Speeches & Texts
As prepared for delivery.
The Transatlantic Business Relationship: Greater than the Sum of its Parts
German American Chamber of Commerce
New York, August 3, 2011
Ambassador Philip D. Murphy
Dr. Bunse, Mr. Detjen, I would like to thank you and the members of the German-American Chamber of Commerce for giving me this opportunity to speak with you today.
Es ist mir eine große Freude und Ehre, mich heute hier mit Ihnen treffen zu können. Die Vielzahl der Institutionen, die hier vertreten sind, zeigt, wie lebendig die transatlantischen Beziehungen sind – und insbesondere natürlich die deutsch-amerikanische Partnerschaft.
It is an honor and a pleasure to meet with you here today. The range of institutions represented here today is truly a testament to the vitality of the transatlantic relationship – and more specifically, of course, the German-American partnership.
My wife Tammy and I arrived in Germany almost two years ago; or better said, we returned to Germany. We also brought four children and a dog this time. We lived in Frankfurt for a number of years in the 1990s and we were tremendously impressed then by the vitality of the German-American partnership. Today, over 15 years later, obviously much has changed. The issues that the world faces today are of a complexity that nobody could have imagined in the mid 1990s. Never before have events taking place in one country had such an immediate and pronounced ripple effect whether just over the border or on the other side of the world. Some suggest that the increasingly global parameters of international relations somehow diminish the role of the transatlantic alliance. I disagree. I am convinced that our partnership remains the cornerstone of efforts to promote global peace and prosperity. As President Obama says frequently, no nation can deal with the challenges of the 21st century alone. America needs robust partners. Nowhere are there better or more committed partners than in Europe, and Germany is the centerpiece of an extraordinarily strong European Union.
Our alliance is not history from a bygone era; it represents a commitment that remains fundamental to our shared security. Again, there is no doubt that the relationship has changed.
I am reminded of this each day when I enter our Embassy in Berlin located along the fault-line of where the Berlin Wall once stood, almost next door to the Brandenburg Gate. I’m fortunate to have one of the best views in the capital of the Reichstag. I look out over Berlin and see a city that has witnessed a unique and profound transformation.. That transformation has affected Germany’s foreign relations and international responsibilities, as well as its economic interests and its economic relationships. The consequences of these and other changes in German society have had an enormous impact both in Europe and around the world.
Earlier this summer, President Obama celebrated that positive role that Germany plays in today’s world. In awarding Chancellor Angela Merkel the Presidential Medal of Freedom, he recognized her achievements as a dedicated public servant in the promotion of liberty, peace and prosperity. Her personal story is also an inspiration for people around the globe. As the first East German and the first woman to become chancellor of Germany, she broke barriers. But the award was also a testament to the progress that is possible in our world. As President Obama said, and I quote, “As people around the world imagine a different future, the story of Germany and our alliance in the 20th century shows what’s possible in the 21st. Wars can end. Adversaries can become allies. Walls can come down. At long last, nations can be whole and can be free.”
Chancellor Merkel’s Medal of Freedom was also a testament to the enduring and ongoing importance of the German-American relationship. As members of the most successful alliance in history, our commitment to our common defense is a pillar of global security. Gone are the Cold War concerns that used to dominate our relationship. Now we are looking at the challenges of completing our mission in Afghanistan or preventing terrorist attacks or looking for ways to achieve our vision of a world without nuclear weapons.
The economic relationship between our two countries is enormously vital and dynamic. It reflects some of the new realities of the 21st century. The United States and Germany prove that prosperity is best achieved when nations invest in our ability to compete and innovate . Competition and collaboration can go hand in hand; and indeed that when you put those two elements together, it is a formula for success.
The figures on investment are an important part of that equation. In 1989, U.S. foreign direct investment in Germany was around $23 billion. Since then, it has grown to more than $150 billion. In 2010, U.S. firms invested six times as much in Germany as China and India combined. We may have reduced our military forces in Germany over the past 20 years, but we have dramatically increased our economic presence. Even more impressive is the growth of German foreign direct investment in the United States. That has gone from around $28 billion in 1989 to over $250 billion in the past 20 years. Today over 600,000 Germans work for American companies in Germany, while more than 650,000 Americans work for German companies in the United States. As Bob Kimmitt, who served in Germany in the early years after reunification, says “these workers are the new ‘forces’ in our bilateral ties. They are not the military ‘Streitkräfte’ as in the Cold War, but rather forces for economic growth in our two countries, the transatlantic marketplace, and around the world.”
That’s why we in the US Government have what we call a “jobs agenda.” It is vital that we conduct a vigorous international economic policy, but one that also connects with the concerns and aspirations and the interests of hardworking people in America in good, well-paying jobs. I know from talking with our contacts in the German government that they feel exactly the same way. The centerpiece of a strong international economic policy and national security policy and foreign policy is a strong national economy. As we create more opportunities at home, based on a free market, open, fair rules-based model, we set an example for countries which can also create opportunities for their citizens. We have seen many times over that this is a model that works.
The first element of the State Department’s role in the “jobs agenda” is President Obama’s National Export Initiative, the goal of which is to double American exports over the next five years. This will support an estimated two million additional American jobs. The Commerce Department and the Foreign Agricultural Service are spearheading this initiative but it is a cross-agency priority. Secretary of State Hillary Clinton, devotes a lot of time and energy to serving as an advocate for American companies, both large and small; and she expects me to do the same.
In various ways, we at the Embassy – and we are also a cross-agency team – help them to identify and act on opportunities in countries around the world. These efforts have translated into a collaborative, public-private approach that is less about what government can do and more about helping businesses to do more. I would especially like to commend my Commercial Service and Foreign Agricultural Service colleagues at Embassy Berlin and our Consulates. They do a fantastic job, especially at the highly successful international trade fairs for which Germany is world-renowned. Today I would like to ask all of you to support the work that they do. Make the case for more U.S. firms to participate in German trade fairs. Be an NEI mentor and most important an NEI multiplier.
Another element of the job agenda is promoting investment. And here I would like to commend the German company reps here today. Your companies have obviously recognized the potential of the American market. You have voted with your balance sheets and recognized that the United States is one of the best places in the world to invest, and we thank you for that. You have contributed to a robust manufacturing base, created jobs for American citizens, and introduced new technologies into the U.S. marketplace. The United States has a strong and open economy, the world’s most productive workforce, a unique culture of innovation and entrepreneurship, remarkable colleges and universities, and a business environment marked by transparency, protection of intellectual property, and the rule of law. Let me also add that Germany offers those same advantages to foreign investors. This is one of the reasons why German and American foreign direct investment flourishes.
I think that all of us here today recognize the ‘win-win’ advantages of foreign investment, in terms of jobs and sales of goods and services, as well as innovation. And because foreign investment is so important, President Obama has directed all government departments to encourage and support foreign investment. SelectUSA is another new inter-agency initiative. In the United States, it is the first-ever government-wide effort to facilitate business investment as an engine for jobs growth and sustainable economic development. It is there to help foreign companies that are not only in the early stages of the investment process but throughout the lives of their U.S. operations.
I would like to recognize Mr. Barry Johnson, the Executive Director of the new SelectUSA initiative, and Ms. Tazeem Pasha , the Manager of Business Retention and Expansion. They are here to help, so please do try and connect. Ms. Pasha was recently in Germany for meetings with the Deutscher Industrie- und Handelskammertag, the folks at Germany Trade & Invest and AmCham, so you know she cares about Germany.
But of course, the best advertisements for foreign investment are success stories – and between the two of our countries, we have a lot of stories to share with each other and the world. I would like to hear some of those success stories today. You can talk to Barry and Tazeem about the problems. Most important is that the public and private sectors – both German and American – maintain open lines of communication so that we can indeed build on the strong foundation of our common values and shared interests. I would like to thank our host, the German American Chamber of Commerce, for all that it does in this regard. Your partner organizations in Germany are equally active. But I think we can do more. For example, I would like to see companies send more American executives to work in Germany; and vice versa. I know from my own personal experience that living and working in a foreign country is a life-changing experience. More important though, professional experience gained abroad creates strong links to both the present and the future. The input that business executives with hands-on international experience can provide is unique. So please get involved in every sense of the word and speak out on the economic policy issues that are vital to your industries. We need to maintain the vitality that distinguishes the trade and investment activities that goes on every day across the Atlantic.
In very concrete terms, I am talking about the vision of the some 2,700 U.S. businesses that are invested in the German market and the 3,500 German-owned companies that are active in the United States. Generations of Germans and Americans have worked side-by-side over decades in long-standing successful relationships but newcomers are rapidly catching up. We are seeing investments of all sizes in a number of different areas.
Eighty percent of the German companies that are active in the U.S. are small or medium size enterprises with less than 500 employees. But there are also large scale investments, some employing tens of thousands of workers.
Some current projects of note include Thyssen-Krupp’s $5 billion steel mill in Alabama; the construction of a new Siemens Industry distribution centre in Southaven, Mississippi. You may have seen the recent announcement by Mercedes-Benz last month that it plans to expand the overall capacity of its plant in Tuscaloosa, Alabama. According to Dieter Zetsche, head of Daimler-Benz Cars Division, the Tuscaloosa plant is the blueprint for the company’s facilities outside of Germany. The new Volkswagen plant in Chattanooga, Tennessee is another investment with global impact. It will set new standards in green production processes. These German investments, however, like others – large and small – also have a major impact on America. German companies are helping us to strengthen and re-build manufacturing. Our workers are receiving first-rate training. Supply networks are being expanded across the country and the Atlantic and around the world. This is win-win for everybody.
One of the areas where foreign investment has a major impact is in the area of renewable energy. Germany and the U.S. are world leaders in this field. There are obvious benefits to both countries in terms of R&D cooperation including cross investment, economic growth and overall energy security. Transatlantic research cooperation, however, can also push forward renewable energy sources so that they become comparable to traditional sources in the global energy market.
In fact, I recently heard someone say that the U.S. is the Saudi Arabia of renewable energy. The potential is very real. I see what Germany has done in the solar industry with limited sunlight. Berlin gets less sunshine than Seattle – and I am not only talking about the rainy summer we have been having this year on the other side of the Atlantic. Many companies are already taking advantage of the energy potential in the United States. The Solar Millennium and Solar Trust of America, a joint venture which includes two German companies, Solar Millennium and Ferrostaal, began construction of the Blythe Solar Power Project in California in June. It will be the largest concentrated solar power plant in the world. The Department of Energy awarded a $2.1 billion loan (or 75% of the total cost) to the project. Under the Recovery Act, the U.S. is investing more than $90 billion in clean energy. This one project in California will produce up to 1,000 megawatts of electricity powering over 300,000 homes. The first phase of the project will provide jobs to about 1,000 people.
The field of renewable energy is an area where there is lots of room for public-private cooperation. This, too, is one of our priorities at the U.S. Embassy in Berlin. The Transatlantic Climate Bridge or TCB is a German government initiative to foster cooperation and build industry and government partnerships on climate and energy issues at the local, state and federal levels. The Embassy is a strong supporter of the TCB and we work closely with government representatives and business advocacy groups to advance dialogue on sustainability.
As I said earlier, the pioneer efforts of the U.S. and Germany in renewable energy technology have a multiplier effect. The United States joined the International Renewable Energy Agency (IRENA) – an international organization dedicated to facilitating the rapid development and deployment of renewable energy worldwide – on March 4, 2011. The U.S. looks forward to working closely with the IRENA Innovation Center that is scheduled to open in Bonn this year to jumpstart the development of clean technologies.
Last year, the U.S. and Germany signed the first bilateral Science and Technology Agreement to facilitate and enhance future cooperation between our scientists. In the short term, this will mean better cooperation in renewable energy, as well as the fields of medicine, materials science research and environmental and hazards research. It also provides mechanisms for the U.S. and Germany to coordinate research activities in developing countries. By intensifying relations in joint R&D initiatives and education, both of our two countries can move forward on closely shared national priorities in science policy to the larger benefit of all.
The United States has a long history of robust bilateral support for scientific and technological research. America’s universities, federal labs, and industrial laboratories conduct research that leads to breakthrough products and new companies. There are many success stories to be told here, too, of how cooperation with German counterpart organizations has fostered research and innovation.
Cooperation between research and educational institutions has another important spinoff effect. It creates bonds between people. The raw numbers of the people-to-people connections between Germany and the United States paint a picture of the dynamism and strength of the ties that bind our two countries. Personal connections resulting from business, education, tourism and culture are the glue that binds; they foster a unique kind of cooperation – far beyond what governments can do alone. Although I am honored to serve as the official Ambassador of my country to Germany, I know that business associates, researchers, family, friends, tourists, and students are also excellent mutual ambassadors, along with members of the military and their families based in Germany. Though there are less of them now than 20 years ago, their numbers are still significant and the job they are doing is important.
Cooperation is, after all, rooted in people -- in the business that we do, the studies we share, the knowledge that we gain, and even in the sports that we play. At the Embassy and our five Consulates, we are committed to engaging not only with representatives of the federal, state and local governments, but also with civil society, business leaders, teachers, and students. We did a number of programs with young people around the Women’s World Cup in soccer last month. It was a way to motivate kids to do their very best and it also underlined how sports can connect people. Even though I am sad that TeamUSA did not win the Cup, the heartbeat final between Japan and the United States truly united people.
More broadly, I believe that it is particularly important to engage young people so that they are just as convinced of the value of our partnership as somebody of my generation. I mentioned earlier that I would like to see more executives move back and forth between our two countries. We are also doing all that we can to encourage youth exchange initiatives. I believe it is crucial that the generation that will need to seek and find the solutions to the challenges of the 21st century not only learn, but feel, the importance of that shared history and some of the milestones of the past six and a half decades.
I mentioned earlier the symbolism of the location of our Embassy. When I speak with young people, I often do a ‘show and tell’ session, using photographs of some of the heroes and landmarks of our times. I like to show two photos, both taken from the top of the Reichstag from almost exactly the same angle – one dated pre-Wall and one dated now. The older photo shows the Brandenburg Gate and the Wall that curved around it. The area around the Gate is completely empty, a “no man’s land.” The view into East Berlin is bleak and drab and grey. The more recent photo shows a busy, bright city – live and in color. The Brandenburg Gate, once again, as in years gone by, now forms an ensemble with Pariser Platz, a central square that for almost two hundred years was known as Berlin’s salon or parlor – until history got in the way. Well, Berlin is now open again for guests – and the American Embassy is right there back where it was before World War II, on the Platz, beside the Brandenburg Gate. Our shared history has shown us that sometimes what we thought was impossible can come true – and for me, those two photographs tell that story.
But we have also seen that it is sometimes easier to put up walls, physical and virtual, than to take them down. It is sometimes easier to blame others than to look inward; and tt's often easier to see differences than to find the things we share. I know Andy Warhol was actually born in Pittsburgh and there is a great Warhol museum there, but New York has come to be identified with him;- so I would like to close with a Warhol quotation that I actually first heard from a top official in the Berlin city government. It talks about change – and that is one thing that Berliners know a lot about. I quote: "They always say time changes things, but you actually have to change them yourself". I try to communicate that sense of opportunity and responsibility to young people. It is that sense of enlightened self-interest that to me truly makes the German-American partnership one that is indeed much, much greater than the sum of its parts.
Vielen Dank für Ihre Aufmerksamkeit.