Remarks at 2015 Europe Conference at Harvard University

Remarks by U.S. Ambassador to the EU Anthony Gardner
February 28, 2015

Thank you for the introduction. It is great to be back at Harvard, where I spent four happy years of my life. I majored in Government, with significant emphasis on Slavic Studies, both of which are proving rather relevant at the moment.

Antony Blinken, one of my Harvard classmates and now Deputy Secretary of State, wrote his Harvard thesis about the dispute between the United States and several of its European allies concerning their support for the building of the Soviet pipeline to Western Europe. In facing down Russia’s current aggression in Ukraine and its continuing efforts to use energy as a political weapon, we need to avoid the transatlantic divisions of that era.

I have believed in the European project and in the power of the U.S.-EU relationship since graduate school. I can think of no more interesting and challenging period in U.S.-EU relations in the past 23 years. When I started work as Director for European Affairs on the National Security Council staff in 1994-95, 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.”

It has always been an error to underestimate the EU’s political will, especially at times of crisis. At times we in the United States forget that it took us 150 years to achieve a fully fledged monetary union: it was not until 1863 that we had a uniform national bank note system and not until 1913 that the Federal Reserve was created.

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. The topics addressed at this conference clearly reflect that fact.

For example, soon after my arrival 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, human and drug trafficking, smuggling, counterfeiting and cybercrime. And I learned during a recent visit to Europol’s headquarters in the Hague that the U.S. has ten full time agents there from different parts of the Government. We have also cooperating closely with Europol on the Terrorist Finance Tracking Program, an essential tool to combat terrorism.

Shortly after my arrival in Brussels last year, a copy of a terrific book by Peter Baldwin, “The Narcissism of Minor Differences: How Europe and America are Alike.” Sigmund Freud coined the phrase “the narcissism of minor differences” to account for the “intense energy invested in parsing divergences that, to an impartial observer, might seem trivial and inconsequential.” The author of this excellent book conducted an exhaustive statistical comparison of the United States and Europe on the economy, crime, health care, education, culture, religion, the environment and much more.

He concluded that though there are many differences between Europe and America, in almost all cases, these differences are not greater than the differences among European nations. The debate about purported transatlantic differences has “degenerated into ideological posturing, motivated by local politics and tactics…Vast cauldrons of rhetorical soup have been boiled from meager scraps of evidence.”

Ever since President John Kennedy, the United States has been a supporter of European integration. This has been so, not out of a starry-eyed idealism, but out of the conviction that a united Europe can be a strong partner of the United States. Naturally, there have been and will be areas where we disagree, but the areas where we do agree are so much more numerous.

Never before have the U.S. and the EU collaborated on such a broad array of issues: not only related to our bilateral economic agenda, but globally about sanctions against Russia, combating violent extremism at home and abroad, responding to Ebola, dealing with numerous refugee crises, seeking to limit Iran’s nuclear program, and many other crises.

Tonight I would like to discuss a few challenges and opportunities we are facing together.

Challenges

We are reminded nearly every day that democracy, tolerance and the rules-based international order are under threat. Our freedoms are not free; they need to be defended. And U.S.-EU cooperation is more necessary than ever before.  External threats, including continuing Russian aggression in Ukraine and the spread of militant Islam, have refocused minds on both sides of the Atlantic on the importance of our shared values and the necessity of working together to address a wide variety of global challenges. We are now, more than ever, essential partners.

The current situation in Ukraine is a prime example, as Ambassador Burns and former NATO Secretary General Rassmussen discussed earlier today.  The Ukraine crisis started with Russia’s refusal to accept the Ukrainian people’s right to choose their own destiny, including signing a free trade and association agreement with the EU. Imagine if in the early 1990s we had told the Balts, or the newly independent countries of Central and Eastern Europe, that they couldn’t join the European family because we didn’t want to annoy Russia? That would have been unthinkable; it would have been immoral.

The real source of this crisis is not the failure of the West to address Russia’s grievances, but rather Putin’s longstanding refusal to recognize that Ukraine is a sovereign country, indeed that it is a country at all. It is clear that the vision of a stable, democratic, prosperous Ukraine is, for Russia, not a dream but a nightmare because it would provide a model, on Russia’s own borders, of another success story and would lead to unfavorable conclusions by Russia’s own people about the direction of their country.

The EU and the U.S. are standing up for the principle of territorial integrity, the rejection of changes of borders through the use of force and respect for international law. Russia’s actions represent a fundamental challenge to our shared values and the rules-based international order; they require a steadfast response and a willingness to bear the costs.

We can be proud that the EU and the United States maintained unity in implementing sanctions against Russia through the Spring and Summer of last year. It took strong leadership at the EU and national level to persuading 28 EU Member States with different economies, histories, and perspectives to support sanctions on Russia. Putin thought he could split the EU and divide the EU from the U.S. on sanctions. He failed. He thought we would not stand by Ukraine financially. He was wrong. Together with the IMF, the U.S. and the EU have provided economic and financial assistance needed to support Ukraine as it continues on its path of reform. In the process of misreading our resolve, Putin has inflicted enormous damage on Russia’s economy and strategic interests.

But our unity will be challenged in the coming months as never before, and not only because of the views and actions of the Greek, Cypriot and Hungarian governments. The EU will have a challenge to ensure that all members understand that solidarity is a key obligation of membership.

While keeping the diplomatic path open, we need to be careful to be realistic about the likelihood of success. We must continue to judge the commitment of Russia and the separatists by their actions, not their words. The United States is prepared to consider rolling back sanctions on Russia when the Minsk agreements of September 2014, and now this agreement, are fully implemented. But, as U.S. Ambassador to the UN Samantha Power has observed: “Russia speaks of peace, and then fuels conflict. Russia signs agreements, and then does everything within its power to undermine them. Russia champions the sovereignty of nations, and then acts as if a neighbor’s borders do not exist.”

We have made clear that, if Russia continues to violate the Minsk agreements, including the most recent agreement signed on February 12, the costs to Russia will rise.  We will continue to consult with our European partners to assess the implementation of the agreement and next steps on sanctions. This will be a major theme for the meeting between European Council President Tusk and President Obama on March 9 at the White House. His keen understanding of Russia and his moral authority make him a valued and respected interlocutor.

Just as we need to work together to prevent Russia’s goal of destabilizing Ukraine, we need to work together to ensure that Russia fails to undermine European governments through corruption, to shape media commentary through crude propaganda and to gain a chokehold on European energy supplies and critical infrastructure through shady business deals. We are also following with great interest and support the various proposals for an energy union that would reduce Europe’s dependence on Russian energy.

The security threats that we face are not limited to threats against territorial integrity, however. Over the past year, we have seen ISIL commit barbaric acts in the Middle East, at the same time that extremists have hit closer to home in Brussels, Paris, and Copenhagen.  The United States and Europe are working together to address both sides of this problem.  Our 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. The joint statement released by EU and U.S. ministers of the interior after the Charlie Hebdo attack explicitly called for greater sharing of intelligence information, including the full use of the resources of Europol.

While we combat ISIL in the Middle East, however, we are 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 Europe.  Just last week President Obama welcomed political and community leaders from Europe and around the world to Washington for a Summit on Countering Violent Extremism. The Summit included a ministerial-level meeting focused on improving the use and sharing of information to counter the threat posed by foreign terrorist fighters. Continued U.S.-European cooperation remains essential in this effort, from hitting ISIL in Iraq and Syria to sharing best practices on countering radicalization in our own nations.

In our fight against terrorism, both European and American officials and citizens seek to define the right balance between security and respect for privacy. As President Obama has noted, the challenges posed by threats like terrorism and proliferation and cyber attacks are not going away anytime soon, and signals intelligence activities play an indispensable role in how we learn about and protect against these threats. During her recent visit to Washington, Chancellor Merkel recognized the importance of intelligence sharing between the United States and Europe in light of the terrorist threat.

This is not at all meant to downplay European concerns over how intelligence gathering has been conducted in past years. This Administration has listened to these concerns and has been addressing them. The President’s Policy Directive on signals intelligence issued just over a year ago, and the subsequent Status Report on the development and implementation of procedures under the Directive, required limits on the retention and dissemination of personal information about non-U.S. citizens collected by signals intelligence, similar to those limits required for U.S. persons. As the General Counsel of the Office of the Director of National Intelligence noted a few weeks ago:

“For the first time our nation has instituted express and transparent requirements to take account of the privacy of persons who are not our citizens or residents in how we conduct some of our intelligence activities. These new protections are … a demonstration of our nation’s enduring commitment to respecting the personal privacy and human dignity of citizens of all countries.”

We have made significant progress in the Safe Harbor Framework update through discussions with the European Commission throughout 2014.  By the end of 2014, we had provided responses to all 13 of the Commission’s recommendations about how to “upgrade” the Framework, and I am optimistic that the result will be an improved and beneficial Safe Harbor Framework in the near future.

In parallel with progress on Safe Harbor, U.S. law enforcement agencies and DG Justice are close to completing the long-sought umbrella law enforcement Data Protection and Privacy Agreement.  In this context, I personally advocated for – and the White House agreed to – seeking new U.S. legislation to provide foreign nationals with an equal right of judicial redress to that enjoyed by U.S. nationals in instances where it is alleged that personal information is misused by law enforcement agencies.

I sincerely hope that we can wrap up both the Safe Harbor and the umbrella law enforcement negotiations by June, so that we can together focus on areas of opportunity. They are many, but let me mention two briefly.

Opportunities

First, the digital economy. Commission President Jean-Claude Juncker has put creation of a digital single market at the top of his agenda, stating that “the Internet and digital communications can transform our economies as profoundly as the steam engine did in the 18th century or electricity did in the 19th century.” We agree.

The beneficiaries of the expanding digital economy are not just the American tech giants. Successful European Internet start-up companies have emerged in substantial numbers, building, incidentally, off the platforms provided by some of those very U.S. companies. To cite just one example, the launch of Apple’s ITunes App Store in 2008 created an industry from scratch. This has not only delighted consumers worldwide; it has also spawned significant business and job growth, including in Europe. According to a report prepared for the European Commission, EU app developers took in 17.5 billion euros in revenue in 2013. That figure is forecast to increase to 63 billion euros by 2018. That same report predicted that the EU app developer workforce will grow from 1 million to 2.8 million over the same period.

Amazon is another example. It has enabled many European SMEs to sell their goods on the internet, including cross-border and even across the Atlantic, for the first time. If it were a European company, it would be probably be upheld as the leading example of what the European Commission is trying to achieve in establishing a pan-European digital economy.

But we also must face the fact that rapid technological change has generated reaction, more so in Europe than in the United States.  In recent months proposals for a “European Cloud” and for a “Schengen [zone] for data” have proliferated in Brussels and other European capitals, while some Member States have argued for measures that would lead towards fragmentation of the Internet.  Neelie Kroes, formerly the European Commissioner in charge of the digital agenda, has warned openly about the risks.  In an article entitled “Europe needs data protection, not data protectionism”, she warned that Europe will not be “connected, competitive, open and secure…if we run away from data.”  “Keep our data locked up in Europe,” she argues, “and we lose an opportunity; without gaining any security.”

These measures, leading to a Balkanisation of the Internet, are not what Europe needs.  In an era of digitally enabled global supply chains, manufacturing and exports are heavily dependent on secure, cost-efficient and real time access to data across borders.

The technologies of today provide us with an opportunity. To take full advantage of it, American and European policymakers need to strike the right balance in regulation to both protect privacy and create an environment that encourages innovation, produces new jobs, and improves services to students, patients, and consumers.

I also want to make a few observations about another opportunity: T-TIP. I don’t intend to repeat all the arguments in favor of T-TIP tonight. Today’s earlier panel did that. I simply want to focus on the geostrategic benefits. Naturally, T-TIP will have to stand on its own economic merits to be approved by parliaments on either side of the Atlantic. But the geostrategic benefits are real and important.

T-TIP would set a standard for future regional and global deals that reflect the value we place on rules-based trade, high standards, and regulatory transparency and accountability.  It would enhance the U.S.-EU global partnership in the realm of trade negotiations, helping to make progress in stalled WTO talks and ensuring that world trade rules will continue to be compatible with free-market democratic systems.

We have a window of opportunity during the next few years to set a standard for future regional and global trade deals that reflect our shared support for rules-based trade, high standards and regulatory transparency and accounta-bility. Globalisation 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 who do not share our values and whose weight in the international tradition system is growing fast will set the agenda themselves. As President Obama stated during his State of the Union address a few weeks ago:

“…China wants to write the rules for the world’s fastest-growing region. That would put our workers and our businesses at a disadvantage. Why would we let that happen? We should write those rules. We should level the playing field.”

The critics of T-TIP should reflect on the consequences of the U.S. and EU failing to set the trade agenda themselves.

There are critics who claim that T-TIP would lead to a dilution of health, safety and environmental protections. We are interested in doing the opposite. As USTR Mike Froman has recently argued in an article entitled “The Geopolitical Stakes of America’s Trade Policy,” published in Foreign Policy, the United States wants to “launch a race to the top, rather than be subject to a race to the bottom that we cannot win and should not run.”

“In the Asia-Pacific region, for example, over 200 trade deals have been struck in recent years and more are currently under negotiation. Unlike TPP and T-TIP, the vast majority of these agreements make no commitment to protecting labor rights and environmental standards, creating disciplines on state-owned enterprises, and promoting the digital economy.”

Conclusion

Rahm Emanuel, former Chief of Staff to the President, said about the financial crisis that “A Crisis is a terrible thing to waste.” In late March The Economist published an article entitled “Putin’s Arrow: The Crisis in Ukraine is Reinvigorating Transatlantic Ties.” The cartoon featured Putin as cupid, bare chested and wearing army fatigues, just after firing his arrow at a tree where the U.S. and EU have carved their initials in the shape of a heart. In the distance, President Obama and a woman dressed in the EU flag are walking hand in hand. As the Economist article argued, “Russia is reminding both sides of the ties that bind.” The crisis is reminding us of the “narcissism of minor differences.”

Just as European integration has always taken big leaps forward at times of crisis, especially external threat, so can the transatlantic relationship take a major step forward at this historic time. We can not, we must not, let this opportunity borne of crisis go to waste.