There are several reasons why I am pleased to be here today. I grew up believing in the fundamental importance of green issues – including the danger of climate change and the importance of protecting our environment. I heard about these issues nearly every day around the dinner table because my father, a professor of international law (including the law of the sea), participated in the Stockholm Conference of 1972 and the Rio Conference of 1992, as well as being active on population control and multilateral efforts to combat pollution. Our family became very friendly with Al Gore when he was a junior senator from Tennessee; I remember him talking about climate change in the mid-1980s – when it seemed that few shared his concern.
I am here because I made a commitment from the day of my arrival in Brussels that I wanted to make the European Parliament a key focus and that I wanted to meet with a broad section of political groups – not just the EPP, S&D, ALDE and ECR. I have met a number of you already several times: Rebecca, Reinhard, Jose, Yannick and others. Even though we disagree on many topics, as I’m sure we’ll rediscover today, there are actually quite a few areas where we do agree and where we can work together: (1) some aspects of foreign and energy policy, especially as it relates to Russia; (2) the importance of combating climate change; and (3) the need to combat corruption around the world. On these issues your group has shown leadership. Let me address these issues, before mentioning two areas where we clearly do not agree: TTIP and data privacy.
Let’s start with Russia. The coming months will hold other tests for our transatlantic partnership. With strong backing by the European Parliament and in particular by Green MEPs, the EU and United States have stood firm against Russia’s misguided attempts to redraw the borders of Europe. We have raised the cost for the Kremlin of its aggressive policies in Ukraine by imposing crippling sanctions. We agree that these measures should only be eased once Minsk is fully implemented, once Ukraine regains full control over its sovereign territory including its internationally recognized borders. The United States welcomes any signs of progress on Minsk, but let me be clear: we will not consider easing sanctions until Russia implements its Minsk commitments in full. That is what the EP’s resolution of June 10 calls for.
We are deeply concerned by the uptick in violence in eastern Ukraine in mid-November. Separatists have repeatedly attacked Ukrainian forces with small arms, grenade-launchers, anti-aircraft weapons, and high-caliber machine guns. Such attacks undermine implementation of the Minsk agreements, which is the only path to restore peace to the lives of innocent civilians who have suffered from Russia’s aggression in eastern Ukraine. We call on Russia and the separatists to end the violence and live up to their Minsk commitments.
There are important milestones on the horizon in Ukraine. On January 1, 2016, the EU and Ukraine will provisionally apply the Deep and Comprehensive Free Trade Area in spite of Russian threats to ban Ukrainian agricultural products from its market and to exclude Ukrainian goods from the Commonwealth of Independent States (CIS) Free Trade Area. We are counting on the European Parliament to join us in condemning any unjustified retaliation that Russia may employ.
On energy security, the EU has played an especially helpful role through the trilateral gas talks. We are deeply concerned, however, by the threat that the proposed Nordstream II pipeline from Russia to Germany poses not only for Ukraine’s economic wellbeing, but also for Europe’s plans to diversify its sourcing of energy. By redirecting the same supply of Russian gas, projects like Nord Stream compromise the European Energy Union’s efforts to support projects of common interest that aim to bring alternative sources of gas to the region, undermining the very diversification projects we have advanced together.
The consortium behind the project claims Nord Stream 2 is purely a commercial project that is necessary to compensate for reduced gas production in the North Sea and the Netherlands. How can that be when all the existing gas transmission pipelines connecting Russia to the EU are only being used at about 50 percent of capacity?
Gazprom has stated publicly that they intend to stop shipping gas via Ukraine by 2019. The Nord Stream expansion is key to making this threat a reality. The project threatens great economic harm to Ukraine. If the project comes on line, and Russia stops shipping gas through Ukraine as it has promised, it will deprive Ukraine of $1.5 billion in annual transit revenue. Without this revenue, Ukraine would become further dependent on economic support. This is more than just an idle threat.
Your political group has been an unwavering supporter of Ukraine. You ratified the Association Agreement and DCFTA. You approved Macro Financial Assistance for Ukraine. Some of you have paid a price for your support – ending up on Russia’s black list of those no longer able to obtain a Russian visa. I salute your courage and your dedication to a brighter, European future for your Eastern Neighbor.
Ukraine is working toward important reforms with respect to the rule of law, anti-corruption, and institutional transformation. It has taken difficult steps to implement IMF-mandated reforms and is working closely with the European Commission and EEAS to implement the European Agenda for Reform. After years of living in a post-Soviet kleptocracy, public opinion polls indicate that Ukrainians’ number one priority is fighting corruption – a factor uniting Ukrainians from Lviv to Donetsk. This is what the Maidan was about, and is a point I would like to come back to later.
The EP’s resolution on Russia also made important points about the EU’s need to monitor and combat Russian propaganda and to scrutinize and prevent Russian efforts to finance radical and extremist parties.
A second area where I increasingly see a meeting of the minds is climate change, with COP-21 taking place even as we speak. Securing a new climate agreement in Paris is a top priority for President Obama, as I know it is for EU leaders and for this group.
Investing in energy efficiency and renewables plays a crucial role in addressing climate change. Energy consumption is the key driver of greenhouse gas (GHG) emissions. The Obama administration has made unprecedented investments to cut energy waste, and doubled the fuel efficiency of American vehicles. U.S. carbon pollution is now close to its lowest level in almost two decades. We are on-track to reduce overall GHG emissions by 17 percent from 2005 levels by 2020, and we pledged to reduce its GHG emissions by 26-28 percent by 2025.
In the United States, four times as many Americans are employed by renewable energy companies than by the fossil fuel industry. The European renewable energy industry employs 1.15 million people. In the United States, clean energy job growth is double the rate of the economy writ large—and the solar industry is growing at 10 times that rate.
Renewables and efficiency are important. But they are only part of the solution. We need to exploit all of the tools at our disposal to reduce emissions; that includes nuclear and gas.
A new agreement in Paris would establish 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; and includes strong accountability measures. Such an agreement would send a potent signal to the markets, to civil society, and to the citizens of our countries that the nations of the world are tackling climate change and that there is no going back. We have already announced a $3 billion pledge to an international fund intended to help the world’s poorest countries address the effects of climate change.
Just a few weeks ago we made an important step forward when the OECD reached a landmark agreement (sponsored by the US and Japan and adopted by the EU) on the first ever multilateral restrictions on financing for coal-fired power plants. The new guidelines will make more than 80% of coal plants in the global pipeline ineligible for export credit. They allow continued support for the most efficient technology but eliminate support for less efficient solutions in all but the poorest countries.
We think it is important that the Paris outcome include a five-part package with regard to mitigation. First, we need strongest possible INDCs (intended nationally determined contributions) from as many countries as possible. We are greatly encouraged that over 150 countries representing nearly 90 percent of global emissions have submitted INDCs. Second, we need to build in the notion of successive rounds to ratchet ambition up over time, in light of periodic aggregate stocktaking of where we all stand – every five years. Third, countries should be urged to develop notional strategies for the kinds of deeper reductions they hope to make by mid-century. Fourth, the agreement should include a long-term goal for deep de-carbonization, during the course of the century. We are pushing for G-20 countries to deliver on their pledge to phase out and rationalize over the medium term inefficient fossil fuel subsidies. Fifth, the Paris outcome should include a broad expression of commitment and activism by non-state actors such as state and local governments, the private sector and civil society, plus the promise of collaborative action among interested governments.
We have to seize this opportunity. We can finally put ourselves on a path to creating a low-carbon, sustainable, global economy. If we miss this chance now, it would have serious consequences both for climate change and the effectiveness of the multilateral system.
Let me turn to the issue of corruption. The United States is increasingly worried about corruption – not only in Ukraine as I touched on earlier, and not only in Eastern Partnership countries, but also in the Balkans and Central Europe. While every country in the world, including our own, must deal with corruption within its own borders, there is no reason for Europe and the United States not to make fighting corruption central to our foreign policy efforts.
The proceeds of corruption – which are often sheltered in banks or shell corporations in Western Europe and the United States – sustain corrupt regimes, enable organized crime, and may even assist in shielding sources for terrorist financing. Corruption consumes the financial health of a country. It can dispel any value in giving aid, which frustrates U.S. and EU efforts to assist third countries in developing stable democracies, sustainable economies, and the rule of law. Corruption can be exploited by organized crime or hostile governments to influence political outcomes, undercutting U.S. and EU strategic goals across the globe. A culture of corruption and greed even infected the world’s most popular sport and created an uneven playing field, as we have seen with respect to FIFA.
The United States is calling on partners in government, civil society, and the private sector to join us in fighting corruption. We are working with partner governments to recover the proceeds of corruption, for the benefit of the citizens of the affected nations. Examples include establishing the Ukraine Forum on Asset Recovery and the Arab Forum on Asset Recovery.
We recognize this group has been a leading voice for greater transparency by supporting initiatives like the Transparency Register and MEP Code of Conduct. Many support creation of a European Public Prosecutors Office to support EU-wide investigations and prosecutions, and the pooling of expertise and resources. The EP’s Intergroup on Integrity, Transparency, Anti-Corruption, and Organized Crime (ITCO) is another initiative I find to be of great importance. By raising public awareness of corruption, the EP has a vital role to play. I would appreciate your views on ways we might improve our joint efforts.
Let me turn to TTIP. I read your anti-TTIP brochures with some frustration: they contain a long list of false accusations about ISDS; caricatures of US labor rights; lack of transparency; undermining of culture; privatization of water services; undermining of third world interests of trade multilateralism; poor consumer protection in the US and so on.
Allow me to make a case for why I believe a strong T-TIP is in both Europe’s and the United States’ interest. There are manifest economic benefits of a deal on T-TIP, including providing a much-needed boost to jobs and growth for both sides, above all here in Europe. Forget about the specific projections. Just consider the factual record. History shows that free trade agreements can boost exports: just look at the recent EU FTA with South Korea, that has boosted exports by 35% in the three years since it was signed. The United States has had a similar experience with its FTAs. We know that jobs tied to exports earn higher wages on average than those that do not. Why pass up on an FTA that would do the same?
Some of you may be against TTIP because in reality you are against free trade and globalization; perhaps you don’t like the idea of doing a free trade deal with the US. All I can say to you is this: while free trade does losses for some, they are outweighed by gains for others. Globalization is a fact of life; it cannot be escaped. Either we try to shape it or we will be shaped by it. If we fail, other countries that do not share our values and whose weight in the international trading system is growing fast will set the agenda themselves. Those of you who believe that European standards would be weakened to a lower US standard should read the academic studies that overwhelmingly conclude that it is impossible to generalize about standards: some are higher in Europe; some are higher in the US. T-TIP wants to promote a race to the top in terms of standards, rather than engage in a race to the bottom.
I hear so much misinformation about why free trade deals are bad for consumer, health and environmental protections. The US and the EU have been striking free trade agreements for decades, and yet during this time the protections have become stricter, not laxer. It is simply wrong to argue, as I have repeatedly heard and what I read in your own brochure “TTIP: Please do not disturb”, that these agreements are simply vehicles for greedy multinationals who want to make more profit at the expense of our health and the planet.
Critics should read the Trans-Pacific Partnership Agreement (TPP). It includes the strongest commitments on labor and the environment of any trade agreement in history, and makes those obligations fully enforceable through the same type of dispute settlement as other obligations. In fact, TPP will result in the largest expansion of fully-enforceable labor rights in history, bringing hundreds of millions of additional people under ILO standards. TPP also requires all members to combat wildlife trafficking, illegal logging, and illegal fishing, as well as prohibit some of the most harmful fishery subsidies and promote sustainable fisheries management practices.
In T-TIP, some of the U.S. goals with respect to the regulatory aspects also align with efforts on transparency. The T-TIP chapter on “regulatory coherence and transparency” involves quite the opposite concept from the notion of secret deals that would override domestic procedures to ensure democratic accountability. The principal U.S. objectives involve bilateral commitments to greater transparency, public participation and accountability that would be applied on a most favored nation basis – to all potential stakeholders, not just those in the United States or EU. With transparent procedures for developing legislation and regulations, those potentially affected by the regulation can provide data, analysis and views that result in better informed government analysis and more coherent decision-making. The improved quality of the regulations can achieve important objectives – such as better protection of health, safety, and the environment.
T-TIP provides an important opportunity, and if the United States and Europe want to maintain prosperity for future generations 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.
Since my time as Ambassador I have been working to build back trust that was lost due to the Snowden allegations. Reverberations from Snowden were felt in the recent decision by the European Court of Justice in its Schrems ruling.
In 2000, in collaboration with the European Commission, we developed the U.S.-EU Safe Harbor framework, to provide robust, and transparent protections for personal data transferred from the territory of the EU to the United States in the commercial context. More than 4,400 companies have relied on Safe Harbor to transfer data necessary to support transatlantic trade, the digital economy and jobs in both the EU and the US. It has proven critical to protecting the privacy of EU citizens and to supporting economic growth in the United States and the EU.
We understand European concerns over data privacy, and in the aftermath of the Snowden revelations, we have made concrete steps to restore trust in data flows. Since press reports about surveillance began surfacing in 2013, President Barack Obama has ordered unprecedented transparency with regard to U.S. signals intelligence practices, introduced significant executive branch reforms through a Presidential Policy Directive, and championed the Judicial Redress Act, which has now been passed by the U.S. House of Representative and we believe will soon be passed by the Senate. Court documents have been released and independent bodies have been given extensive access and published reports.
President Obama recognized that, given the power and scope of our signals intelligence activities, we needed 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.
We were therefore disappointed by the ECJ’s decision on Schrems, which relied on inaccurate, incomplete and outdated information about U.S. intelligence practices, has created significant uncertainty for U.S. and EU companies and consumers, and puts at risk the thriving transatlantic digital economy. We believe the decision does not credit the benefits to privacy and growth that have been afforded by this Framework over the last 15 years. For the last two years, we have worked closely with the European Commission to strengthen the U.S.-EU Safe Harbor Framework, with robust and transparent protection, including clear oversight by the Department of Commerce and strong enforcement by the U.S. Federal Trade Commission. We will continue to work with the Commission to release an updated framework, and remain committed to providing robust protection of EU citizens’ privacy continuing to grow the world’s digital economy.
The Parliament has a busy next few months ahead of it. In coming weeks, you will consider creation of an EU Passenger Name Record (EU PNR) system to help track foreign fighters and international criminals, and improve security. This legislation is needed. Our own PNR system has proven its value in thwarting terrorist attacks.
You will adapt the EU’s data protection rules to the internet era with a new General Data Protection Regulation (GDPR). You will help shape the EU’s Digital Single Market (DSM) strategy that aims to create the regulatory and market conditions enabling companies to innovate, collaborate, invest and grow while better serving and protecting consumers. We are supporters of DSM and look forward to being partners in the various initiatives to make it a reality.
With that, let me thank once again the Co-chairs for their willingness to host me at today’s discussion. I look forward to having this discussion with all of you.