Toespraak eurocommissaris De Gucht (handel) over handelsrelatie EU-VS (en)

Mr Chairman,

Ladies and Gentlemen,

It is a great pleasure for me to be here in Washington and to be offered the podium of the U.S. Chamber of Commerce, the main voice of business in America. And business is a prime player in the world of trade, along with consumers and governments.

The US and the EU are economies of continental size. The overall weight of international trade in goods and services in our economies is about 30%, clearly less than in China, India or Russia where it is twice as high. We are relatively closed, but that does not mean, of course, that international trade is not important as an engine of growth. This year and last, about half of European growth arose from higher exports, and President Obama counts on a doubling of exports in five years to boost the economy here.

The gains from trade often tend to get drowned out in public debate and are therefore worth repeating time and again. Trade fosters greater production efficiency, more competition and more consumer choice.

Trade and foreign direct investment matter to us both a great deal and the future will be no different. World trade, which took a battering in 2008-2009 has recovered swiftly and we are again above pre-crisis levels.

That is not to say, though, that all is nice and dandy on the trade policy front. There are persistent challenges and we must find the resolve to tackle them. Doing so will bring large benefits in the years, even decades, ahead.

In my short talk of today, I will address only two, but we can of course expand in the discussion, for example on China, Russia or North Africa, to name but three topical subjects.

***

The first challenge I shall raise I was actually advised NOT to raise. I was told I would run the risk that my speech in this Chamber would go down like a lead balloon. But I am a stubborn man and, more importantly, I do believe that we, governments and business, would be well advised to reflect carefully before we take decisions that we may regret later. I am talking about the future of trade multilateralism and finishing the WTO's Doha Round.

I bring up this subject not because Europe has more to win or lose than America. I do so because if we believe multilateral progress is first-best, we should act accordingly. The world trading system still holds a lot of untapped potential but would also benefit greatly from an extension and updating of its rule book which has not changed at all in the last twenty years whilst economic reality has evolved a great deal.

Yes, the agenda is getting more outdated with every delay in concluding it.

But do not be fooled that walking away from Doha and restarting the talks from scratch would be a solution to the problems that are blocking its conclusion.

No-one who has suggested that Doha be put out of its misery after ten years of on-and-off talks has come up with a credible alternative. Would the WTO really be able to construct a new, more meaningful negotiating agenda based on failure and acrimony?

Would the fundamental political obstacles disappear overnight?

No and no.

Jeff Schott of the Peterson Institute summarises well in his recent policy brief why pulling the plug on Doha is not an option. What we would probably see is years of drift at the WTO and serious erosion of the legitimacy of the whole rules-based system underpinning open markets, which the US and Europe have constructed over the past 60 years. The WTO is by far the most effective part of global governance so it serves great care.

Some of you will no doubt wonder: What is the price of abandoning Doha?

Let me tell you. The potential costs are high.

Without Doha we would considerably increase the risks of protectionism. The WTO has already warned that protectionism is on the rise, despite the recovery.

One study by the International Food Policy Research Institute here in Washington has estimated that in the absence of a Doha deal WTO members could raise their applied tariffs on goods to such an extent as to inflict losses of up to 353 billion US dollars in terms of world income and 1.9 trillion in terms of world exports. Businessmen in Europe and the US have often downplayed the stakes of Doha, arguing it was in essence about 'water'. Well, the figures I just mentioned are the price-tag of that 'water'! And, anyway, Doha is also about real improvements in market access to and fairer rules in the emerging countries!

I am not arguing for business as usual, especially after yet another breakdown two months ago, despite a European compromise proposal on NAMA sectorals. A new approach in the negotiations is clearly needed to deliver results. I think that the notion of putting together an interim package of deliverables - a down payment, if you will - by the end of this year is the best way to show that results can after all be achieved. This could then pave the way towards concluding the rest of the Round as soon as political conditions will allow for this, and that won't happen this side of the US presidential elections.

Without getting into the details about the contents of a possible December package, let me just say that the WTO needs to deliver on 'development' for its poorest members [the Least Developed Countries], while ensuring an appropriate balance of concessions among the rest of the membership, notably between the US, EU, China, India and Brazil. The focus must be on what can realistically be achieved in the short timeframe till the end of the year. The last thing the WTO needs is another breakdown.

We will all be in deep water if we can't even deliver on the easier parts of the Doha package. It would shed a pale light on the impotence of political leaders to deliver a proactive trade agenda.

So let the US and the EU take the lead, as we have done so often in the past, and pull off that mini-package for December!

***

Ladies and Gentlemen, let me now turn to my second topic.

The EU and the US are the world's top trading partners. The transatlantic economy is often referred to as the most important "commercial artery" in the global economy. We have about 15 million jobs related to the transatlantic economic partnership and mutual investment stocks of about 3 trillion Dollars. But if we want our transatlantic relationship to prosper and grow, then we need to invest in it, politically and economically.

When Mike Froman at the White House and I took over the Transatlantic Economic Council (TEC) early last year, it was our joint objective to make it an effective instrument in bringing our economies closer together. We agreed to look at issues that matter and where we can really make a difference.

After a bit more than a year, the TEC is coming up to speed. The agenda of the TEC is impressive and the issues we cover range from raw materials to nanotechnology.

We have agreed joint approaches in future technologies, such as electronic exchange of health records.

We have agreed principles on how to conduct trade negotiations with third countries on services in the information technology sector.

And we have reached agreement between our administrations on the principles that should govern the ways we prepare and set domestic rules and regulations.

This is only the beginning.

Let me take an area close to your heart: regulatory issues. It is a challenge to comply with very different regulatory rules or systems in other markets. It creates often insurmountable barriers for companies to do business.

The EU and the US, as the two most highly developed economies with sophisticated regulatory systems, are no exception. Many of these barriers are the result of long-standing administrative practices and very often due to the missing reflex to look beyond our own markets. In most cases, we have the same objectives in mind - protect our consumers, investors or the environment. However, we often choose different avenues to deal with the issues at hand. The cost of such differences takes the form of non-tariff barriers.

This is where the TEC comes in.

There are compelling economic reasons to engage in this regulatory cooperation. Studies have shown that we can generate impressive savings - more than 200 billion Dollars - by reducing non-tariff measures and by aligning regulatory divergences. And even if we only tackle a number of specific areas, the gains are huge because of the sheer size of transatlantic trade.

So, the formula of the TEC is to tackle regulatory issues at an early stage, before the actual regulation is in place.

Take electric cars. We both aim to put millions of vehicles on the market in the next 10 years. It is a sector which is crucial for our future. And it will be a test-case for our ability to stay competitive on the world market.

The EU and the US are about to agree an ambitious work plan aiming at aligning regulatory issues, standards and research - so that we avoid moving into different directions and risk creating new market barriers.

This cooperation was made possible, because it was business that made the case for it.

You advocated a closer cooperation.

You suggested specific areas how to move it forward.

It is a good lesson when thinking about the TEC. The TEC is an instrument - not an aim in itself. It is there to be used.

"Upstream regulatory cooperation" will not just work by itself. We need the right political will. Administrations and bureaucracies need to be convinced of the benefits that we have when aligning our approaches. We often need to overcome vested interests, also on the business side.

Hence my plea for vision and resolve: let us work closer together and to make our regulatory systems more compatible. We need all players- administrations, regulators, standard setters, legislators, business and consumers - to get behind this objective. Success will depend on your input, your active participation and your proposals. Otherwise it simply will not work.

***

Ladies and Gentlemen, let me bring this speech to a close

If the US and EU want to strengthen their competitiveness, their ability to innovate and their capacity to shape the world economy, deepening and strengthening our relationship will help a lot. This requires political will and stamina.

Doha has lasted much too long but there are ways to make it move and build afterwards an agenda that addresses the pressing issues that have not been covered enough, such as the links between trade and competition, trade and investment, trade and the environment.

And the TEC is a real test-case of our ability to face together major regulatory questions with a strong international incidence.

America and Europe may often bicker, but in the end we know we are each other's partner of choice. I am ready to partner on the trade front in the months and years before us:

• - 

  with the US government
• - 

  and with you, the Chamber of Commerce, whose influence on the Hill and American public opinion you may perhaps wish to downplay, but which is all too real!

Thank you for your attention.