Ref. Ares(2020)4222852 - 12/08/2020
Ref. Ares(2020)4638020 - 07/09/2020
Commissioner Phil Hogan
Intro Remarks at Amcham “Virtual Town Hall”
29th April 2020
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Intro
Good afternoon ladies and gentlemen, I hope you are all coping
with your lockdown, wherever you may be.
Let me start by thanking Susan and her colleagues at Amcham for
taking this initiative. I was an elected politician for over 30 years
so I have spoken at many Town Hall meetings, but this virtual
Town Hall is certainly a new experience for me.
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It is very timely to have this event, because of course there is a
hugely important transatlantic dimension to the Covid-19 crisis,
both in terms of dealing with the immediate pandemic and in
relation to our post-pandemic economic recovery.
As you know, I am in regular contact with Washington to make a
strong case for greater transatlantic cooperation, and I am
convinced that the Coronavirus situation has only amplified the
need for this cooperation.
Role of Amcham
We are very grateful for the role played by Amcham EU in this
regard. Your events, publications and general outreach help to
keep the wheels of transatlantic cooperation turning.
You annual Transatlantic Economy Study was published in March,
and as always it makes for very useful reading on both sides of the
pond. We value enormously the state-by-state breakdown of
trade with the EU, and this year’s edition has an outstanding
section on the digital economy.
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The study provides comprehensive data to highlight a fact we
already know well, namely that the EU-US trade and investment
relationship remains the central artery of the world economy.
Transatlantic trade in goods and services is worth over 3 billion
dollars per day. American services alone amounted to $256 billion
in exports to the EU in 2018, with a surplus of $60 billion, all of it
strongly supporting jobs in the US.
Mutual investment remains strong: in the last decade alone, the
EU attracted over 58% of total US foreign investment. US
companies freely choose to invest more in the EU than in all other
markets combined.
This is a highly profitable enterprise for American companies, who
have an investment stock of $3.6 trillion in Europe.
Transatlantic supply chains allow companies in the EU and US to
operate more efficiently, and secure millions of jobs on both sides
of the Atlantic: 16 million at last count.
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Collaboration between the world’s two largest market economies
is therefore clearly essential for the stability of trade flows and
the multilateral trading system itself. This was true before Covid-
19, and it is even truer today.
So it is in the mutual interest of business, workers and the
economies on both sides of the Atlantic to stand together and
stand for greater cooperation.
Covid-19 Health & Economic Impact
We are facing a global crisis – potentially the biggest of our
generation. The COVID-19 pandemic presents a profound public
health and economic challenge.
On the public health front, exceptional state support is legitimate
and necessary in responding to the immediate crisis.
We need to ensure the production of critical goods, we need to
maintain employment and we need to keep businesses of all sizes
afloat.
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But over time the state support measures must be rolled back - if
not, they risk perpetuating imbalances that existed before the
crisis.
Within Europe, we are looking at different options to increase the
availability of essential medical supplies. The objective is to
prevent a critical situation for public health through a diversified
and secured supply.
Bearing this in mind, I would like to say a brief word on the EU’s
export licensing requirement on personal protective equipment.
We adopted this measure to protect the health of our citizens at a
time when Europe was at the epicentre of the pandemic.
Our goal is very simple: we want to keep people alive, and help to
“flatten the curve” in Europe.
Our measure is targeted, proportionate, transparent and – above
all – temporary. However, we can see that it has caused some
misconceptions in third-countries. We have increased our
transparency efforts on this, to make it abundantly clear that this
is not an export ban.
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It is a measure that helps monitor the production and movement
of essential medical supplies within the EU and our
neighbourhood, and to establish the gaps in demand and supply
within the EU.
In relation to the global economic picture, preliminary estimates
from the International Monetary Fund show that a global
recession for 2020 is already here, with a significant contraction of
global trade.
It is important to say that while some have compared this
situation to the financial crisis of 2008, the underlying causes are
completely different. This is a public health crisis, unrelated to the
fundamentals of the global economy, which thankfully remain in
relatively good health.
This crisis affects all countries and all people rather than a select
group of countries in particular regions.
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Keeping Global Trade Open
The Covid-19 virus has proven beyond any doubt that we rely on
the global arteries of trade to deliver vital goods like medicine and
food to where they are needed.
No country has been able to secure supply on its own: for
example, the production and distribution of ventilators and Covid
testing kits relies on highly integrated supply chains. A standard
ventilator can contain as many as 900 pieces sourced from all over
the world!
Furthermore, the vast majority of countries depend on imports of
these products. Solidarity between trading partners is therefore
the optimal route to exit - and ultimately recover from – this
severe shock to our personal and economic health.
Yet in spite of this interdependence, the instinctive reaction in
some quarters has been to ask: “after Corona, how can we find
ways to go it alone?”
In my view, this is the wrong way to go.
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Of course, some things should be different post-Coronavirus: the
weaknesses apparent in global value chains need to be addressed.
Building strategic stockpiles of vital medical and protective
equipment will make regions better prepared for future
pandemics.
Diversifying and solidifying supply chains will make our economies
less exposed to power politics in trade policy. Beefing up
toolboxes to protect against unfair practices by others will keep
the playing field level and protect our economies.
As President von der Leyen and President Michel indicated in the
Roadmap for recovery, we should reduce trade dependencies that
make us vulnerable. We should invest in strategic value chains,
and build more resilient infrastructure.
However, none of these sensible steps should come at the cost of
closing down supply chains or limiting trade. On the contrary, an
open trade policy will be an important driver for a successful
economic recovery plan. For our companies to reap the benefits
of trade in the recovery phase, stability and predictability will be
needed in the trading environment.
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There is a strong risk that, unless we all make a big effort to steer
events in the right direction, we will see an acceleration of the
negative pre-crisis trends: the erosion of the multilateral system,
protectionism, calls for de-globalisation and de-coupling. The
Commission will continue to take a leadership role in defending
the rules-based multilateral trading system.
And I would also say to Amcham members that the support and
voice of businesses is important in this. Businesses need to
counter protectionist narratives that will ultimately harm
everyone.
The European Union is making this case forcefully at international
level, most recently in the meeting of G20 trade ministers.
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EU-US Relations
And we will continue to engage bilaterally with the US in this
regard.
There needs to be transatlantic cooperation in the fight against
Covid-19. Our two markets are closely inter-twined – for
example, EU and US pharmaceutical and medical equipment
companies have investments and manufacturing plants on both
sides of the Atlantic.
We need good, reliable channels of communication on the
measures we are each taking in the face of the crisis.
Beyond Covid-19, the EU and US are now making preparations to
reopen our economies and manage the post-crisis environment,
so we have a strong mutual interest to do this in a coordinated
manner that gets trade and investment flowing again.
Following the Davos meeting of Presidents von der Leyen and
Trump, we have been exploring possibilities for a positive trade
package that would put the partnership back on track.
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This includes a number of issues such as resolving the two long-
running WTO disputes on supports to
Airbus and Boeing, or
exploring tariff commitments.
We would also like to
find a solution to the trade dispute on steel
and aluminium.
WTO Dispute Settlement
Of course, if we are serious about a coordinated global response
to economic recovery, we cannot ignore the pressing need for
stronger rules at international level.
The rules-based international trading system with a functioning
WTO at its core will be more important than ever to create a
predictable and stable economic environment.
Let me therefore update you on the steps we are taking to protect
dispute settlement in the WTO.
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Working with like-minded WTO members since the effective
collapse of the Appellate Body last December, the EU has
developed the Multi Party Interim Arbitration Arrangement as a
stop-gap to maintain an independent dispute settlement function.
There are 15 co-signatories alongside the EU, including some of
the biggest users of the system, such as Brazil and China. I have
also extended a broad invite to the entire membership to join,
underlining the inclusive nature of the arrangement.
Furthermore, digital trade and the digital economy have played a
critical role in this time of lockdowns and restrictions. The
development of international rules, through the WTO, cannot
wait any longer. We will redouble our efforts to bring plurilateral
negotiations on e-commerce to a successful conclusion.
We should promote greater competition and the removal of
unjustified barriers. I will continue along with President von der
Leyen and other colleagues to make this case to our American
counterparts.
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Conclusion
I will conclude here, ladies and gentlemen. I hope I have provided
you with some useful insights and updates. So given that this is a
town hall meeting, I will now step down off my soapbox and take
some questions from the floor. Thank you.
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