Thank you, Stan, for that kind introduction. I am pleased to be here to discuss the work of the Transatlantic Economic Council – the TEC. Roundtable discussions like this are vital to the TEC. We need to hear from all interested parties, like the members of the Transatlantic Policy Network, the Chamber of Commerce, and Business Europe, to understand how the TEC should focus its work in a way that benefits businesses and consumers on both sides of the Atlantic and contributes to economic growth. Indeed, we benefit enormously from members of the TPN, many of whom – James (Elles) and Erika (Mann), for example – have been promoting greater transatlantic integration since the early 1990s.

In my remarks today, I will tell you where I think we are with the TEC, and where we are heading. I also look forward to hearing your ideas on where we should be heading. The strategic context is important. The United States and Europe share fundamental beliefs: the importance of the dignity of the individual; the need for transparency and the rule of law; the vital importance of open economies and liberalized trade and investment regimes; the role a well-regulated but not overregulated market plays in generating economic growth. Our societies and economies have prospered because of these shared values. As other countries become increasingly important players on the world stage, we must adhere to these values, demonstrate their continued vitality, and strive to become even more
competitive.

The U.S. and EU share the largest economic relationship in the world, with well over two trillion dollars in transatlantic investments generating nearly five trillion dollars in sales each year. Yet, barriers remain that inhibit growth in transatlantic trade and investment. Many of these are due to differences in our regulatory policies.

Both the U.S. and Europe believe in efficient and effective regulation. However, sometimes differences in regulations mean businesses seeking to grow in the transatlantic market struggle with burdensome, overlapping and, at times, conflicting rules. These regulatory divergences can make our companies less competitive, increase consumer costs, reduce consumer choice, and slow job creation. Finding ways to minimize unnecessary and costly regulatory differences can make our respective economies more dynamic and competitive globally.

It was precisely to address challenges like this and to increase competitiveness and economic growth that President Bush, Chancellor Merkel, and Commission President Barroso at the April 30, 2007 U.S.-EU Summit signed the Framework for Advancing Transatlantic Economic Integration. The Framework established the TEC and spelled out priority issues the TEC must address, including in regulatory cooperation, capital markets integration, investment, innovation, intellectual property rights protection, and secure trade. As a co-chair of the TEC, I have made implementing the Framework a top priority.

In just two weeks, I will be leading a delegation of Cabinet officers in a trip to Brussels to meet with our European Commission counterparts. Essentially, this will be a joint U.S.-EU Cabinet meeting. It will be our second in-person meeting. The first was last November. In the six months since that first meeting, TEC members have been engaged in productive discussions of TEC matters in numerous phone calls, videoconferences, and bilateral sessions on the margins of other meetings.

For the May 13 TEC meeting in Brussels and future TEC meetings to be productive, we must ensure that we are focused on the right issues and that we achieve meaningful results for our stakeholders. The TEC should not devolve into an academic forum in which we periodically talk at one another. We have been mindful of these objectives as we prepare for the May 13 meeting. Our discussion is designed to achieve concrete outcomes with concrete benefits for our respective economies. I see that discussion as having three dimensions: horizontal, bilateral or sectoral, and third-country.

By the horizontal dimension, I mean that the topics under consideration relate to our respective regulatory processes as they apply across sectors. The United States and the European Union are two of the largest players in the global economy. How we develop and apply regulations – whether they pertain to product safety, securities trading, customs procedures, or any other area – has an enormous impact on how companies do business not only in the United States and the EU, but in third-country markets too. To the extent our regulatory processes diverge, they increase the cost of doing business. If we can minimize the divergences, we may be able to diminish the costs.

To be clear, some differences in regulatory processes are unavoidable and may even be desirable. I am not advocating regulatory harmonization for harmonization’s sake. But, there is merit to identifying divergences that are unnecessary and options for minimizing them and the associated costs to the transatlantic economy. There also is merit to taking a hard look at existing regulations and considering whether they really are the best way of accomplishing the desired objectives, or  whether they can be improved by learning from each other’s experience.

On May 13, the TEC will receive a report from the U.S. Office of Management and Budget and the Secretary General of the European Commission on this very question. These two agencies have been studying differences in how the U.S. and the EU approach the regulatory process. We expect to hear their analysis of differences between the U.S. and EU processes with respect to impact analysis, risk assessment, transparency, and consultation with the public.

We also will hear from the U.S. Food and Drug Administration and their counterparts in DG Enterprise on their very successful approaches to bilateral information sharing relating to medicinal product efficacy and safety. It is our hope that their report will point a way forward to further improved information sharing in other product areas. If concerns about a product’s safety are raised in one market, regulators in both markets should have the same set of facts so that they can work together to address the issue to the mutual benefit of consumers in both markets. The accomplishments of FDA and DG Enterprise in this regard should help show the way in other product categories.

We will not reconcile all of our differences in regulatory approach at the May 13 TEC meeting, but we are making progress. Understanding those differences and bringing them into focus is the first step in finding solutions. Let me turn now to the bilateral or sectoral issues. By this, I mean issues that are particular to a given sector. The TEC has a number of them on its plate. They cover a broad swath of our respective economies – from chemicals, to patent development, to accounting standards, to many other areas. I will not discuss each of the bilateral issues before the TEC. I will touch on only a few of them, and I welcome your thoughts on others that I may not mention.

First, let me call your attention to one of the early successes of the TEC. Last November, we set as a goal mutual acceptance by 2009 of the equivalence of each other’s accounting standards – that is, U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).

Shortly after the November 2007 TEC meeting, the U.S. Securities and Exchange Commission decided to eliminate the requirement of reconciliation to U.S. GAAP for foreign private issuers using IFRS as issued by the International Accounting Standards Board. The rule implementing this decision went into effect in the United States in March of this year. A few weeks ago, the Committee of the European Securities Regulators issued advice supporting the acceptance of U.S. GAAP as equivalent to IFRS. Based on that advice, and based on subsequent public statements by the European Commission, we expect the European Commission to propose a draft regulation granting equivalence to the United States later this year, so that no reconciliation requirements are imposed on U.S. issuers accessing European capital markets using U.S. GAAP.

This is a success story. Making it easier for European companies to raise capital in the United States and U.S. companies to raise capital in Europe through the elimination of unnecessary regulatory hurdles is precisely the task our leaders set for us.

Regrettably, not all of our bilateral issues have been as easy to resolve. That brings me to the issue of poultry. I realize that the ability of U.S. farmers to sell chicken in the EU market may not be of direct interest to many of you in the room. But, the issue has implications that go beyond the immediate interests of U.S. poultry producers.

A successful resolution of the poultry issue is an important test for the TEC. The EU’s ban on imports of U.S. chickens processed in a particular way has been a long-standing irritant in the U.S.-EU trade relationship. There is no scientific basis for the ban, as recently confirmed by the European Food and Safety Authority. At the November 2007 TEC meeting, the European Commission agreed to come up with a definitive solution to this issue before the next U.S.-EU Summit, which will take place this June. A lack of follow-through on that commitment will call into question the ability of the TEC to deliver concrete solutions, which is why this matter should interest even those with no direct equities in it.

Additionally, the poultry issue is a good illustration of a broader, horizontal issue. It highlights the need for regulations to be grounded in sound science, risk assessment, and economic analysis. What makes the poultry ban so troubling is the lack of any such grounding. Rather, the ban finds its basis in the fact that the poultry treatment processes used by U.S. producers are different from the
processes used by EU producers.

Of course, it is well established that differences in production processes and methods are not themselves a legitimate basis for trade restrictions. And, indeed, it would be inappropriate for the EU to delay the fulfillment of its promise to lift the ban until, as some reports have suggested, it decides that the processes and methods used by U.S. producers are permitted for use by EU producers. It will be extremely difficult for the TEC to make progress on many of the issues on our agenda if one party’s willingness to recognize the regulatory practices of the other is contingent on whether it applies those same practices to economic actors in its own territory.

This leads me to another bilateral sectoral issue on our agenda – the EU’s chemicals regulation, known as REACH. Implementation of REACH has raised concerns among not only chemical manufacturers, but also manufacturers of products that use certain chemicals. Most urgent is the problem facing non-EU based manufacturers of personal care products, which have been marketing safe, innovative products on the EU market for years. As of June 1, these companies risk having their products taken off of shelves in the EU if the non-EU companies have failed to meet the burdensome registration requirements of REACH.

Meanwhile, their EU-based competitors will have a phase-in period of between 3 and 11 years to meet these requirements. We urgently need to find a solution to this problem. We need to ensure that trade with the EU worth billions of dollars does not run into a regulatory brick wall just one month from today. Like poultry, the TEC’s ability to deal effectively with this issue will be another test of its value to stakeholders.

I don’t want to leave you with the impression that all of the bilateral sectoral issues on the TEC agenda pertain to U.S. concerns with EU regulations. The EU also has raised concerns with U.S. regulations. For example, the EU has asked our Department of Labor to revise regulations governing the certification that certain electrical products are safe for the workplace. In particular, the EU would like the United States to adopt rules that would allow the manufacturer of these goods to self-certify the goods’ conformity with relevant safety requirements. We will be discussing this issue too at our upcoming meeting. We are looking for a path forward to address the EU’s concerns.

Let me turn now to the third-country dimension to the TEC agenda. The TEC can be a valuable tool not only for addressing bilateral U.S.-EU issues, but also for addressing issues of common interest in third countries. For example, the U.S. and the EU share a common interest in openness to inward investment. We both take this approach to investment in our own markets. At the November TEC meeting, we launched the U.S. – EU Investment Dialogue to deepen our relationship on a broad range of investment policy issues. Our goal is to find ways to support each other’s efforts to fight protectionism and revitalize our commitment to free and open markets at a time when others around the world may be wavering. The U.S.-EU Investment Dialogue has been developing a joint statement to express our commitment to open investment.

To be clear, both the U.S. and the EU encounter a more skeptical attitude toward open investment in other markets. Some countries put certain sectors off limits to foreign investment or reserve the right to block particular investments for reasons other than national security. Other countries are considering expanding the restrictions they already have in place. This problem affects U.S. and EU companies alike, and we should work together to address it. In particular, we should be reinforcing each other’s messages regarding the benefits of openness to inward investment. This is an issue that will be discussed at the upcoming TEC meeting.

The U.S. and the EU also have common interests in dealing with product safety issues in third countries, and we should coordinate our efforts. If our Food and Drug Administration is working with factories and regulators in another country to ensure that products of that country meet our standards, that effort benefits EU consumers too. Similar efforts by EU authorities benefit U.S. consumers. We are working together to better coordinate these efforts, and the TEC is an ideal forum for overseeing that coordination and ensuring that impediments to coordination are removed. We have discussed this issue with EU counterparts since the last TEC meeting, and I expect that we will continue that discussion in two weeks.

I have given you my thoughts on the upcoming TEC meeting. Let me now say a few words about the future of the TEC beyond May 13. We are at a very important juncture. The TEC has been around for only a year. We are still demonstrating that it is a useful forum. At the same time, we are about to undergo major leadership transitions on both sides of the Atlantic during 2009. In January, of course, we will inaugurate a new President, and that new President will bring new Cabinet Secretaries to our TEC table. Later that year, the European Commission and the European Parliament also will be changing their leadership. These changes raise the question of what happens to the TEC through the transitions.

For the TEC to navigate these transitions well, two things must happen. First, we need to get some successes under our belt. We need to show that the TEC can deliver real results. I think we are well on our way to doing that. I hope that after May 13 we will be even further along that path. Second, we need to craft a coherent work program for the future, building on the Framework launched at the 2007 U.S.-EU Summit. And, here I come back to my message that we are relying on the TPN, the Chamber, Business Europe, and other interested parties to help us set that work program. We are looking to you to identify issues that are ripe for TEC consideration.

Let me share a few thoughts on what makes an issue ripe for consideration in the TEC that may guide your input to the TEC in the future. First, the issue should be discrete and readily identifiable. We should avoid entangling ourselves in abstract matters that require substantial time just figuring out what the issue is.

Second, the issue should be relevant to businesses and consumers. It should be clear how the transatlantic economy as well as the people who live and work in that economy will benefit from the TEC’s engagement on the issue.

Third, the issue should be the subject of consultation between the responsible agencies before it comes to the TEC. Within the U.S. government, we work matters through the interagency process, elevating them as necessary, and presenting them to Cabinet officials only if we are unable to reach solutions at lower levels. A similar approach should guide the setting of the TEC agenda.

Fourth, in putting issues on the TEC agenda, we should have a clear idea of the value that the TEC can add. In some cases, the TEC may be able to provide the high-level push necessary to overcome differences in views that have blocked progress in agency-to-agency discussions. Administrative agencies – whether in the U.S., the EU, or elsewhere – sometimes take positions that are difficult to defend. This may be the result of inertia, politics, or other factors. The TEC can be a useful tool for putting such hard-to-defend positions under close scrutiny and pushing for a solution.

In other cases, the TEC may be able to shine a spotlight on an issue and thus provide political momentum to generate a solution for a problem that may have been lingering due to lack of attention. It may be that our views are aligned on a given issue, but that the U.S. and EU have not devoted sufficient resources and effort to the issue. By calling attention to the issue’s importance, the TEC may be able to light a fire under the responsible agencies and stimulate movement forward.

Fifth, viable options for addressing the issue should be identified. To do that, we need to begin a discussion with a clear sense of where the discussion should lead. We want to avoid academic discussions that lead to dead ends.

I think that is a good note on which to turn the floor back to you. I am grateful for the valuable input we have received from you to date and I welcome your further thoughts on what the TEC should be addressing. I also look forward to your suggestions on how we can enhance the effectiveness of the TEC and ensure its durability.

Thank you for your kind attention.