Priorities for the U.S. Mission to the EU

Remarks by Ambassador Gardner

June 18, 2014
Brussels, Belgium

(As prepared for delivery)

Thanks for that introduction, Stu. You have been a dear friend of the Gardner family and a dear friend and mentor of mine. When I look at the photographs of my distinguished predecessors in the lobby of the USEU Mission, I feel privileged and humbled to be in my position. There have been many effective Ambassadors to the EU, including my predecessor Bill Kennard who is remembered for both his substance and his style, but it is a testimony to Stu’s stellar service here that he is still remembered and admired among the diplomatic and business community.

When I returned to Brussels in 1996, it was Stu who hosted a reception for me. When I completed a short book on my experience in the White House working on the New Transatlantic Agenda, it was Stu who wrote the foreword. And when I wanted to collaborate on articles for the Christian Science Monitor and Foreign Affairs on the impact of the Lisbon Treaty for US-EU relations, it was to Stu that I turned.

Stu has not only been a mentor; during the very long confirmation process he was also a soothing voice, telling me that the frustrations would be worth it. And there were frustrations. The vetting process is not tailored to someone like me who has spent half his life in Europe. I was asked to supply 15 years of foreign travel records. I was asked to provide the names of all foreign nationals with whom I have had ties of “affection or obligation.” I was tempted to ask for a definition, but resisted. Instead I supplied an annex with the names, addresses career histories of my wife’s 30 Spanish cousins. My Spanish wife was also in the annex. The second part of the question asked to describe, the frequency, nature and intensity of each contact with each foreign national!

The frustrations are, of course, worth it. This has been my dream job for an embarrassingly long time. I can think of no more interesting and challenging period in US-EU relations in the past 23 years. The opportunity to work together with my old friends, classmates and former colleagues in the Clinton White House, such as Mike Froman, our U.S. Trade Representative, and Tony Blinken, Deputy National Security Adviser, is truly once in a lifetime.

It’s good to be reunited with Stu once again in Brussels. It is hard to believe that 20 years have elapsed since the time we were collaborating on U.S.-EU relations. I had arrived in Washington in October 1994 to start my job as Director for European Affairs on the National Security Council staff. Most of the five people in the European directorate were preoccupied with the Bosnian War. When I declared that I wanted to focus on EU affairs, several people in the building remarked: “That’s great, because no one else here cares about that stuff.” And when I placed one of my first calls to the office of the Secretary of the Treasury to inquire what the U.S. position on the planned common currency was, I was told: “We don’t need to have a position because the common currency will never happen.”

As a result of this attitude, I was given – despite my young age — a tremendous amount of freedom to work on the issues I have cared about since studying EU law and politics as a graduate student at Oxford and Columbia Law School. I participated in three U.S.-EU summits, regularly met with the EU’s leaders when they visited Washington, and traveled with President Clinton to Europe. Above all, I was lucky to be Stu’s man on the ground. Together we worked hard on a wide variety of issues, including perhaps most notably the New Transatlantic Agenda, signed at the U.S.-EU Summit in December 1995 in Madrid. That document called for the U.S.-EU relationship to move from joint consultation to joint action in a number of areas; much of this has happened. And it called for a “New Transatlantic Marketplace,” the precursor of -TTIP, and formalized the Transatlantic Business Dialogue which continues to this day.

Today no one either at the National Security Staff or in other Washington agencies would say about EU affairs that “No one cares about that.” 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. This is reflected in the fact that of the 160 staff at the USEU Mission, only half come from the Department of State: the rest come from the Departments of Agriculture, Justice, Commerce, Homeland Security, Treasury, Defense, as well as USTR, FDA, FAA, USAID among others. The breadth of our activities was driven home to me soon after my arrival when I learned about what we are doing in law enforcement: we have been collaborating with the EU in in cracking down on online child pornography and in the investigation by a specially constituted court of alleged crimes in Kosovo.

We are one of the few embassies around the world which is growing despite budgetary pressures: the Patent and Trademark Office is opening a bureau and the FDA is adding to its presence. The relevance of the EU is manifest in other ways as well. At the White House there is even a Director for EU Affairs, surely a sign of the times. Stu noted in his foreword to my book that “Major U.S. news publications have no news bureaus or even full-time correspondents based in the ‘capital of Europe.’” (1)  That too has changed.

I started my assignment as U.S. Ambassador to the EU three months ago. In that short period the U.S. Mission to the EU has welcomed President Obama twice, the first time for a U.S.-EU summit and the second time last week for a meeting of the G-7; and we welcomed Secretary Kerry here for a meeting of the U.S.-EU Energy Ministerial. And I have been busy since my arrival defining what my key priorities will be for the next three years.

The top two priorities, requiring immediate focus, are: (1) making progress on the negotiations underway to update the Safe Harbor Framework and the conclusion of a Data Privacy and Protection Agreement; and (2) ensuring strong relations with the new members of the EU institutions, namely the College of Commissioners, the Council, the European External Action Service and especially the European Parliament – which will play a critical role in U.S.-EU relations, including on issues such as data privacy and the Transatlantic Trade and Investment Partnership Agreement (T-TIP).

The third and fourth priorities have a longer term perspective: (3) playing an important supporting role to the Departments of State and Energy in their efforts to enhance the energy security of the EU and Ukraine; (4) fully engaging on T-TIP in ways which I shall describe in a moment.

Data Privacy

Let me start with the issue of data privacy; it is the single most critical issue today in U.S.-EU relations, because it has major implications for the way we cooperate on law enforcement, the ability of companies to do business across the Atlantic, and so much more. I was living in London when the Snowden revelations were made public, and I saw the firestorm that erupted in Europe.  This issue may have been pushed off the front pages for the time being because of Mr. Putin, but I have no doubt that if it is not dealt with effectively it will return to spoil U.S.-EU relations during my tenure. I am intently focused on making as much headway as possible by the time the European Parliament starts work in the Fall. This is consistent with the March 26 U.S.-EU Summit communiqué, in which the leaders pledged to expedite negotiations regarding the Safe Harbor Framework and the so-called “umbrella agreement” for data exchanges in the field of police and judicial cooperation in criminal matters, including terrorism.

The Safe Harbor Framework was developed to provide a mechanism allowing self-certified companies, based in the U.S., to receive EU citizens’ data in a manner consistent with the EU Data Protection Directive.  Last November, the Commission outlined thirteen recommendations for strengthening the Safe Harbor Framework, eleven of which are commercially-focused while the final two relate to the national security exemption. We have since embarked on discussions with the Commission on potential updates to the Framework; we have made good progress on the commercially-focused recommendations and are now focused on the national security exemption. Talks on the “umbrella agreement”, already in their third year, are well-advanced. We are working hard to resolve the remaining issues, including judicial redress for EU citizens.

While the U.S. will certainly continue to use its signals intelligence capabilities for legitimate national security purposes, it is seeking to take the concerns of its friends and allies into account.  It shares the EU’s commitment to privacy and is responding to EU concerns and questions about how it protects personal data.

In January, the President gave a major policy speech on surveillance and issued a Presidential Decision Directive that lays out principles that govern what we do and don’t do abroad.  The President also called for the extension of additional protections to the personal data of non-U.S. citizens, a key request of some of our European partners.  In his recent report on Big Data’s implications for privacy, White House Counselor John Podesta recommended that certain rights under the Privacy Act be extended to non-U.S. citizens where practicable or that alternative privacy policies be established to apply to personal information regardless of a person’s nationality.

While we support the EU’s efforts to update its data privacy rules, we want to ensure that the new EU regulation and directive will support cooperation and trade, as well as uphold pre-existing data privacy agreements and adequacy determinations.  They shouldn’t create unnecessary barriers for companies to comply with lawful requests from U.S. judicial and administrative authorities for EU-origin data. Moreover, intergovernmental cooperation is increasingly important as crime becomes increasingly trans-national, due to the internet, the increase in travel, and the increase in international banking and other money flows.

We must expand cooperative law enforcement efforts with EU member states and the EU institutions to make the world safer from crime and criminals. The murders at the Jewish Museum in Brussels highlight the importance of strengthening our efforts to prevent and counter violent extremism.  Agreements such as the Passenger Name Record and the Terrorist Finance Tracking Program, which prevent terrorism while respecting privacy, are critical tools in our transatlantic cooperation.

Relations with the EU Institutions

Let me turn to my second priority: ensuring strong relations with the EU institutions in this time of change. With regard to the European Parliament, we are prepared to work with all political groups and leaders that support fundamental principles of human rights, democracy, and rule of law. Although there has been a notable increase in the representation of euro-skeptical and nationalist parties, I note that their effectiveness may be undermined by their differences and that the European Peoples Party, Socialists & Democrats and the Alliance of Liberals and Democrats in Europe will together hold roughly two thirds of the votes. Since it will not be possible to form a center-right or center-left majority, a minimum condition for a stable majority will be a grand coalition between the two main centrist parties.

My view is that the impact of the elections may be more keenly felt in UK and French national politics than in the European Parliament itself. The USEU Mission has watched with interest the emergence of “Spitzenkandidaten” as a bid to increase voter interest in Europe. It is for the Member States and the institutions to decide who will lead the Commission, as well as fill other jobs such as the President of the European Council and the High Representative, but we are of course very interested in the eventual outcome.

With regard to the European Parliament, I believe that there is more that we can do to strengthen ties between it and the U.S. Congress. I will be exploring the possibility of staff exchanges and having members of the U.S. Senate participate in the Transatlantic Legislators Dialogue.

The European External Action Service will remain a key focus for the USEU Mission. In the articles we co-wrote just after the ratification of the Lisbon Treaty, Stu and I predicted that the EEAS would be one key reason – along with the creation of the role of European Council President and the downgrading of the prior system of semi-annual rotating presidencies – why the EU would become a stronger foreign policy partner of the US when facing common threats. (2)  “If this new diplomatic corps builds broad and deep expertise on foreign policy and facilitates the emergence of an EU-wide perspective,” we wrote, “it may prove to be the Lisbon Treaty’s most significant innovation.” (3)  I think we have been proven right, at least so far, in this regard.

In those articles we referred to the harsh lessons the EU learned during the breakup of Yugoslavia in 1991-92, the Bosnian war of 1992-95 and the US invasion of Iraq in 2003. When hostilities broke out in Yugoslavia, Foreign Minister Jacques Poos of Luxembourg – the country holding the rotating presidency of the Council – famously declared “This is the hour of Europe, not the hour of the Americans.” The failure of the EU to act as a coherent actor on the world stage during those crises stands in sharp contrast to its coherent and relatively rapid decision-making in the rounds of sanctions against Russia after its illegal annexation of Crimea.

The lists of sanctioned individuals differ slightly from those of the U.S.; they do not cover Putin’s so-called “cronies” and their affiliated companies; and the EU was slower to act than the United States. But it is nonetheless remarkable that the 28 member states have been able to take significant actions, notwithstanding differing perspectives and vulnerabilities. The coordination among the US Government and the Commission and Council on Russian sanctions has been exemplary so far. In light of Russia’s continuing efforts to destabilize Ukraine, and its failure to recognize the outcome of the election, may lead to further sanctions which will test our resolve to remain coordinated. The U.S. Mission to the EU would also play an important role in that regard.

Stu and I also wrote that “…there are no signs that the Lisbon Treaty, or the EU’s security policy generally, is likely to undermine NATO.” In this regard I think we will also be proven correct. Indeed, I am pleased that the Department of Defense has warmed to the idea of collaborating with the EU Military Staff, after years of theological debates about whether doing so would “bless” the EU’s aspirations in the field of defense and as a result weaken NATO. The United States European Command and the EU Military Staff are close to agreeing an Acquisition and Cross Servicing Agreement which will provide a legal framework for the sale of military goods and services, on a case by case basis, to support EU military missions – above all in Africa where NATO may not have the appetite or the capabilities to take a leading role.

In one notable respect, however, Stu and I made an error in our assessment: we questioned the choice of Cathy Ashton as High Representative. We were proved wrong, along with many other skeptics. She has earned widespread praise for her role in building a significant External Action Service from scratch and for her role in brokering peace talks between Serbia and Kosovo, and also for her role in the Iran nuclear negotiations, her support for the Middle East peace process, and in other regions as well, such as Northern Africa. She and Secretary Kerry have worked very closely and effectively, in a spirit of genuine mutual admiration.

The United States and Europe have reinforced each other’s use of diplomatic influence in other areas as well. For example, we have acted to protect millions of Syrians in peril.  Together we have mobilized almost $5 billion in humanitarian assistance since the crisis began three and a half years ago.  In fact, the United States, the EU and its member states provide over 60% of all humanitarian aid worldwide, reflecting both our long-standing global leadership and also our shared values.  In other crisis zones, such as South Sudan, the Democratic Republic of Congo, and the Central African Republic, we and the EU have supported measures to help get aid to those in need. When we join forces, we can have an enormous impact on the lives of refugees and vulnerable people worldwide. I think there is significant potential to deepen the collaboration between USAID and the EU’s DEVCO and ECHO, responsible for development and humanitarian assistance respectively, in order to maximize the impact of our dollars and euros.
Energy Security

As I noted at the outset, energy security will be my third, longer-term, priority. Europe cannot be an effective partner of the United States if it remains subject to Russian energy blackmail. Every crisis has a silver lining, and the Ukraine crisis is no different. By unilaterally redrawing boundaries by military force for first time since the Second World War and by continuing to provide weapons and other support to the separatists in Eastern Ukraine, Putin has make starkly clear to Europe the need for deeper European integration and transatlantic cooperation. He has highlighted the urgency of increased defense spending, which in some NATO countries continues to be alarmingly low. And perhaps most concretely, he has prompted the EU, finally, to take a serious look at its energy security. Gazprom’s recent decision to shut off gas to Ukraine (yet again) has underscored the fact that Russia is an unreliable supplier.

The recent U.S.-EU Energy Ministerial in Brussels agreed a blueprint for action covering short-term measures to enhance energy security in Ukraine. These measures include “reverse flow” agreements to allow gas to flow West to East, increased gas storage to provide a buffer in case Gazprom shuts off the tap this winter, and the reduction in the energy intensity of the Ukrainian economy. Some medium to long term measures were also discussed, such as the construction of North-South pipeline interconnectors and pipelines to bring on stream new sources of gas supply, such as from Azerbaijan, Israel and Cyprus, without touching Russian territory.

Europe has and can continue to take some important steps on its own. Under threat of a law suit for infringing the EU’s Third Energy Package, Bulgaria has stopped construction on the South Stream pipeline to bring Russian gas to Europe without transiting Ukraine. This pipeline was to be constructed by Stroytransgaz, controlled by Gennady Timchenko, who is subject to U.S. sanctions. The recent proposals by Polish Prime Minister Tusk to create a European energy union deserve serious consideration. Infringement proceedings against Gazprom for violating EU competition law would make clear to Moscow that it will not be permitted to use energy as a political weapon to divide and conquer Europe.

There are many ways in which the U.S. and EU can collaborate on energy security. These may include increased LNG exports from the United States, the mobilization of private capital to build the necessary infrastructure in Europe, collaboration on enhancing the transparency of Ukraine’s energy sector, assisting Ukraine to develop national hydrocarbon resources, and sharing experiences in the development of alternative energies. The U.S. and EU have recently extended their Science and Technology Agreement which will also encompass collaboration between the US Geological Survey and the Joint Research Center on shale technology.

T-TIP

That brings me to the fourth priority: T-TIP. We will soon reach the one-year anniversary of the beginning of the T-TIP negotiations.  The sixth round takes place in July, and we’re making steady progress in all of the working groups. We have consolidated draft texts in five areas. We have tabled offers in tariffs and the U.S. has recently tabled an ambitious offer on services. The roles of the USEU Mission in these talks will be public diplomacy, intelligence gathering and strategic advice to USTR on the technical aspects of the issues, the coalitions that can be built and the tradeoffs that can be made.

You are well aware how a comprehensive, ambitious agreement would benefit both sides of the Atlantic: not just because of growth and jobs that would be created from eliminating tariffs and reducing “behind the border” non-tariff barriers, but also because of the geostrategic importance of setting a template for future regional and global deals that reflect the value we place on rules-based trade, high standards, and regulatory transparency and accountability.

Despite the benefits that would flow from a deal, the media coverage – especially in social media in certain EU member states – has started to turn negative. The narrative is often a flagrant mischaracterization of what we are trying to do.

We stand accused of wanting to force European consumers to eat hormone treated beef and genetically modified foods; the truth is that we simply want the EU to follow the advice of its own scientific bodies, including the European Food Safety Agency, rather than allow some member states to block decisions and abuse for political ends clearly defined decision-making procedures.

We stand accused of wanting to lower health and environmental standards; the truth is that in many areas U.S. standards are higher than those in the EU and that there is no appetite among the US administration, regulators or Congress to lessen the protections that US citizens expect.

We stand accused of wanting to give a hand-out to big business, especially through the investor state dispute resolution provisions; the truth is that we are particularly focused on the benefits of T-TIP for small and medium-sized businesses and that investor-state dispute settlement is an important component of a 21st century model trade agreement that will give business the confidence to commit the long-term risk capital that will create growth and jobs.

The public diplomacy won’t be easy, however. Much of the criticism of T-TIP actually has nothing to do with the issues; after all, the EU-Canada agreement has not been controversial. The concerns appear to be related to globalization, anger with national governments over austerity and fears that more open trade with the US will lead to lower quality of life and fewer protections for data privacy.

I think our strategy has to change: I intend to take the debate to the critics, rather than accept speaking engagements only from the usual business federations where we preach to the converted. I intend to meet with representatives of civil society that have an open mind – including from labor, environmental and consumer groups; and I intend to focus in particular on rallying small and medium sized businesses because they struggle to spend the resources to deal with the bureaucratic red tape that we hope to reduce.

I believe this public diplomacy has to be centered on stories, not statistics: simple language that ordinary people can understand. I will be focusing on the importance of T-TIP as the single best debt-free stimulus for jobs and growth available for Europe. Growth has returned in most EU economies, but it is uneven, modest and largely jobless. There are several levers of growth in Europe, such as the completion of the single market, especially in services, and progress on the digital agenda; but T-TIP is, according to all the serious studies done to date, an important one.

The public diplomacy effort will also focus on: informing permanent representatives of the Member States and the new members of the European Parliament about USTR’s positions in the negotiations; ensuring close coordination among the USEU Mission and the US bilateral embassies in the EU member states; and working with thought leaders, such as respected think tanks, businesses and journalists. I intend to focus in particular on building strong relations with the European Parliament, particularly with the members of the International Trade Committee.

On the regulatory convergence chapter of T-TIP, I believe the USEU Mission has an important contribution to make in defining – together with the SME community and like minded member states – the changes in EU decision-making that would make it more transparent, inclusive and accountable. We believe that these changes would make it more likely that future U.S. and EU regulations are consistent.

These are not uniquely American principles. This issue is not about forcing “our way” of regulation on the EU. These principles are respected in many European countries and are part of the EU’s regulatory reform agenda. And I can tell you that not only many EU Member States, but also many European businesses — especially small and medium sized ones — want to see these principles respected.

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In closing, let me say that I intend to make the most of this opportunity. The fact that I have roughly three years in my mandate before I return to private life allows me to take risks that some career diplomats might wish to avoid. I will not be a passenger in a bus, enjoying the scenery and simply going along for the ride. I am too committed to the cause of U.S.-EU relations to do that. In his foreword to my book, Stu wrote:

“I have been an un-abashed Euro-enthusiast because I believe that the European Union serves American as well as European interests. Problems arise from time to time with a strong, more united independent voice on foreign policy issues…but these problems are more than offset by the fact that on the big issues we are always likely to have more convergence than divergence because we share the same values, outlook, history, culture and commitment to expand democracy and free markets around the world.”

I agree entirely. And I am fortunate to have the opportunity at this historic time, together with the highly talented team at the USEU Mission and the EU institutions, including the EU Mission to the U.S., to drive the convergence on the big issues that I’ve described.

Thank you.
(1) Anthony Laurence Gardner, A New Era in US-EU Relations? (Avebury Press, 1996).

(2) Stuart Eizenstat and Anthony Luzzatto Gardner, “How the Irish ‘Yes’ Vote Helps Europe – and the US,” Christian Science Monitor, October 6, 2009.

(3) Anthony Luzzatto Gardner and Stuart Eizenstat, “Europe’s Chance to Punch its Weight,” Foreign Affairs, March-April 2010.