Toespraak eurocommissaris De Gucht over Duitsland, de eurocrisis, handelsbarrières en investeringen (en)

Meine Damen und Herren,

Ich freue mich sehr, heute zu Ihnen sprechen zu dürfen. Denn mit München verbinde ich schöne persönliche Erinnerungen (mein erster Sohn ist hier geboren) und gute berufliche Erfahrungen.

Where better to talk about the future of world trade and investment than here in Bavaria? Known as "the land of lederhosen and laptops", Bavaria plays host to many successful and globally-active companies: From Siemens to BMW, from MAN trucks to Audi - not to mention the SMEs in machinery, medical equipment, aircraft components and renewable technologies.

Bavarians know as well as anyone that the success of the acclaimed German economic model is trade-driven - and that currently exports are compensating for a weaker domestic demand.

I. The competitiveness of Germany and Europe

• 1. 

  With more than 9% of German employment directly or indirectly linked to exports to outside the EU, there is no doubt that trade is important for this society. At least 3.5 million Germans owe their livelihoods to commercial links with the rest of the world - with even more if we were to account for indirect exports via other Member States.

Germany has long been Europe's export powerhouse and a motor for manufacturing. This has obviously benefited Germany, but not only. With the biggest EU trade surplus with the rest of the world, highly competitive German firms are often the entry point into new markets for many firms all around Europe that supply much needed inputs to Germany's industry.

The employment effect of such intra-EU trade links must not be overlooked. Shipments from Europe to the rest of the world created 19 million jobs. 15 million of those go the Member State where the exports left the EU. But the remaining 4 million are found in the other Member States.

However, as you all know, Germany's - and Europe's - exports only succeed if global markets are open and healthy. What is the global picture at present?

I'm afraid it is not very rosy right now. The latest figures indicate that world trade volumes stagnated in the second quarter of 2011. According to the OECD, the slowdown is only partly due to disruptions in supply chains after the March disaster in Japan. Across the world, export orders and costs of container shipments have declined - both signs of weakening demand.

To some degree, this reflects the disappointing prospects for global growth and especially across the industrialised world. When economic activity is hardly expanding anymore, trade volumes tend to follow the business cycle.

• 2. 

  Opinion and policy makers in Europe are wondering if we are at risk of a double dip recession. Economic growth in the EU is certainly slowing down. After growing strongly in the first quarter of 2011, GDP expanded less in the second quarter. Growth is now expected to remain subdued in the second half of the year, coming close to standstill at year-end. The soft patch predicted in the spring forecast is now likely to deepen but will not result in a double dip. However, growth forecasts for the second half of the year have been revised down considerably, the current outlook is uncertain, and the balance of risks to this forecast is on the downside.

More than anything, our response to the turmoil in the euro area and on the global markets should be our overriding priority. This is a fight for the economic and political future of Europe. This is a fight for European integration itself, as President Barroso emphasized in the European Parliament last week.

It is a fight that will need a lot of political courage and effort. Despite all the high-minded economic theories and political proposals, the recipe is really 'as simple as it is hard to implement in practice: countries faced with high levels of debt and deficits need to cut expenditures, increase revenues and remove the structural hindrances in their economies, however politically painful.' I do agree with the German Federal Minister for Finance, Schäuble, on this point.

There is no substitute for delivering on austerity programmes in order to calm financial markets. At the same time, I would like to pass two other messages as well.

First, the turmoil and the uncertainty, which is so damaging to economic growth, is also in part the result of confusion and contradiction in policy circles of 'strong' eurozone countries. Strong statements often arise from frustration about the 'mess' we are in and the fact that we were unable to prevent it. But anger is seldom a wise policy counsellor. If one eurozone country is left to default, there is a major risk of contagion that will put other eurozone countries and many of our banks in very deep trouble. Laßt uns keine Eigentore schießen!

Second, while weak eurozone countries have to cut and cut their budget deficits, we must also pay attention that a public finance crisis in Europe does not turn into a growth crisis, like Japan in the last fifteen years. Without higher growth, we will not be able to sustain our welfare state and stabilize our debt to GDP rates. Higher growth is what the EU 2020 programme is all about and the latter must be pursued with renewed vigour.

• 3. 

  In the particular case of Greece, the troika consisting of representatives from the IMF, the ECB and the Commission is constantly watching over the shoulder of the government. Privatisation, reform of the public sector and new taxes (such as the new one on real estate) will hopefully lead to more revenue for the Hellenic budget. Moreover, the Commission's special task force on Greece under the direction of the German top official Horst Reichenbach will deliver advice to modernise the Greek administration and to improve its capacity to absorb EU funds. Currently, up to 7.7 billion € from regular EU funds are parked in "sleeping projects" because the Greek administration was not able to co-finance them. The Commission is doing its utmost to remedy this situation.
• 4. 

  With all the remaining worries over Greece we must, however, not underestimate this: Europe's leaders have shown quite some courage over the last few months, they have made commitments and are making efforts to put in order their public finances and to implement the economic reforms that are a pre-condition for restoring markets' trust and economic growth. Now they have to deliver upon their promises. Our sense of urgency must not wane.

At European level, the implementation of the package agreed on 21 July by all Euro area Heads of State and Government, the President of the European Commission and the President of the European Central Bank, in the presence of the IMF, is the next step to take. It is an important package which includes measures to increase the flexibility and effectiveness of the European Financial Stability Facility that will help to calm financial unrest.

And importantly, we should finalise the so-called '6-pack' legislation on reinforced economic governance, which is a major step towards stronger, more trustworthy European-level governance of Euro area economies. This should be voted through by the European Parliament later this month.

• 5. 

  As I already mentioned, we should not forget to look beyond austerity. Trade will play a crucial role in restructuring our economy and is expanding the demand for what we produce.

Currently, growth is stronger in emerging economies than at home. By 2015, 90% of world growth will be generated outside the EU, one third of it in China alone. So far we have been able to benefit from this dynamism. The figures for German exports clearly illustrate this. In the past two years, we have seen exports of German goods to the BRIC countries (Brazil, Russia, India & China) growing substantially. These exports were worth nearly a billion Euros in 2010 and their share in Germany's non-EU exports has gone up by 3 percentage points to over 25%.

Emerging markets are fast moving up the ranking of the EU's largest trading partners. In terms of total trade, China is set to become the EU's largest partner sometime in the next few years. Russia, India, Turkey and Brazil are also in the Top Ten already today. This fast expansion of trade hides, however, the fact that barriers to trade and investment in these countries are still considerable.

Which is where the EU's trade and investment policy comes into play.

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II. The EU's Trade policy

To ensure the further growth of international trade we have to work hard for an active trade policy. We need to achieve a greater mutual level of openness with our key trading partners around the world.

• 1. 

  The best forum for this is of course the WTO and the Doha Development Round. As the biggest trader in the world, the EU has a strong interest multilateral trade liberalisation and in updating the rulebook. Therefore, we have played a constructive role in the negotiations to date. Unfortunately, it has not been possible to make tangible progress and this is deeply disappointing. We will help the WTO Director General in charting the next steps to overcome the stalemate. But prospects for reaching concrete negotiating results in the short term look rather bleak. The Ministerial Conference in December will show where the minimum consensus among WTO members lies.
• 2. 

  At the same time of course, we continue to negotiate and to deliver Free Trade Agreements with a number of important emerging market partners.

• a) 

  The first trade deal completed on my watch has been with South Korea. This is the most ambitious trade deal concluded by the EU - and our first with an Asian state. It has an unprecedented level of tariff dismantling and some groundbreaking provisions on non-tariff barriers.

As of 1 July this year, EU exporters will over time no longer pay €1.6 billion per year in duties. Many of these cuts are very relevant to German exporters. Across the EU, machinery exporters will no longer have to pay €50 million duties a year and chemical exporters will save €150 million in eliminated duties. This static view will of course be topped up by dynamic gains resulting from a relatively more competitive situation of EU industry in Korea compared to some of our other major developed competitors.

However, a closer trade relationship today must not be limited to tariff reductions, but must include also services trade barriers and non-tariff barriers. Companies today operate global production chains across many borders. They depend not only on low tariffs, but also on supporting services, such as telecoms, financial services, distribution and logistics, on efficient and effective regulation, and preserving intellectual property.

Our trade policy looks at all the parameters that make these global value chains work better.

For example, EU exporters of consumer electronics and household appliances are often obliged to duplicate cumbersome and expensive testing and certification procedures. With our trade agreement, South Korea will now generally recognise European certificates and test results so that no duplicative tests or certification will be required.

• b) 

  We have plenty of other negotiations on the boil as well. From Mercosur (in Southern America) to Canada to India, from Ukraine to Singapore, we have real prospects to create opportunities to sell goods and services across the world and to become more efficient at doing so. We have good hopes of concluding some of these negotiations before the year-end.

• c) 

  Even outside the scope of trade agreements, we are working to improve the trading environment for many sectors via our strategy for better market access and more regulatory convergence.

The EU and the US, as the two most highly developed economies with sophisticated regulatory systems, are no exception. There is a lot of advantage in tackling regulatory issues at an early stage, before the actual regulation is in place. This is what I want to achieve with the Transatlantic Economic Dialogue.

Take electric cars. Both the EU and US aim to put millions of vehicles on the market in the next 10 years. We are following 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.

In this way, European policy does not sit at the sidelines but is leading from the front, making the trading environment more favourable to success. And making sure that trade policy helps to contribute to European growth.

• 4. 

  Of course open trade can only work when its rules and disciplines are rigorously enforced.

A good example is the verdict by the WTO which, last July, ruled against China's use of export restrictions of certain raw materials, backing a case jointly brought by the US, Mexico and the European Union. These materials are crucial inputs for the German manufacturing sector - whether producers of electronics, automotives, refrigerators or medical equipment.

The WTO found China's restricted export regime in breach of its international commitments and unjustified, regardless of the environmental concerns cited, because these are not and cannot be addressed simply by discriminating against foreign competitors. As a result, we also expect China to revisit its overall export restriction regime, and we will be closely watching the situation for the remaining restrictions on other raw materials.

Taking a major economic partner to court in this way is not an easy task, but it is a necessary one. We should cooperate as much as possible to stick to the rules of international trade.

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III. The EU's investment policy

Ladies and Gentlemen:

• 1. 

  Since the Lisbon Treaty conferred exclusive competence in the area of foreign direct investment (FDI) to the EU, we are now developing a comprehensive investment policy. We wish to enhance European investment abroad and to encourage foreign investment into the EU.

But we are not "beginners" in this domain. The EU has already taken the leading role in negotiating market access for European investors in third countries within its Free Trade Agreements. The new exclusive competence on FDI will complement this experience: we can now enlarge the scope of these negotiations to investment protection at post- market access stage.

This is an important development as investors are interested not only in market access opportunities but also look for a stable, sound and predictable environment once established abroad. In essence, EU trade policy will now fully integrate investment liberalisation and investment protection.

• 2. 

  Of course, we do not want to reinvent the wheel or ignore the progress made to date. Member States have a 50-year experience in investment treaty making. The Commission will draw on this heritage and base the principles and parameters of the EU investment negotiations on the 'golden standards' of Member States. We will ensure that no EU investor is worse off in the future than it would be under Member States' investment agreements.

As in all areas of the European policy-making, the driving force is to deliver better results at the EU level than those Member States could obtain individually. Moreover, the new investment policy will ensure that all European investors abroad enjoy a level playing field, irrespective of their Member State of origin.

We are developing our new comprehensive investment policy step by step. The EU Council of Ministers has just authorised the Commission to add investment to ongoing negotiations with Canada, India and Singapore. And I would like to thank the German government for its constructive role during these sometimes difficult discussions. With these broadened negotiation directives for ongoing Free Trade Agreement negotiations we can start exercising the EU new competence and delivering first results. We are also exploring negotiating opportunities with other important investment partners, such as China.

Our guiding principle for selecting partners is quite simple: we will go where EU investors want to go.

Last but not least, what is the fate of the current 1200 investment agreements concluded by Member States, including the ones concluded by Germany with third states? I am aware of the long-standing tradition by Germany in this field and worries that the current German Bilateral Investment Treaties will fall away, leaving German investors without the hitherto enjoyed protection. However, the Commission has proposed a regulation to formally ensure the continued validity of these agreements under European law provided that they do not present an obstacle to the development of the European investment policy itself. In other words: when the EU will conclude an EU-wide investment agreement with Singapore, there would be no need to keep a bilateral German-Singaporean one. On the other hand, where there is no EU agreement with a third state in place, the bilateral German one could continue to operate. I am confident that the ongoing negotiations between the Council and the Parliament on this important matter will bring a compromise soon that will continue protection and ensure legal certainty for EU investors.

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IV. Conclusion

Ladies and Gentlemen:

German companies have stakes throughout the value chain - from securing access to raw materials, to manufacturing, to protecting intellectual property and opening up new markets. European trade and investment policy is evolving to keep pace with the growing segmentation of the supply process and the issues it raises.

Continuing Germany's export success rests very much on the openness and health of global markets. Our job is to keep those markets open and to pursue further openings.

There is still firm support within Europe for further trade and investment liberalisation, an attitude that public opinion on the other side of the Atlantic does not share much.

Given this support and the imperative to boost growth, it is vital to pursue our free trade agenda which will enable us to bolster our economic efficiency and to exploit the growth elsewhere in the world.

Ich bedanke mich für Ihre Aufmerksamkeit!