“A New Era for EU-US Trade” – Speech by NATO Secretary General Anders Fogh Rasmussen

Speech by NATO Secretary General Anders Fogh Rasmussen at the Conference “A New Era for EU-US Trade” – Confederation of Danish Industry, Copenhagen

Mr. Dybvad, Karsten
Ladies and gentlemen,

Thank you for that kind welcome. And let me thank the Confederation of Danish Industry for organising this conference. It’s a pleasure to be with you to talk about a topic that is close to my heart: The transatlantic relationship.

Some may ask why the Secretary General of NATO should kick off a discussion on trade between the United States and the European Union. There are good reasons for me to do so. Because I have advocated a Transatlantic Market Place since 2006, as Prime Minister of Denmark; because already the Washington Treaty – the NATO Treaty – states in its article 2 that the allies “will seek to eliminate conflict in their economic policies and will encourage economic collaboration between any or all of them”; and because ultimately, economy and security are closely interlinked.

Trade encourages the creation of wealth. It discourages conflict and conquest. Increased economic activity creates greater prosperity. And this in turn leads to greater security, as people do not want to put their prosperity at risk. A healthy economy and sound security create a virtuous circle.

In our interconnected world, the connection between economics and security – and between peace and prosperity — is stronger than ever before. And it is particularly strong in the relationship between Europe and North America.

As we have heard, unfortunately, the latest round of EU-US-negotiations on a trade and investment partnership has been cancelled. For reasons that have nothing to do with the partnership itself. So, I consider it a temporary setback. The ultimate goal of the world’s biggest free trade deal remains in sight. Because a lot is at stake.

No two continents depend more on each other economically. Together, we account for about half of the world’s economic output, and almost 40 per cent of global trade. Every single day more than 2 billion Euros in goods and services are traded across the Atlantic. And millions of jobs on both sides of the ocean depend on that trade.

The United States and the European Union are also each other’s primary source — and destination — for foreign direct investment. For example, in Europe, more than 60 per cent of all foreign investment in Research and Development is by American affiliates. And European entities are responsible for some three quarters of foreign investment in Research and Development in the United States.

All this demonstrates the huge stake we have in each other’s economies. And in the success of each other’s economies.

But Europe and North America are much more than just economic partners.

We are also united by family ties and friendships that often go back many generations. We are united by our shared values – freedom, democracy, and the rule of law. And we are united in our resolve to safeguard those values by working together in NATO. And that is why my vision is for a truly “Integrated Transatlantic Community”.

An “Integrated Transatlantic Community” would help us to strengthen those different strands of our relationship — our economic links, our personal ties, and our security cooperation.

It would help us to protect our common values, our populations and our societies. To promote the rules-based international order and norms and practices. To preserve our peace and our prosperity. And to assist other nations progress towards peace and prosperity too.

Economics and trade will be the lifeblood of this “Integrated Transatlantic Community”. And that is why I strongly support the idea of a Transatlantic Trade and Investment Partnership.

According to some estimates, a comprehensive agreement could — within five years — boost exports between the United States and the European Union by more than 150 billion US dollars. It could expand our economies by some 250 billion US dollars. And it could generate more than half a million additional, high-paying jobs. That is a shot in the arm which all our economies could use. And I am sure many of your companies would welcome it too.

For example, the agreement would help to break down tariff barriers. Both the United States and the European Union maintain high tariffs in sectors that are of critical economic interest to the other. We must cut those tariffs, especially in sensitive sectors such as agriculture, processed food and motor vehicles. If we can eliminate or drastically reduce these tariffs, the trade in goods could grow by as much as 2 per cent.

At the same time, we must also lift the strong national restrictions that exist in services such as maritime and air transport. And we have to overcome the significant differences in rules and regulations for the financial services industry — both between the United States and Europe, and also among European Union member states.

The agreement would also allow us to bring greater coherence and transparency to technical regulations, standards and certification. Studies have shown that regulatory differences typically add some 10 per cent in trade and investment costs, and even more than 50 per cent in some areas such as the food and beverages sector. In the automotive sector, these barriers add more than 25 per cent to the trade and investment cost.

They also show that cutting administrative costs, liberalising trade in services, and opening up public procurement to foreign bidders would generate 80 per cent of the overall potential wealth gains of this proposed trade deal.

In sum, the long-term benefits of a Transatlantic Trade and Investment Partnership would be enormous.

It would boost trade and investment.
It would stimulate jobs, innovation and growth.
It would promote the principles of a rules-based trading system.

And it would be a significant step towards a Transatlantic Free Trade Area. This is what I believe should be our ultimate goal.

Of course we are all aware that there are vested interests. And sensitivities over a wide range of issues, such as agricultural subsidies, genetically modified organisms, chlorinated chicken, public health and sanitary regulations.

But while we should respect legitimate concerns, we should not let particular interests and sensitivities undermine the much greater good that we can achieve – for all our nations, and for the rest of the world.

Strengthening trade and economic activity across the Atlantic is an important priority. But my vision for an “Integrated Transatlantic Community” is much broader. It’s also about strengthening people-to-people relations, and promoting the values and ideals that we all share.

I know how much I benefitted from travelling to the United States as a young politician some thirty years ago. It gave me a profound understanding of the country and its people. And it created bonds with families, colleagues and institutions that I still cherish today, and that continue to help me in my work.

I believe that students, academics and artists should all have greater opportunities to cross the Atlantic, in both directions. A comprehensive programme for greater cultural, educational and scientific cooperation will help to strengthen our community of values. And it will also underpin the Transatlantic Trade and Investment Partnership.

Finally, if we want to create a truly “Integrated Transatlantic Community”, we must continue to strengthen the third, important strand of our transatlantic bond, and that is the security strand. Because security is the foundation for everything that we have – and for everything that we hope to achieve.

For well over six decades, NATO has ensured the security and stability that has allowed all our nations to flourish. With our unique integrated command structure, unrivalled military capabilities, tried and tested forces and procedures, and extensive network of partnerships, NATO is the most successful alliance in history.

But as we all know, nothing comes for free. And security certainly doesn’t. That’s why it is vital that NATO remains fit for purpose. Not for the sake of war. But for the sake of peace.

And that means all Allies must continue to invest in NATO – politically, militarily and financially. And we must all shoulder a fair share of the burden, just as we all share in the benefits. That commitment, too, is a key part of my vision for a truly “Integrated Transatlantic Community”.

Ladies and Gentlemen,
In a world where we are all connected, the transatlantic relationship remains the most important relationship we have. It is vital for the freedom, security and prosperity of both Europe and North America.

The Transatlantic Trade and Investment Partnership that is now under discussion is sometimes described as an “economic NATO”. I think that’s a good comparison.

Because the Transatlantic Trade and Investment Partnership can bring enormous benefits to all our nations and all our people, for generations to come. It can set a new gold standard in economic cooperation, just like NATO has long been the gold standard in security cooperation. And, just like NATO, it can be a strong pillar for a truly “Integrated Transatlantic Community”.

To turn that strategic vision into reality will demand imagination and flexibility, on both sides of the Atlantic, to overcome the inevitable objections and obstacles. These must not be allowed to dim our vision. And that is why the most important step to success will be strong and determined political leadership.

It will also require strong support and encouragement from you in business and industry. The stakes are high, for all of us. But so is the reward. I urge you all to help to seize it.
Thank you.