Robert D. Hormats
Under Secretary for Economic, Energy and Agricultural Affairs
AmCham EU, Avenue des Arts 53
Brussels, Belgium
March 23, 2012

As Prepared for Delivery

Thank you very much Susan. I am delighted to join you today. I am sure your conversations this week were fruitful and I look forward to discussing some of the conclusions at lunch today.

When then-candidate Barack Obama spoke in Berlin in July 2008, he stated that one of the priorities of his presidency would be to strengthen even further strong trans-Atlantic relations. Citing the daunting political, security and economic challenges of the 21st century, he stressed then that “America has no better partner than Europe.”

In the more than three years since, Europe remains America’s partner of first resort and its staunchest ally. The strategic alignment between the United States and Europe, rooted in shared history and values, has never been closer in addressing both international threats and internal challenges.

America, since the days of Presidents Truman and Eisenhower, and Secretaries Marshall, Acheson and Dulles, has recognized that a united and prosperous Europe is of enormous importance to the United States.

And we have recognized, since the days of Jean Monnet and Robert Schuman, that closer economic integration in Europe is an essential underpinning to a stronger Europe and its ability to be a robust ally. We have always understood that a prosperous Europe is important to a prosperous America. That was true in the 1950s when we supported the Marshall Plan, and it is today.

Recognizing that slower growth and tighter budgets in Europe and the U.S. could have an impact on some of our foreign policy objectives, we are actively searching for more opportunities to leverage our individual and collective resources to advance our shared goals.

For example, Europe is an indispensable partner in promoting peace and prosperity through development assistance. The EU and its member states account for over 55% of global net Official Development Assistance to developing countries, with aid from the fifteen wealthiest EU member states rising by 6.7% in 2010 to just over $70 billion.

In Libya, NATO allies came together with Arab and other partners to support the Libyan people and prevent a catastrophe.

In Afghanistan, with nearly 40,000 European troops on the ground alongside our own, we have built and sustained NATO’s largest-ever overseas deployments. And we will continue to support the Afghans as they assume full responsibility for their own security by the end of 2014.

On Iran, along with our European allies, we share a deep and increasing concern about unresolved issues and Iran’s continued refusal to comply with its international nuclear obligations.

We remain committed to a dual-track policy that uses pressure to urge Iran to engage seriously on its nuclear program.

At the same time, we are engaging closely with major oil consuming and producing nations to assess the balance of supply and work to stabilize global markets.

Our aim is to reduce the revenue flowing to Iran’s illicit nuclear program, and not to endanger global economic recovery through higher energy prices.

We also recognize the need to work together with our European partners on a wide range of energy issues, including increasing the diversity and security of our energy sources, developing clean energy technologies and storage mechanisms, and constantly improving and refining our approaches to energy efficiency.

In these difficult economic times, we stand to benefit both our economies by ensuring that the brightest minds on both sides of the Atlantic are working together on these challenges and that our regulatory frameworks continue to foster innovation in this critical area.

Our interdependence makes it essential that we work together to coordinate trade and financial policy, an imperative that has only increased with the global financial crisis.

A healthy and robust transatlantic economy directly relates to our ability to address current and future global foreign policy challenges. Secretary Clinton has been quite clear on this point and has said: “We need to forge an ambitious agenda for joint economic leadership with Europe that is every bit as compelling as our security cooperation around the world.”

Secretary Clinton’s vision for Economic Statecraft involves using the tools of diplomacy abroad to support trade and the rights of U.S. investors. We will leverage the strengths and expertise of the U.S. private sector in our economic engagement overseas, and use our overseas presence to grow our economy at home by attracting foreign investment to the United States and increase trade.

The transatlantic economy is the largest in the world – with trade flows between the U.S. and EU exceeding $2.7 billion per day. To put this in perspective, the value of United States goods and services exports to the European Union is almost five times the value of our exports to China.

In previous discussions with you, I’ve outlined this shared vision for the transatlantic economy. Our transatlantic work is geared toward a common agenda of economic recovery and growth.

By reinforcing our mutual recoveries, we can bring emerging powers into the international rules-based system, and reorient the global economic architecture. Indeed, I think we have made significant progress in reorienting the TEC and the High Level Regulatory Cooperation Forum towards these ends.

I’d like to review progress in what we’ve done to advance our goals in these areas, and leave ample time to discuss how you see prospects for intensifying work towards this common agenda.

Eurozone Crisis

The backdrop to this discussion, and foremost in the minds of policy-makers both in Brussels and Washington, is putting our recoveries on a sustainable path, recognizing the impact of Europe’s debt crisis on our intertwined economies.

We remain confident that the EU has the will and the means not only to manage its debt and build the necessary firewalls, but also to create growth and to restore liquidity and market confidence.

We welcome recent steps by European leaders to resolve the debt and banking crisis, including the “fiscal compact” treaty and summit commitments in January and again this month to facilitate job creation and to help member states pursuing pro-growth reforms.

We understand governments are reviewing the size of Europe’s financial firewall and look forward to the outcome of that review; we believe this will be a critical further milestone in arresting contagion while those reforms take root.

We welcome the disbursement of a second financial support program for Greece. Greek authorities are implementing a strong package of reforms that deserves our support and that of the international community.

As Secretary Geithner said earlier this week, fully restoring confidence and growth will take time and it is essential to give countries space to enact critical reforms while continuing to borrow at affordable rates.

There is clearly more hard work ahead with many difficult choices to make. But our European partners have laid a solid foundation on which to build.

Transatlantic Economic Council

The business community, consumer organizations, and other stakeholders in the United States and in Europe have also been an active and vocal constituency in support of the Transatlantic Economic Council, or TEC. I would like to give an update on two areas where the business community has supported deeper engagement: investment and e-mobility.

[We are very close to finalizing a set of investment principles that we have developed with the EU as part of the TEC Investment Working Group. We are hopeful that these principles can be used in our joint efforts on investment in third countries, as well as with our multilateral efforts at the OECD, UNCTAD, and elsewhere. In the months ahead, we will keep you informed how we intend to operationalize this set of principles.]

We reference in the principles support for the OECD work on a preliminary set of criteria on State-owned and State-supported enterprises. You have told us is of concern to business as well.

This new breed of SOE can crowd out more innovative, smaller competitors, hurting both the host economy and foreign competitors.

We are working with the EU and others to push further work by the OECD Trade and Investment Committees to examine the cross-border impact of these practices and build on the existing work of the Corporate Governance and Competition Committees. We believe the investment and trade dimensions are particularly important and they are substantially interrelated.

On e-vehicles, I view launching the comprehensive workplan at the November TEC in 2011 as one of the highlights. We thank Audi and Ford for their leadership with us in this effort.

A key component of this work plan is a decision to establish “interoperability centers,” or living laboratories, allowing scientists from both sides of the Atlantic to share data, equipment, and testing methodologies.

This in turn should set a foundation for compatible approaches and regulations in both markets and lead to interoperable e-cars and related infrastructure, such as charging stations and smart grids. We hope these new models for working together on science-based cooperation will lead to more compatible regulatory approaches in other sectors, such as nanotechnology.

While we have a common purpose on electric vehicles, success is by no means assured. It will depend heavily on the work that is done in the private sector to prioritize and develop the standards adopted for and applied to these new technologies. The standards-setting process is very complex with vital roles for government, business, and standard-setters.

We urge private sector standards bodies to keep up the momentum achieved last year and identify priorities for standards-setting, and what governments can do to assist in the process.

If the EU and the United States can together promote the creation of compatible, high quality, transatlantic standards in a variety of sectors or product areas in the short-to- medium term, our countries can encourage other nations to adhere to them and reduce the clutter of disjointed, unilateral standards that would impede trade and serve as protectionist devices.

We look forward to discussing how business and government can create similar partnerships in the TEC to further our mutual agendas on raw materials, nanotechnology, and e-health.

High Level Working Group on Jobs and Growth

At the U.S.-EU Summit in November 2011, President Obama and EU leaders pledged to make the U.S.-EU trade and investment relationship even stronger. They called upon the TEC to create a High Level Working Group on Jobs and Growth, co-chaired by the U.S. Trade Representative Ron Kirk and EU Trade Commissioner Karel De Gucht.

The purpose of this group is to identify and assess options for strengthening the transatlantic economic relationship in areas including, but not limited to: conventional barriers to trade in goods; barriers to trade in services and in investment; opportunities to reduce or prevent unnecessary non-tariff barriers to trade; and, enhanced cooperation on common concerns involving third countries.

All options are on the table. USTR has had initial consultations with EU counterparts and continues to consult with all stakeholders, including Congress, in its work.

Several major private sector organizations have issued studies or reports that make compelling arguments for an ambitious agenda in this area. AmCham and TABD, in cooperation with others, have been instrumental in putting this on the U.S.-EU government agendas at the highest levels.

And now there is a shared consensus that a more ambitious mandate is needed, given the need to put our domestic economic recoveries on even sounder footing.

As the EU, like the United States, focuses on jobs and growth as a priority domestic goal, the Obama Administration sees a unique opportunity for even more intense collaboration to exploit the potential of the transatlantic market. But this will involve making tough political decisions on both sides and resisting the urge to give into a competitive, rather than collaborative, mindset. We hope that an ambitious, yet realizable, approach can be developed in the High Level Working Group.

In conclusion, I want to thank again AmCham and TABD for their leadership on the transatlantic economic agenda and look forward now to our discussion.