Speech: Ambassador Gardner’s Remarks at the European Policy Centre September 26, 2016

European Policy Center, September 26, 2016

Speech delivered by U.S. Ambassador to the EU Anthony L. Gardner

“The State of Transatlantic Relations”

When I told my son, then aged 13, that I had been appointed US Ambassador to the European Union, he looked at me, his eyes wide with disbelief and said “You?” I thought a lot about that question during the subsequent weeks and months: “Why me?”

And the answer I formed for myself was: I believe in Europe; my mother was a European, an Italian. I am as well. I believe in the European Union and I have done so for the past 25 years, ever since my internship in DG Comp. I believe in the power of the US-EU relationship to do good in the world.

American columnist Tom Friedman recently wrote in a column that putting “European Union” into the lead of a column published in America used to be like a “Do Not Read” sign. That has changed because what is going on in the EU is important, not only for the region, but for the US and even for the world.

54 years ago John F. Kennedy, delivered an address on Independence Day in Philadelphia. He had this to say about the recently created European Economic Community:

“The United States looks on this vast new enterprise with hope and admiration. We do not regard a strong and united Europe as a rival but as a partner…We see in such a Europe a partner with whom we can deal on a basis of full equality in all the great and burdensome tasks of building and defending a community of free nations.”

A few months ago, President Obama delivered a speech in Hannover in which he echoed these sentiments: “…the United States, and the entire world, needs a strong and prosperous and democratic and united Europe.” He quoted former Chancellor Konrad Adenauer: “European unity was a dream of a few. It became a hope for [the] many. Today it is a necessity for all of us.” Today that dream is still alive, despite Brexit.

Soon after the Brexit vote, I received several calls at high levels from within the European Commission urging me to radiate confidence in the future of the EU. I agreed, but wondered: why aren’t more Commission officials and national leaders radiating such confidence rather than outcompeting each other with prophecies of doom?

As you know, the Administration spoke out during the Brexit campaign because of the significant equities the United States had in the vote. But now the United Kingdom has made a historic decision and its democratic choice must be respected. We are tracking closely what an eventual Brexit will mean for us, both in terms of the impact on the United Kingdom and on the trajectory and cohesiveness of the EU.

Never before has Europe, and specifically the future of the European project, been so high on the list of Washington’s concerns. I remain cautiously optimistic, not so much because of Jean Monnet’s observation that Europe is forged in crises, and will be the sum of the solutions adopted in these crises, but because I still believe that Member States see the benefits of collective action. The glue of solidarity is under strain, but still holds. It was clear in the financial crisis and the refugee crisis that uncoordinated actions by Member States could be counterproductive. In my discussions with Washington, I urge my counterparts to see the EU as a moving film, not as a static snapshot that gives a highly distorted view. Who would have thought even five years ago that the EU would take real steps toward external border protection, counter-terrorism, an energy single market or even a digital single market?

I can tell you that we are concerned that Brexit would set back our policy objectives across many fronts, including data privacy, the digital economy, capital markets, climate change and energy security, trade policy, sanctions against Russia, and much else besides. We worry about the resurgence of industrial policy and the protection of national champions, the erosion of support for free trade and free competition and a diminished ability to project both hard and soft power.

And we worry about a continuing tilt in power toward Berlin, not because of concern about Germany but because the European Project has always depended on multi-polarity and equilibrium among its member states.

The special relationship that has long existed between the United States and the UK endures. At the same time, we remain steadfast in our commitment to the European project. A strong, united Europe helps to uphold the norms and rules that can maintain peace and promote prosperity around the world.

The United States has an enormous stake in ensuring that the European Union survives and emerges stronger from these crises. I am reminded literally every day that the United States and the European Union are essential partners in a turbulent world.

Trade and Investment

The economic underpinnings of the transatlantic relationship remain strong. Clearly we are not where we hoped we would be on our trade negotiations. Although 12 EU trade ministers recently reiterated their strong support, the 28 trade ministers of the EU meeting in Bratislava concluded that it’s unrealistic to conclude the talks before the end of the year. But that’s not the real story.

Despite very unhelpful noises coming out of Austria, Germany and France, reflecting the positioning of certain political parties leading up to national elections, we have made good progress over the past three years and continue to do so. Recall that negotiations on the EU-Canada agreement went on for 5 years until 2014 and that it still hasn’t been signed. It looks like CETA will be signed next month, a hugely important sign that the EU is capable of doing big things on trade despite its decision that trade deals are of mixed EU-national competence.

The US and EU have got text on the table in nearly all of the negotiating areas and we’re now deep into the process of resolving differences and negotiating agreement text.

Let me highlight for you a few examples of what we’ve achieved so far:

  • We’ve already agreed to eliminate duties on 97% of our tariff lines.
  • We’re developing a framework for regulatory cooperation to facilitate greater compatibility in future regulations.
  • We’re adopting provisions that will minimize unnecessary and duplicative testing and inspections of manufacturing facilities and products.
  • We’re negotiating provisions that align procedures for audits and import checks relating to food safety and plant health.
  • We’re incorporating obligations to protect the environment and fundamental labor rights, and discussing how we can work together to raise environmental protections and labor standards in other countries.
  • We’ve agreed on a dedicated chapter in T-TIP focused on small and medium-sized enterprises.
  • We’re discussing the importance of transparency and due process in trade defense procedures.
  • We’re working on further opening our respective government procurement markets.

There are still difficult issues on the table, including agriculture – both geographical indications and the elimination of tariff lines on sensitive agricultural products – government procurement, investor state dispute settlement and sectoral regulatory cooperation.

It is essential that we continue to make as much progress as possible, despite anti-globalization and anti-free trade headwinds. In order to do that, we need to change the way in which we explain what we are negotiating. We need to be far less timid in confronting the NGOs for whom myth-peddling has become a very lucrative business model; we need to ensure that these NGOs become far more transparent in terms of who finances them and for whom they speak. And we need to do a better job in understanding the legitimate concerns that the fruits of globalization and free trade are not being fairly distributed: the benefits are being privatized, the costs are being socialized. For me the articulation of the opportunities of globalization and free trade is the central challenge the US and EU will face over the coming years: if we don’t meet it, our democratic free market systems will be at risk.

But let me be clear: TTIP is not the only or even the main game in US-EU relations. The relationship is much broader and deeper than that: we are engaged in a broad set of economic, political and even security issues. Let me start with data privacy.

Data Privacy

In the wake of the Snowden revelations, the U.S. and the EU have made concrete steps to restore trust in transatlantic data flows. All too often in Europe it is falsely argued that Europeans care about privacy, while Americans do not. The United States has had privacy laws before Europe did, and we believe that our privacy regime is as robust as any in Europe. Both the US and Europe are grappling with the difficult balance between personal security and the right of citizens to protect their privacy.

A key priority for me and the U.S. Mission has been the finalization of an EU-U.S. Privacy Shield Agreement to replace and strengthen the former U.S.-EU Safe Harbor Framework that had been invalided by the European Court of Justice. As part of this agreement, the European Commission finds that the United States ensures an adequate level of protection for personal data transferred from the EU to the US under the new framework.

The Privacy Shield represents a significant achievement for privacy, for individuals and for businesses. It includes new privacy protections to be implemented by companies, as well as new U.S. Government commitments and resources to administer the Privacy Shield and oversee compliance. We are confident that the revised framework can withstand future judicial scrutiny because it meets the European Court’s requirement that the US data privacy regime provide protections that are “essentially equivalent” to those in the EU.

Finalization of Privacy Shield allows us now to start negotiating a chapter on data in TTIP. Such a chapter will need to contain the principles that data flows and data processing may take place free from discriminatory terms and trade distorting conditions, with exceptions limited to legitimate public policy objectives and only in full compliance with the WTO General Agreement on Trade in Services. With cloud computing blurring jurisdictional boundaries, we need to make sure that data protection doesn’t become a disguise for data protectionism.

Another development in US-EU data privacy is the recent signature of an agreement on protecting personal information exchanged between U.S. and EU Member State law enforcement authorities. This signature was made possible by the prior passage on a bipartisan basis in Congress of the Judicial Redress Act; this enables the Department of Justice to designate foreign countries or regional economic integration organizations (ie the EU) so that their citizens benefit from the protections that U.S. citizens enjoy under the 1974 Privacy Act with regard to the transfer of data among law enforcement authorities. The President signed this Act in February. We are now waiting for the European Parliament to ratify this agreement. It is urgent that it do so before the end of the year. EU citizens will not benefit from US Privacy Act provisions without such ratification.

Digital Single Market

We are also watching with great interest the roll out of the various legislative packages that fall under the umbrella of the Digital Single Market (or DSM). This program aims to eliminate national barriers to the creation of a true single market for the delivery of digital services. It intends to promote growth in e-commerce, digitization of industry, investment in digital infrastructure, expansion of e-government, and training in digital skills.

We believe that a well-constructed Digital Single Market will benefit both EU firms and U.S. firms serving the European market, many of whom have invested heavily in Europe. We will continue to pay particularly close attention to the evolution of initiatives regarding online platforms, copyright reform, and technology standards.

While we support the vision behind DSM, we are following with concern the efforts of some Member States to push for special regulations governing internet platforms. The rapid adoption of these platforms shows that they create enormous consumer value by improving resource use, increasing competition, reducing transaction costs, reducing asymmetric information between buyers and sellers and bringing new buyers and sellers into the market.

Both European and U.S. policymakers must approach the rapidly evolving digital economy with a shared commitment to make standards work for businesses on both sides of the Atlantic. Collaboration in the development of global standards enables technological innovation by defining and establishing common foundations upon which product differentiation, innovative technology development, and other value-added services can be developed.

I also want to mention very briefly a few other areas where the US and the EU have worked closely: sanctions; law enforcement; energy security and climate change; military cooperation; and humanitarian aid and development cooperation.

Sanctions

Sanctions first. We have worked closely on implementing restrictive sanctions that brought Iran to the negotiating table to agree an historic agreement limiting Iran’s nuclear ambitions. And we have maintained unity in implementing sanctions against Russia after its illegal annexation of Crimea and support for separatists in Southeast Ukraine.

These sanctions were renewed again in July for another six months. And they should continue to be renewed until Russia has fulfilled its commitments under the Minsk process. There should be no partial lifting of sanctions for partial fulfilment of Russia’s commitments. However, it is already clear that sanctions will be discussed at head of state level at the European Council in the Fall and that the discussion will be more difficult than ever before.

The Ukraine crisis should not be allowed to slip down the list of Europe’s priorities: that would be a betrayal of Europe’s commitment to international law and the legitimate aspirations of the Ukrainian people to live as part of a free-market democracy that respects human rights.

Law Enforcement

Another area of US-EU cooperation is on law enforcement. We have, of course, collaborated for many years with many EU Member States; reflecting the increasingly transnational nature of serious crimes and terrorism, the US has been steadily increasing its partnership with Europol, the EU’s law enforcement agency. For example, we have been collaborating with Europol in cracking down on migrant smuggling networks, online child sexual exploitation, drug trafficking and the illicit sale on the dark net of everything from recreational drugs to neurotoxins to firearms.

And we are cooperating closely with Europol on terrorist financing, an essential tool to combat terrorism. We are working to establish close ties between our own National Counterterrorism Center and the European Counterterrorism Centre housed at Europol.

 Energy Security and Climate Change

U.S.-EU collaboration is also deepening in the fields of energy security and climate change. We support the various proposals for an energy union and the diversification of supply that would reduce Europe’s dependence on Russian energy. Project by project, we are working closely with the EU and key countries to change Europe’s energy landscape to make it more secure, resilient and diverse, especially in the gas market. We, the European Commission and at least 9 EU Member States continue to oppose the Nordstream II pipeline between Russia and Germany via the Baltic Sea that would skirt Ukraine and thereby deprive it of transit fees.

We have worked closely with the EU on the historic climate change agreement in Paris in December last year that establishes for the first time an ambitious, durable climate regime that applies to all countries, is fair, focuses both on reducing greenhouse gas emissions and building resilience, includes strong accountability measures and ensures ongoing financial and technical assistance to those who need it. The agreement moves us close to the goal of limiting global temperature increases to 2°C.

Military Cooperation

And we are making significant, even surprising, progress with the EU on the security and defense front. The U.S. and EU have significantly improved our ability to coordinate our military efforts with EU military operations.  In July at the NATO Summit in Warsaw, NATO and the EU made an announcement of their intention to work more closely together in a number of areas, including hybrid warfare and broadening our operational cooperation, in the Mediterranean and elsewhere.

 Development Aid and Humanitarian Assistance

Finally, I want to mention development aid and humanitarian assistance. 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.

Conclusion

So, as you can see, we have a full agenda. The United States needs, as never before, a European Union that is cohesive, effective and outward looking to move forward on these issues and many others. The departure of the United Kingdom would complicate some of the agenda I’ve described, but I’m confident that we can continue to make progress in every area.