It is a peculiar scene: the CEO of a car glass company in the US Midwest stands in front of his workers and calls out in broken English “Make America great again!”
The man is Chinese, and, following the collapse of the automobile industry, the company he works for is the new employer of many people in Dayton, Ohio. It is also the source of new hope.
The documentary “American Factory” was released just a few days ago and, fittingly, is about a Chinese company. It’s about the clash between two cultures, too.
Because there is a huge gap between Chinese high-performance and American working class, a gap wider even than the Pacific, wider even than trade disputes and sanctions policy.
Workers’ rights fought for over decades are once again up for negotiation. What’s at stake is nothing less than the dignity of those who work there.
Ladies and gentlemen, this already takes us right to the heart of things, to the very engine room of globalisation.
Globalisation and global connectedness have brought prosperity all around the world. Quantifiable prosperity. Real per-capita income has risen by almost 60% just since the start of this millennium. Almost a billion people have managed to escape absolute poverty, more than half of them in China. But we Germans, too, are benefiting from this development.
Nevertheless, after all these years of economic upswing, our country in particular seems oddly unsettled. From the world’s leading exporter, we seem to have become the world’s leading worrier.
Sometimes you get the impression that we lack the courage to try out anything new. And the voices of the critics of globalisation are getting louder, not quieter. It is as if all that growth had ultimately brought nothing but disappointment.
It has to be said, though, that while globalisation cannot be reversed, it can certainly be made better. Because there is indeed a discrepancy in perceptions of who has actually benefited from the upturn, and who hasn’t.
So the priority must be to “shape multilateralism”. That is one of the main aims. And that is what we are already doing, in many areas.
I am thinking here of trade agreements, but also of our efforts in the field of security policy to maintain the arms control architecture, or our efforts to preserve existing climate agreements and conclude new ones. This is something we are doing within the EU framework, in the United Nations Security Council, in the WTO, and in many other forums, too.
So to some extent, shaping multilateralism – the motto of our Ambassadors Conference – is part and parcel of every diplomat’s job description.
However, we sometimes forget, ladies and gentlemen, that the first tender shoots in this process, the first international organisations, which emerged in the mid-19th century, were
- river commissions,
- the International Telegraph Union,
- the Universal Postal Union, and
- the German Customs Union.
It is important to note, that these organisations were established and developed not by governments, but by business.
The goal was always the same one: to gain as many advantages as possible, for all! Otherwise these organisations would not have come into being. Reducing bureaucracy, even then; establishing reliable standards; cutting costs – all things you are concerned with every day.
A further step, by the way, was the foundation 100 years ago of the International Labour Organization, which aimed to fix common standards in workers’ rights in order to improve social justice.
Here, too, we see that multilateralism creates clear, reliable rules; multilateralism cuts costs; multilateralism ultimately benefits all. Even so, this fundamental concept is coming under increasing pressure today, more so than in recent years. In an even greater number of places around the world we are seeing isolationism, attempts to force rules on others, attempts at cherry-picking, at applying only those rules that are convenient at the time.
We all know that there are substantial risks involved in this. Yes, we are already seeing initial signs of a weakening economic activity here in Germany. A ten-year upswing appears to be coming to an end. Germany’s GDP fell slightly in the second quarter, which would even make technical recession likely. Many of you in the German business community have already seen this reflected in your own figures for the quarter.
You know, and we know, that there are many reasons for this development, especially in Germany, an export economy: the new protectionism, the move away from a rules-based international order, the dangers of the threatened no-deal Brexit, the recession in Turkey, new extraterritorial sanctions – but, above all else, the trade war between China and the United States.
To make it quite clear: a fall in growth in China of one percentage point in the next ten years means two trillion euros in losses for the rest of the world.
And there is nothing that superficially jubilant short-term reports can do to disguise that. The devaluation of the yuan two weeks ago prompted quite a few reports. I read this somewhere: “Germany could profit from the yuan shock”.
Ladies and gentlemen,
this, to my mind, is the logic of the protectionists! This is “my country first” at its best. Anyone who thinks this way truly has not understood anything. Quite simply, short-term successes cannot hide the fact that ultimately there can be no winners in a trade war, especially one between the United States and China, but not in any other trade war either.
We are convinced that what is needed for a system that will remain viable for all in the long term is not pure competition, but cooperation among equals.
To establish this equality, however, we need one thing above all else – the EU. As a united European Union, we already have the requisite weight in many areas - by no means in all possible areas, but it is certainly not the case that we do not carry weight anywhere. Where our voice does carry weight, we can defend our interests and values energetically.
But we can increase our clout further. My French colleague Jean-Yves Le Drian and I have together shown what progress we have to make for a strong and sovereign Europe.
Alongside WTO reform and the negotiations with the United States on an industrial tariff agreement, this includes a new European connectivity agenda.
But it also includes strategic decisions designed to maintain our technological sovereignty and innovative capacities. The EU’s new Strategic Agenda and the new Commission’s Political Guidelines aim at exactly that. That’s why they are so important.
At the same time, this means that we need to support SMEs, deepen economic and monetary union and, yes, complete the banking union.
Multilateralism works. This becomes especially clear in the EU’s successful trade policy, which has given the best response to growing protectionism: CETA with Canada, Viet Nam, Singapore and Mexico, and advanced negotiations with Australia, New Zealand and Chile.
With the EU-Japan Economic Partnership Agreement signed recently, we have created the biggest free trade area in the world.
Our free trade agreements do more than just open up new markets for a competitive European economy. We Europeans set the world’s highest standards in consumer protection, occupational health and safety, and environmental protection.
Much in these areas is improving. Of course, some people might say more could have been done. Still, one cannot ignore the fact that further progress is being made in all these fields, step by step – progress for which we have been fighting, in some cases for decades. And we are proving that trade can indeed be both free and fair.
After twenty years of negotiations, we have reached an agreement between the EU and Mercosur, an economic area with 260 million people. Naturally, sustainability, alongside the elimination of customs tariffs, plays a key role.
During my visit to Brazil, I made it very clear that environmental and climate policy is central when it comes to evaluating this agreement. And if you look closely, you will find that it's there in this agreement. It is perhaps especially important at this time to point that out.
Brazil has undertaken to combat deforestation. Such agreements make it possible in the first place to exert influence on a development in a country which will have an impact worldwide.
And the fires bring home to us in a dramatic fashion just how necessary this is.
Yesterday evening, I spoke at length on the phone with my Brazilian counterpart and once again offered Germany’s support, both financial and technical.
We cannot stand idly by and watch devastating fires destroy the world’s green lungs!
Protecting the Amazon is a task for the whole world – it concerns us all. That’s why we were right to address this issue at the G7 Summit. That’s why we were right to offer our support to help tackle the fires.
What’s more, ladies and gentlemen,
Latin America not only has economic ties with us. These countries are also important partners when it comes to defending the international order, multilateralism, democracy and human rights.
It was therefore a good idea to have an exchange of views at a Latin America conference here in the Weltsaal a few months ago with German companies, as well as with all Latin American countries.
Multilateralism works – as the example of agreement with Latin America shows. Working for a rules-based, global order, for cooperation and stronger international organisations in the EU pays dividends.
Incidentally, we also see this with WTO reform. Unfortunately, due to the fundamental opposition, that’s the only way to describe it, of the United States, this is proving to be difficult. If a solution is not found soon, as of December the WTO will not be able to perform one of its core functions, namely arbitration. That cannot be in anyone’s interest.
The European Union has developed interim solutions in order to maintain the WTO’s ability to function until judges are again sitting on the Appellate Body. It cannot be that difficult.
Multilateralism works – protectionism, on the other hand, harms everyone. Most of all, however, it harms the poor. Perhaps that should be highlighted more in the public debate.
If we were to halt all international trade tomorrow, the wealthiest households would lose 25 % of their purchasing power. The poorest, however, would lose 60 %.
Ladies and gentlemen,
Dayton, Ohio lies at the heart of the Rust Belt. Almost 35 % of people in what was once the largest industrial region in the United States now live in poverty. For the workers at the Chinese factory, the words “Make America great again!” sounded like a promise of a better future after many years of unemployment and no prospects. And at the time when the CEO called out this slogan, the establishment of a trade union had just failed due to resistance from management, Chinese Management.
The factory workers had jobs again, but they had lost the fight to organise themselves in a union to defend their rights.
Yesterday, I was here with the President of the Federal Constitutional Court, Andreas Voßkuhle. This year, we’re celebrating the 70th anniversary of the Basic Law. This, our constitution, lays the foundation for the social market economy. And we’re committed to upholding it.
However, the social market economy will only be fit for the future if the benefit to the common good is evident in business thinking and actions. People have to see that not only profit matters but also social cohesion. And this cohesion depends on many factors.
For the equation “If the economy is doing well then people are doing well, too” doesn’t work so well any more.
We have to demonstrate that the social market economy isn’t a discontinued model. Indeed, it has to be a top export.
And we have to encourage people to accept committed action both on the part of policymakers and business, also across the globe, internationally.
For we have a currency and if we devalue it then we will lose everything. This currency is trust.
It should therefore be a given that high environmental and social standards are part and parcel of the quality seal for products and services from Germany!
Many companies are leading the way and showing how it is done.
Some of you have received the survey on the National Action Plan for Business and Human Rights – an agenda which, I believe, will be very important, also in the public perception.
I notice time and again how much business and innovation “Made in Germany” shape our image abroad. They are a cornerstone of our influence. Business is the foundation of our prosperity. You contribute to the common good and you are engaged far beyond your economic interests. I would like to thank you most sincerely for that!
Ladies and gentlemen,
Essentially, what multilateralism means is what we do on a daily basis in our foreign policy: opening our minds to different ways of seeing the world. Engaging with new, also non-governmental, partners and networks. We need companies, associations and all levels of our society in order to defend our interests and values together.
Stefan Zweig once said: “If many little people in many little places do many little deeds, they can change the face of the Earth.”
Without wanting to belittle anyone, the message is clear: we’re all in the same boat. Especially at the present time, this is illustrated more clearly than anything else by climate change. We will all have to act. We need to move from a multilateralism among states to a multilateralism among societies.
We will all lose out in the end if we fail to take concerted and global action on the difficult tasks and challenges of the coming years and decades.
That’s one of the reasons why we’re so committed to the alliance for multilateralism. It’s an alliance which concerns us all. It’s not a theoretical, political project. It's a project
- for workers and consumers, who benefit from free and fair trade,
- a project for human rights activists, who are guided by the same values and ideas as we are,
- for young people, who are urging us all to do everything we possibly can to tackle climate change.
And for the economy and free trade. We are the free world and we therefore also stand for free trade.
Ladies and gentlemen,
We need all of you in this alliance, we need your support. I can only warmly invite you, and also urge you, to be part of it. This is about more than politics.
Thank you for joining us today. Now, we are looking forward to hearing your thoughts on shaping multilateralism. The floor is yours!