Remarks by U.S. Ambassador to Germany Richard A. Grenell at the AmCham Transatlantic Business Conference Berlin, November 30, 2018
As prepared for delivery
Good afternoon! It is my pleasure to be here with you today at the 12th annual Transatlantic Business Conference. Thank you, Olaf for the kind introduction.
I’d also like to thank AmCham Germany for the great job you’ve done in organizing this annual conference and for the invitation to speak here today.
The theme of this year’s conference is “In Trade We Trust.” That’s a message the United States continues to stand behind, 100%. We recognize the close connection between prosperity and peace – between the creation of economic opportunity, and the greater potential for political stability.
Free-market capitalism has raised living standards and created more prosperity than any other economic system – ever.
The free trade system that America helped create after World War II helped bring millions out of poverty around the world. It has also increased the vitality of our own economy.
But over the years, we’ve seen lofty talk of free trade morph into increased tariffs and non-tariff barriers. Make no mistake: President Trump believes in free and fair trade when it actually is free and fair.
Some Europeans have recently criticized what they see as protectionist moves in Washington. But Washington is responding to others’ actions. The current status quo is not free and fair trade. And President Trump is calling out the unfair system.
Let’s take a look at the numbers. Of the 22 major categories of goods, Europe imposes higher tariffs than the United States in 17 of them. One prominent example is cars, where the EU currently imposes a steep 10 percent tariff, compared to just a 2.5 percent tariff in the United States.
Is it any wonder that we have a goods trade deficit with the EU of $151 billion?
Just as consequential are the non-tariff barriers that limit competition from outside the EU. Citizens on both sides of the Atlantic rightly demand high standards for health and safety, which our governments are committed to providing.
But arbitrary or overly restrictive rules serve only to limit trade. These restrictions harm U.S. exporters in a wide variety of sectors, ranging from chemicals to cosmetics to wine.
Let me ask a simple question: when you last visited the United States, did you worry about the safety of the vehicle you rented or the food you ate? I bet not.
And let’s be honest – some of the current regulations are not only harmful to U.S. businesses; they are hurting European companies as well.
I’ve spoken to the CEOs of many German companies, and they consistently tell me that they are being squeezed by bad and misguided government demands, many of which start or end in Brussels. Let me be very clear: Brussels’ regulations are chasing businesses out of Europe.
The Trump administration, however, has achieved incredible success on the economic front in less than two years, as evidenced by real growth of 3.5% in the third quarter and an unemployment rate of just 3.7%.
In fact, unemployment has gotten so low in the United States that there are more available jobs than people to fill them in some cases.
The employment numbers for women are at an all-time high, as they are for African-Americans, Hispanics, the LGBT community, and most every other group.
While this is undeniably a major triumph, I am convinced that President Trump’s deregulatory achievements are even more significant.
Just 10 days into his administration, President Trump signed an executive order mandating that for each new regulation put into effect, two others must be eliminated. Thanks to the President’s commitment to deregulation, our small and medium-sized businesses are no longer being suffocated by red tape and inefficient rules.
We are easing the burden of mandates, orders, and directives issued by out-of-touch government officials who lack expertise on the issues confronting the private sector.
Deregulation enables businesses to prosper, unleashing the freedom and creativity of American workers and innovators.
America’s success puts the pressure squarely on Europe.
Any reasonable observer would conclude that the EU should take a similar track. To keep up, the EU should reduce bureaucratic obstacles, slash costs, promote innovations, and open new possibilities for consumers.
But unfortunately, the EU continues to pursue the opposite course. For example, in the agricultural sector, new technologies in precision breeding through the use of groundbreaking methods such as CRISPR promise to bring major benefits.
For consumers, these benefits can include healthier, higher quality foods. For farmers, these breeding methods increase productivity, promote plant and animal health, and improve environmental sustainability.
However, precision breeding tools will only be developed and used if the regulatory environment supports their commercialization.
Unfortunately, a recent ruling by the European Court of Justice will likely put an end to this sort of innovation for companies across Europe. Consequently, many German agricultural and biotech firms have relocated or are contemplating moving to the United States, in part because of our more supportive approach.
Does it make sense to you that European regulators say that genetically modified food is of no interest to Europeans while at the same time they block it from being offered in Europe?
If Europeans really don’t want this food, why not test the market and prove it won’t sell?
I can also point to the new EU regulations on medical devices that are slated to come into effect starting in 2020. According to both U.S. and European manufacturers, the EU has not yet issued many of the guidelines that manufacturers need in order to comply with the new regulations.
There also aren’t enough European institutions to certify new and existing devices by 2020. That’s because each one of these institutions must first be re-approved to certify devices. Only after the institutions have been approved can they start certifying thousands of devices in waiting – all this between now and 2020!
If nothing changes, there will be a considerable backlog, and many thousands of safe and effective treatments may become unavailable. Here we have a case of regulatory disruption that could prove deadly. The situation is untenable from a patient perspective, to say nothing of higher prices and the drain on innovation.
Finally, I want to talk about the IT sector. It is fashionable in some quarters to slam U.S. “Big Tech” such as Google and Facebook.
Frankly, I think this is a disgrace.
Both of these companies provide free amazing services! I’m reminded of my mother and the free gift that she gets from Facebook every day. From her home in Western Michigan, she is able to keep in touch with her children and grandchildren throughout the United States and around the world.
Facebook has brought great joy into her life by allowing her to connect with those she loves but who aren’t close by. I’d venture to say many of you use Facebook as well.
Meanwhile, the EU claims that Facebook is stealing from the public space and must be punished with higher taxes and regulatory hurdles.
Now I know that my mom “pays” for her free Facebook service by agreeing to provide anonymous data. But we must recognize the incredible service Facebook offers her and countless others: to share the joys and trials of life, see pictures of family, and be a part of other’s lives. These are valuable and priceless gifts.
And in exchange for this service, she tolerates Facebook showing her ads. But sometimes she clicks on the ads when she’s shown a product or website that appeals to her. For her, this is a heck of a deal.
Google is also downright miraculous in the services it offers – again, at no monetary charge to the user. It finds everything we need on the internet, it tells us the best route from Point A to Point B, it saves me money by comparing purchases, and I can take a picture of a German menu and Google Translate will show it to me in English.
Yet again, the EU wants to restrain Google’s ambitions and impose murky and arbitrary regulations of minimal value to consumers that will prevent web-based providers from offering new services. This includes thousands of start-ups that will never get a chance to launch, as a result.
Now, I’m not suggesting that companies should not be held to data privacy standards or that digital companies should not pay taxes. Far from it.
But the United States is firmly opposed to proposals that single out U.S.-based digital companies, especially on the ridiculous grounds that these companies are allegedly “stealing” something. Such proposals will stifle innovation at the very time the EU must compete.
The companies targeted by these measures are among the greatest contributors to job creation and economic growth. Here in Germany, more than a million workers are employed in the IT sector, making it the biggest industrial employer – ahead of the machine-building and automotive sectors. Imposing new and redundant tax burdens on digital companies ultimately harm these and other workers.
In closing, I’d like to emphasize that insisting on fair trade is the best way to ensure the long-term strength of the international system. The benefits of the free market are evident in the U.S. economic upswing, but we recognize that they do not mean that “anything goes” on the international stage.
The Trump administration believes in free and fair trade, and we will use every available tool to counter the protectionism of those who pledge allegiance to free trade while violating its core principles.