford, Texas this weekend. I have had the great honor of sitting in on all of their meetings. That will include the upcoming meetings in Crawford. Judging from past experience, I know that this will be an open, constructive and proactive conversation between two friends who agree on core concepts and strategies.

To me, there’s no question that the leadership and commitment of Chancellor Merkel and President Bush have been indispensable to achieving the progress we have so far on the Transatlantic Economic Initiative. Many government officials in Berlin, Brussels and Washington have also, of course, worked hard to achieve these results. But this is not solely an affair of governments. For its potential to be fully realized, the Transatlantic Economic Initiative must be driven by industry as well. The initiative must endure beyond the current political leadership. It’s up to you, the stakeholders in the business world, to make sure that the leaders of the future stay on course and remain committed to its progress. With your support, we can achieve substantial economic efficiencies and continue to strengthen our partnership.

On that note, let me emphasize that the significance of the German-American partnership can simply not be overstated. It is the foundation of a transatlantic alliance that has produced an era of unprecedented peace and prosperity.

Our joint commitment to liberty and opportunity holds out the promise of greater freedom and prosperity to the wider community of nations. We have seen that these values help nations live in peace, turning military confrontation into economic competition and spurring innovation, growth and opportunity.

This past year, we have made considerable progress in re-defining and strengthening the goals of the transatlantic partnership for the 21st century. It is in that spirit that, next year, we will open the new U.S. Embassy on its historic pre-war location beside the Brandenburg Gate –just yards away from where President Ronald Reagan called upon the Soviet Union to tear down the infamous wall that divided Berlin, Germany, Europe and the world. It would have been easier to build in a less central location but we decided that the historical significance of the Embassy’s pre-war location made it essential that we return. The site is also next door to where John Quincy Adams, the first American diplomat posted to Berlin and the sixth President of the United States, resided.

Our new Embassy will symbolize both the past and the future of our partnership – from the early days of our young country through the confrontations and success stories of the 20th century, up to the challenges and opportunities of the 21st. It will represent all that the United States and Germany have accomplished together – and all that is yet to come.

We plan to celebrate the grand opening with a very special 4th of July party on Pariser Platz that will link to all of our consulates. We are also working with partners who will be hosting an Amerikafest on the 5th. These will be celebrations not just of the new building but also the ongoing commitment of the United States to the bilateral partnership. We hope to see you there.