Thank you very much to you, Friedrich, for the kind introduction and the invitation to speak today. It is moving to be here, a few meters from where I stood on my first trip to East Berlin in 1987. I remember looking at the Wall and doubting that I would ever live to see it come down. Four years later, however, I was back, working in the Legal Department of the Treuhandanstalt. It is a pleasure to be here in the company of two distinguished former U.S. diplomats – Ambassadors Bob Kimmitt and J.D. Bindenagel — as well as my colleague Ambassador Michael Punke, with whom I have the pleasure of working on TTIP. And it is good to see old friends, including Greg Treverton, Dan Hamilton and Alexander Lambsdorff.
The European Union is living through a challenging moment. Solidarity among its members is being put under enormous strain: first during the financial crisis, then during the crisis in Ukraine, and during the bailout negotiations with Greece; today it is being severely tested because of the migration crisis. European Commission President referred to this strain in his recent State of the Union speech: “There is not enough Europe in this Union. And there is not enough Union in this Union.” Shortly after my arrival in Brussels I met with one of the spokesmen for the Commission who articulated what he considered to be one of the key challenges complicating actions by the European Union: Member State leaders do not consider themselves to be shareholders in a common project; they refer to Europe as it were some distant abstraction.
Another complicating factor is that many Europeans still identify primarily with their nation or region, rather than with the abstract concept of Europe. I am often reminded of the famous statement by Italian statesman Massimo d’Azeglio regarding Italian unification: “We have made Italy; now we have to make Italians”. That process is still incomplete after more than 150 years. It will take time to make Europeans out of the citizens of the 28 diverse Member States.
The challenges the European Union is facing will inevitably require more Europe and more Union. The need to maintain an effective single currency, for example, will require more integration: the completion of the banking union, for example, but that will not be enough. Maintaining the integrity of Schengen will require new instruments at EU level.
Throughout these crises, the US-EU bond is holding firm. I have believed in the European project and in the power of the US-EU relationship since graduate school. I can think of no more interesting and challenging period in US-EU relations in the past 23 years. Back in the mid-1990s the European Community was of course a significant partner of the U.S., especially in the areas of trade, commercial and competition policy. Today, as you know, the U.S. and EU intersect on a wide variety of issues.
Since my arrival I have been struck by the continued relevance, perhaps as never before, of our common transatlantic values. The importance of further European integration and of closer transatlantic cooperation is now more evident than ever. The transatlantic partnership has deepened at times of crisis; the same holds true today. Tonight I wanted to touch on how that partnership has developed and where it may be headed.
THE NEW TRANSATLANTIC AGENDA OF 1995
Twenty years ago the US and the EU signed a document entitled the New Transatlantic Agenda, and an accompanying detailed Joint US/EU Action Plan. I had the opportunity work on these documents during my service as Director for European Affairs at the National Security Council. The NTA was designed as an ambitious project to shift the nature of the EU-US relationship from ad hoc consultations over sporadic frictions (usually related to trade) to regular consultation and longer term joint action on a broad spectrum of issues of mutual interest.
In some areas we fell short of our ambitions; in some we succeeded. I’ll mention a few examples, before providing some brief observations about how we can update this New Transatlantic Agenda to reflect new and emerging priorities over the next twenty years.
Areas of Disappointment
The New Transatlantic Agenda and Action Plan referred to our determination to “reinforce … cooperation on consolidating democracy, stability and the transition to market economies in Russia, Ukraine and the other new independent states.” Obviously, we have not been successful. I reject the revisionist version that the US and the EU somehow exploited Russia’s weakness, thereby leading it to respond by undermining the Western world order. We tried to integrate Russia into the international system. We invited them to join the Partnership for Peace in 1994; the Council of Europe in 1996; the NATO-Russia Founding Act in 1999; the Charter for European Security, the OSCE, again in 1999; and most recently President Obama was Russia’s greatest champion to join the World Trade Organization. The United States specifically tried to “reset” its relations with Russia starting in early 2009. We failed not because Russia saw a military threat from us, but because it saw a threat of democracy at its borders – the result of our success at extending open societies and markets.
The New Transatlantic Agenda and Action Plan stated that the US and the EU “will work together to make peace, stability and prosperity in the Middle East become a reality.” Obviously we didn’t succeed, at least with regard to peace between Israel and the Palestinian Authority; and the Arab Spring has collapsed into violent extremism in many places. On the other hand, the US and the EU collaborated intensively during the talks to limit Iran’s nuclear ambitions.
Areas of Notable Success
But in other areas, I think we can take some credit. I’ll mention just two. The NTA and Action Plan pledged that the US and the EU would “reinforce existing dialogue and cooperation on consolidating democracy, stability and the transition to market economies in Central and Eastern Europe.”
Here we achieved outstanding success. Although the current direction of Hungary is a worry, the Czech Republic, Slovakia, Poland, Bulgaria and the Baltic States are thriving democracies and market economies – thanks in part to the significant technical and financial assistance the US and EU have provided.
The NTA and Action Plan pledged that the US and the EU would work together “to assist recovery of the war-ravaged regions of the former Yugoslavia, and to support economic and political reform and new democratic institutions.” Here again, I think we can take some credit for positive developments. The Dayton Accords established peace in Bosnia and Herzegovina after a tragic war and ethnic cleansing. Croatia and Slovenia joined the EU. In 2001 an ethnic conflict was contained in Macedonia thanks to EU and NATO efforts.
It was only after the end to the Kosovo War in 1999 that relations with Serbia started to be normalized; it is now taking the steps required to meet the criteria for membership. Together we have helped consolidate democracies and the market economies in the region. We have promoted economic and political reforms in Montenegro and Bosnia and Herzegovina. Albania has been transformed; today it is a NATO member and became an EU candidate last year. The US has contributed to the EU’s Mission in Kosovo that has assisted Kosovo authorities with the rule of law. The EU, under High Representatives Cathy Ashton and Federica Mogherini, can take credit for the recent normalization of relations between Serbia and Kosovo.
There are a number of areas mentioned in the NTA where some progress has been made, but where I think more can and should be done. These are: trade liberalization; development cooperation and humanitarian assistance; law enforcement; and migration/asylum issues.
AREAS REQUIRING GREATER FOCUS
In the New Transatlantic Agenda and Action Plan the US and EU pledged to create a “New Transatlantic Marketplace by progressively reducing or eliminating barriers that hinder the flow of goods, services and capital between us.” Specifically, we pledged to investigate ways to facilitate trade in goods and services and to further reduce or eliminate tariff and non-tariff barriers.
The US and the EU have worked closely over the past 20 years at the WTO, including on the recent breakthrough to significantly expand the coverage of the Information Technology Agreement that eliminates tariffs on $1 trillion worth of trade in high-tech products among 54 economies. The US and the EU are also spearheading negotiations on the Environmental Goods Agreement to eliminate tariffs on solar panels, wind turbines, water treatment equipment and other environmental goods. And we are also leading the way on the Trade in Services Agreement that aims to open up markets and improve rules in areas such as licensing, financial services, telecoms, e-commerce, maritime transport, and professionals moving abroad temporarily to provide services.
Although we haven’t made the progress we had anticipated on US-EU free trade, we established the Transatlantic Economic Partnership in 1998 to address obstacles to trade and pave the way for mutual recognition on goods and services. We improved transatlantic regulatory cooperation and set up the Transatlantic Business Dialogue to bring our business communities closer together and have them propose to our governments specific trade liberalization measures. And, of course, we launched the Transatlantic Trade and Partnership Agreement (TTIP) two years ago.
There are manifest economic benefits of a deal, including providing a debt-free stimulus to jobs and growth, needed on both sides of the Atlantic, but above all here in Europe. There are also real and important geostrategic benefits. T-TIP is an effort to actively shape the global trading system and promote a race to the top in terms of standards, rather than engage in a race to the bottom. If the United States and Europe want to strengthen our respective economic power and extend our strategic influence during uncertain times, we must make a decision together: either lead on global trade or be left on the sidelines. There really is no choice.
Development Cooperation and Humanitarian Assistance
In the New Transatlantic Agenda and Action Plan the US and EU pledged “to coordinate, cooperate and act jointly in development and humanitarian assistance activities.” We are achieving real progress in this area. The EU and the U.S. together account for more than 80 percent of all official development assistance worldwide; it is important, therefore, that we coordinate at both a policy and country-program level to improve the quality and impact of international aid and relief.
As part of the U.S.-EU Development Dialogue we have focused on food security, climate change, health, aid effectiveness and security and development. The Dialogue aims to achieve broad policy consensus, coordination, and sharing of information on development issues, approaches, and programs. There has been some early progress, including agreement on roadmaps for cooperation in three sectors and seven focus countries and a draft joint work plan on transparency, accountability and division of labor. Eliminating wasteful overlap continues to be a priority. We are negotiating an agreement between USAID and DEVCO that would allow the EU to transfer funds to USAID for the administration of programs where USAID has a comparative advantage.
In the New Transatlantic Agenda and Action Plan the US and EU pledged to “cooperate on the fight against illegal drug trafficking, money laundering, terrorism, organized crime and illicit trade in nuclear materials.” We have long had strong bilateral cooperation with many EU Member States. Our cooperation on justice and home affairs obviously assumed greater importance after 9/11.
What is new and rather exciting is that the US and Europol, the EU’s law enforcement agency are rapidly deepening their cooperation. For example, we have been collaborating with Europol in cracking down on online child pornography, human and drug trafficking, smuggling and counterfeiting. And we are also cooperating closely with Europol on the Terrorist Finance Tracking Program, an essential tool to combat terrorism.
Since 2010 we have had an interagency working group on cyber security and cybercrime that has focused on promoting public-private partnerships to combat botnets, protecting industrial control systems and improving awareness of cyber issues. At our last U.S.-EU Summit in March 2014, we launched a regular high level U.S.-EU Cyber Dialogue. We are exploring closer cooperation in the field of standardization for the protection of critical infrastructures.
U.S. and EU law enforcement communities are also looking for ways to better stem the tide of foreign fighters from Europe and the United States into these conflict zones. While we combat ISIL in the Middle East, we are also sharing best practices addressing a problem closer to home: how to prevent the radicalization and recruitment of our own young people by these terrorist organizations and to keep them from carrying out attacks like the ones we have seen recently in several EU countries.
Migration / Asylum issues
The New Transatlantic Agenda and Action Plan mentioned immigration and asylum issues, but recent events have significantly underscored their importance. For nearly twenty years, these issues have steadily been shifting from EU Member State competence to an EU competence. Specialized EU institutions such as the External Borders Agency (Frontex) and the European Asylum Support Office have been born. And there are an increasing number of applicable EU laws: the EU Dublin Regulation establishing a hierarchy of criteria for identifying the Member State responsible for the examination of an asylum claim in Europe; and the EURODAC Regulation establishing a Europe-wide fingerprinting database for unauthorised entrants to the EU. But Frontex has been under-resourced and the asylum rules are subject to differing national implementation. As the EU crafts a coordinated approach to the migration crisis, the US has an opportunity to partner with the EU and share its own experiences.
In closing, I want to mention two areas that were mentioned very briefly in the NTA, but where we need to dedicate substantial resources and intellectual focus in any transatlantic agenda for the next twenty years : the digital economy; and energy and climate change. One topic, military security, was wholly absent; but I think there are exciting avenues to deepen our cooperation even here, where Member States have jealously guarded their competence.
The Digital Economy
The NTA was signed in 1995, when the internet was still in its infancy. So it is hardly surprising that digital issues were not even mentioned. Interestingly, the document did state that the US and the EU would “discuss data protection issues with a view to facilitating information flows, while addressing the risks to privacy.” In the aftermath of the Snowden revelations, we have made concrete steps to restore trust in data flows.
President Obama recognized that, given the power and scope of our signals intelligence activities, we need to do more to reassure the world that we treat “all persons … with dignity and respect, regardless of their nationality and where they might reside,” and that we provide appropriate protection for the “legitimate privacy interests [of all persons] in the handling of their personal information.” And so we have now put into place express limits on the retention and dissemination of personal information about non-U.S. persons collected by signals intelligence, comparable to the limits we have for U.S. persons.
The Juncker Commission clearly recognizes the importance and the tremendous potential of the digital economy. We understand the Commission’s Digital Single Market strategy is intended to create the regulatory and market conditions to help companies to innovate, collaborate, invest, create jobs, and drive growth while better serving consumers. This is a vision that we, of course, support. That kind of reform coupled with T-TIP would create the proper conditions for a robust transatlantic digital economy in which EU and U.S. businesses will prosper and find new opportunities.
Energy and Climate Change
We are also following with great interest and support the various proposals for an energy union and the diversification of supply that would reduce Europe’s dependence on Russian energy.
The USG supports a fully functioning and interconnected internal EU energy market.
We support the EU’s efforts to change its energy landscape– to make it more secure, resilient and diverse, especially in the gas market: we are encouraged to see an increase in reverse flow capacity from Slovakia, Poland and Hungary to Ukraine; we welcome LNG infrastructure in Northern Europe and the Baltic states; and we hope to see interconnectors, new pipelines and LNG networks in Southern Europe to provide energy options to Bulgaria, Croatia, Hungary, Serbia and other countries in Central Europe and the Balkans.
And work on the critical Southern Corridor pipeline, that will bring Azeri gas to European markets by 2020, is well under way. The EU has also taken important steps to improve electricity interconnections between Spain and France, and between France and Italy.
Climate change was mentioned only in passing under the 1995 NTA. But in the last few years the US and the EU have been actively collaborating on this topic. A major milestone is the December 2015 21st Conference of the Parties (COP21) in Paris. The aim is to negotiate an agreement that will limit global temperature increases to 2°C. The EU has committed to reduce greenhouse gas emissions by 40 percent from 1990 levels by 2030; existing efforts have met half of that goal already. The U.S. has committed to reduce emissions by 26-28 percent from 2005 levels by 2030; we are on the way to meeting that goal.
Military cooperation was not mentioned in the 1995 NTA. But even here the US and EU are enhancing their cooperation. We are close to signing an agreement between our Department of Defense and the EU Military Staff that would facilitate our sales of military goods and services to EU military missions, especially in Africa. We are also working on ways to improve our coordinationto interdict more effectively the flow of human and drug trafficking in Northern Africa, in particular. We are also making progress on some specific areas, such as hybrid warfare, where the EU and NATO can cooperate more effectively.
After one year in this post I feel very confident that the EU is the essential partner of the United States on nearly every major transatlantic issue and even on many global issues. The global context of the US-EU relationship has changed dramatically in the two decades since we signed the NTA. The 20th anniversary of the NTA this December is an opportunity to refresh and update our common agenda to focus on existing areas of collaboration that can be deepened and to reflect emerging new areas of collaboration. Global challenges make it clear that we need to take into account the new realities we confront in order to secure our common goals and values.