Heads of Germany’s missions abroad,
Ladies and gentlemen,
I imagine you have never been greeted this way before. But here in this room, we are all united by one thing – the focus on exchange, collaboration, division of labour and international cooperation in our work.
We believe that more can be achieved by openness rather than isolation, be this in politics or business.
That is how we differ from those who focus on a purely national frame of reference, something that we are experiencing far too often in the world at the moment, unfortunately.
- China’s state capitalism is increasingly preventing fair competition.
- In the trade war between the US and China, Europe is in danger of becoming the collateral damage.
- With his policy of “America First”, Donald Trump is putting the focus on tariffs, protectionism and economic sanctions.
- And as if all that weren’t enough, Brexit lies ahead of us next March.
Wherever we look, the rules-based world economic order is increasingly being called into question. As one of the world’s most open and interconnected economies, this hits us particularly hard here in Germany.
The rules-based order is the backbone of our strength, particularly as regards foreign trade, of course.
As a global economic power, however, a united Europe also has the potential to counter this development.
We want to discuss how to do so here today. And what better venue than the Business Forum at the Ambassadors Conference?
This is where representatives of large concerns, but also of small and medium-sized enterprises, meet the heads of Germany’s missions abroad.
This is where you can discuss business and investment locations and projects all over the world, without having to fly thousands of miles.
And that is why I am absolutely delighted that so many people have joined us once again this year. Thank you very much indeed for being here!
Naturally, I am particularly pleased that Simon Coveney, Tánaiste and Minister for Foreign Affairs and Trade of Ireland, is here with us as our guest of honour this morning.
I firmly believe that Germany and Ireland both stand for an open and business-friendly Europe and of course for a rules-based trade order. Simon, thank you for being here today and welcome again to the Federal Foreign Office!
Ladies and gentlemen,
In the meantime, the attacks on free trade are coming from an unusual direction. The US, for decades the strongest proponent of free trade, is increasingly turning away from the multilateral system. US punitive tariffs on steel and aluminium imports, imposed on the spurious grounds of “protecting national security”, are one example. We believe this is nothing but protectionism!
Tariffs and quotas should be negotiated. However, they should not be an instrument to punish other countries. But that is what is happening at the moment and we need to respond to it.
If we Europeans speak with one voice, then our word carries weight - more weight than if we try to voice our opinion as a nation. Jean-Claude Juncker proved this in the dispute on tariffs when he met President Trump in Washington.
Their joint statement is based on the EU’s fundamental values and interests, namely eliminating trade barriers and strengthening the rules-based order. In this way, it proved possible to avert a trade conflict, or one should say a further trade conflict, at least for now. However, the problem has not yet been resolved.
Instead – and I welcome this – we are now negotiating on an agreement that conforms to WTO rules and aims to eliminate current tariffs across the board and to remove non-tariff trade barriers. Naturally, European environmental and social standards must not fall by the wayside here.
We also expect the US – and we have made this abundantly clear, both behind the scenes and in public – to permanently lift the punitive tariffs and in particular to take back the threats against the European car industry. And with regard to the reason given to us for this measure, I can only say that German cars certainly do not pose a threat to US national security – on the contrary, they make US roads safer.
At the same time, ladies and gentlemen, when it comes to the US, we must be careful not to focus all our attention on these current discussions. America is far more than merely the tweets from the White House. In holding the Deutschlandjahr USA 2018/19, our aim is to enable people to see and experience both the entire spectrum and the depth of our bilateral relations – and to be able to do so not only in New York, Washington or LA, but throughout the US. We plan to hold over 1000 events. I am pleased that many of you are involved in the Deutschlandjahr USA.
In particular, I would like to thank the Federation of German Industries for its support and to encourage those of you who are not yet taking part to join us. I certainly cannot imagine, as has been written in some newspapers, that German companies are perhaps reluctant to draw attention to themselves in the US at the moment. On the contrary, “Made in Germany” has always been and will always be a seal of quality. And that is something we should also make use of in our political discussions.
Ladies and gentlemen,
China’s understanding of free trade and fair competition is also posing several new challenges to us today. I realise that China remains an enormously lucrative market for many of you because of the high profit margins, but also because of its strategic importance. However, ladies and gentlemen, Beijing is increasingly becoming a competitor as a result of its technological advances. That is why the EU’s demand for a level playing field, that is, for fair opportunities for all market players, is absolutely right.
And by the way, we are very much on the same page as Washington in this regard:
- forced technology transfer
- unclear, massive state subsidies
- the transfer of excess capacities abroad
- and an increasing amount of political intervention in private-sector decisions
have now all reached a critical mass. That is why we will continue working closely with the US in this area in order to be able to exert influence on China.
The trade conflict between the US and China does not only worry us – it also affects us. The threatened punitive tariffs and countermeasures now involve over half of the trade volume between the two largest economies in the world.
Further escalation will inevitably have a negative impact on the German and European economies. Here, too, negotiations are the only option. Imposing more and more punitive tariffs is just as unhelpful as cosmetic concessions from Beijing. Now in particular, progress on the EU-China investment agreement would not only be a sign of goodwill, but would also help as regards greater openness.
We should pay close attention to China’s Belt and Road Initiative, the new Silk Road project that now encompasses the whole world. New land and maritime routes between China and Europe also create great opportunities for the German economy.
However, this initiative also poses risks. Its success will depend on whether China is willing to turn a project tailored purely to itself into a forum that
- provides the countries between both poles with opportunities to generate value-added
- adheres to environmental and social standards
- and does not divide the EU through concepts such as 16+1
For this reason, the EU will present its own ideas in the autumn on how Europe and Asia can be more closely connected – a European connectivity strategy.
I would be pleased if the German business sector were closely involved in this from the start, as there are great opportunities here.
Ladies and gentlemen,
Trade conflicts are not our only foreign-trade concern, however. We are also concerned about the unfortunate ever-greater use of sanctions, including against third countries.
The decision by the US to withdraw from the nuclear agreement with Iran and to reimpose sanctions has led many companies to stop doing business with Iran.
We want to provide as much help as possible to the companies that wish to remain active in Iran. That support includes providing export credit guarantees as before. However, the main priority is to keep the payment channels open. That is why we are currently urging the US once again not to cut Iran off from SWIFT.
At the same time, we are working to set up payment channels that are independent of the US and to create a European currency fund. I know this is not easy. It is certainly not something we can achieve overnight. But we need to work on it, and those who heard the French President’s speech at the Ambassadors Conference in Paris yesterday will know that we are not alone here.
In relations with Russia, ladies and gentlemen, extraterritorial US sanctions are also threatening trade with the EU. It is simply unacceptable that the US is trying to influence European energy policy through the use of sanctions. Germany and Europe need low energy prices in order to remain internationally competitive. If the US wants to sell more liquefied natural gas in Europe, that would be a welcome contribution to our energy supply and would make our supply more diverse.
But purchasing decisions must be based on price and not forced by the use of sanctions.
And that is why we are not taking part in a discussion on blocking Nord Stream 2. Instead, we support the European Commission, which is currently endeavouring to reach an agreement with Russia and Ukraine on the long-term continuation of natural-gas transit through Ukraine.
Ladies and gentlemen, the US also recently imposed sanctions and new tariffs on Turkey. Many of you have shared your concerns on Turkey’s economic development with me. I will address this openly when I hold talks with the Turkish Government in Ankara and Istanbul next week, as we Europeans are naturally very interested in there being stable economic development in Turkey.
Ladies and gentlemen,
These are just some of the issues and challenges currently keeping us busy. We are also facing further realities in the European Union that I am sure you will talk about shortly, Simon.
The UK has decided to leave the EU single market and customs union. That will inevitably lead to trade frictions – and ultimately to a lose-lose situation for both sides. However, the single market, in which people, goods, services and capital can move freely, is one of the EU’s greatest achievements. We cannot allow this economic foundation of the EU to be undermined in any way, including by Brexit. That will remain our goal in talks on these issues.
The greatest challenge Brexit poses is that of preserving peace and stability in Northern Ireland. There cannot be a hard border in Ireland. If we find a binding solution to this in the withdrawal agreement, then we will certainly also be able to reach consensus on other as yet unresolved issues. This is crucial for the people in Ireland and Northern Ireland, but also for us in Europe as a whole.
At the same time, ladies and gentlemen, we should prepare for all possible scenarios. The German Government is doing so.
But unfortunately, a hard Brexit is still on the cards. That is why I would like to ask you to make use of the expertise of the Federation of German Industries and the Association of German Chambers of Commerce and Industry, which provide helpful guidelines and advice services. We are also involved, and I think that will help as regards assessing the developments and current situation realistically and preparing for the future.
Our aim for the post-Brexit period is that the partnership between the UK and the EU be as close as possible. Both sides want an ambitious free-trade agreement with close cooperation on customs and regulatory affairs. Both sides want to work very closely together on internal and external security. I think that we can and will work well together on this basis, and we are already holding pre-emptive talks on these issues.
Ladies and gentlemen,
In all of the challenges we are currently facing, one thing is clear – the problems of today cannot be solved with the methods of the past. We can only succeed in defending the multilateral order by adapting it to the new realities that we are all experiencing at the moment.
That is why we are also working with the US and Japan on modernising the WTO, for example as regards the role of state-owned enterprises or issues concerning digital technology and the platform economy. The EU has presented reform proposals on this in Geneva. The joint statement by Trump and Juncker has lent momentum here, too, as it included a promise by the US to strengthen the WTO.
And at the last EU-China summit, we also agreed to set up a working group on WTO modernisation. In view of all this, what we actually expect is that the US will strengthen the WTO’s Appellate Body by appointing staff and not, as one might think at the moment, weaken it.
One thing is clear – we will not be able to develop an enhanced rules-based order without the US. Equally, we will not succeed without China, let alone against it.
But that is not all we need to do. Our aim is not merely to strengthen the trade order. We also want it to have a human dimension.
When we endeavour to promote free trade and eliminate tariffs, our aim is to ensure that the economy flourishes. Furthermore, we believe that people benefit above all. Henry Ford once said that “a business that makes nothing but money is a poor business”.
The rules-based order will thus always strive to bring about concrete improvements for humankind because when people feel they have been left behind by globalisation, this is a problem for us all in our democratic societies.
The EU is currently negotiating a number of economic partnership agreements. Not only will we make the opening of markets and the elimination of tariffs a part of them, we will also ensure they contain high standards as regards protecting consumers, employees and the environment. Promoting economic development and upholding our values are not mutually contradictory. They are interdependent because political support and international credibility only come about if there is a balance between them.
The EU recently signed the world’s largest free-trade agreement with Japan. That is exactly the right approach. In this way, we Europeans can make our high standards the benchmark worldwide. And that is why I can only encourage everyone to make use of the opportunities that arise from this agreement.
The agreement with Canada and the negotiations with Australia, New Zealand, the ASEAN countries and MERCOSUR also prove that the EU is in demand worldwide as a trading partner and that it shapes the global trade system in line with values that also reflect people’s interests and keep people in mind.
As we had challenging public debates in recent years in Germany on TTIP and CETA, with many heated discussions and demonstrations, I would like to state clearly at this point that I believe the changes taking place around us at the moment mean we are in a phase where it would be worthwhile standing up very overtly and courageously once again for free-trade agreements, as I am convinced that public opinion on this subject has changed. These days, it is no longer a question of whether a free-trade agreement is good or bad or of whom it helps or harms, but rather something of a far more fundamental nature. On the one hand, we have the free world, which wants free trade. And on the other hand, there are now plenty of people who see the world differently and are trying to assert their position in trade through protectionism. That is why I think we should all throw ourselves passionately into a public debate. Those who support a free world also favour free trade and sign free-trade agreements. And the others try their luck with protectionist measures. But that is not our way of doing things. That has changed and we should make use of this opportunity in our political debate.
If Europe throws its weight into the balance, this will create an opportunity not only to give globalisation a human face, but also to generate the necessary acceptance in society. And at the same time, we would send a clear message against isolation and in favour of a rules-based world order. That is important and we will work hard on it.
My Canadian counterpart, Chrystia Freeland, was our guest here yesterday. We discussed the idea of an alliance for multilateralism with her. However, this is not about preserving the past.
We are not seeking an alliance of those who look only to the old days and refuse to move with the times. Our aim is to renew, adapt and strengthen the rules-based order. “Fortress Europe” and “America First” are slogans of the past, not of today. And that is why we must promote reliable rules-based cooperation that builds trust, particularly in international economic policy.
We also need you for this. To a great extent, our country’s voice and influence in the world are shaped by the German economy. Your companies make a vital contribution to sustainable development in the countries where you are active and thus help to foster fair and humane globalisation.
A recent study by GIZ said that Germany does not only export products – it also exports social progress. I think that hits the nail on the head.
Everywhere I go, I experience great recognition for the German economy’s performance. And conversely, I often hear from you how much you value the support provided by the Federal Foreign Office and the German missions abroad.
This appreciation is important to us. Naturally, it also serves as a benchmark for what we are doing abroad. Furthermore, it motivates us to see the promotion of foreign trade and investment as a key task of the foreign service in the future. The Federal Foreign Office and its missions abroad are available all over the world. I myself experience this time and again on my trips abroad. In all the bilateral talks with my counterparts, we also raise and discuss problems that individual companies have in the country in question. We try to make use of the options open to us. And that is what we want to do today by speaking with you.
We have a great interest in your companies thriving and in your being able to do your job.
That’s why we do our job.
And so, ladies and gentlemen, and allow me to say once again, fellow multilateralists, let us continue this good cooperation. The world needs people who firmly believe in multilateralism. We need a rules-based order. We need reliability and trust in international politics more than ever.
Thank you very much!
Thank you once again for joining us today. Now we are looking forward to hearing your thoughts on the global challenges we are facing. The floor is yours!