Good afternoon and thank you for that introduction. I’m delighted to join this distinguished group that represents the largest industrial sector of one the world’s largest industrialized countries. I would just like to make a few comments about what I see as the future of the U.S.-German economic relationship—a partnership that is the cornerstone of a robust trans-Atlantic alliance.
Today, the United States and Germany share an opportunity to expand the reach and the benefits of the global marketplace to more people and more countries around the world. This won’t be easy. Just last year, global exports plunged by over 35 percent, global output was contracting at an annual rate of six percent, and financial markets were frozen. But confidence in the global economy is growing. Since the G-20 Summit in April 2009, leaders of the world’s largest economies came together to dig out from the rubble. Together, we responded with unprecedented cooperation and scale, injecting $5 trillion of global fiscal stimulus, and mobilizing an additional $1 trillion for international financial institutions, including for trade finance.
The crisis has taught us some important lessons. We know that failures in coordinating financial sector regulation were among the causes. The task before us is to work within the context of the G-20, Basel Committee and the Financial Stability Board to address these failures. We want to create a framework that expands global market opportunities while respecting the principles of economic cooperation.
I believe the Transatlantic Economic Council (TEC) is an effective vehicle for achieving that vision. Through the TEC, we can chart a path that to prosperity that breaks through non-tariff trade barriers, create jobs and promote economic growth. We hope to use the TEC to forge new standards for emerging sectors like nanotechnology, e-health, and biofuels, where none currently exist. And while we harmonize U.S. and European standards in these areas, we can also use the TEC as a forum to discuss other areas of mutual interest.
Beyond our trans-Atlantic partnership, we want to work with Germany and other leading economies on a new framework for balanced global growth. In today’s shared and seamless world, we know that developments in Berlin in the morning will be felt as far as DC and Tokyo by the afternoon. So we want to make sure that countries seeking to address economic and financial challenges come together early on, so their collective policies don’t lead to unsustainable imbalances.
Trade and Investment
And as we address the shared challenges of the global economy, we must also be ready to seize the opportunities that come with the expansion of new markets as well. This is the idea behind President Obama’s National Export Initiative. This program will increase New-to-Market export successes. Our goal is to double U.S. exports over the next five years. Our embassies are amplifying business outreach and pursuing international opportunities for collaboration with American businesses, large and small. And Germany's trade shows are an excellent means of reaching potential buyers from around the globe. Germany’s highly-skilled labor force, favorable business climate, and strong economic growth are just a few reasons why we see so many U.S. firms seeking access to this market.
Thirty percent of German foreign investment goes to the United States (roughly $200 billion or 10% of all FDI to the U.S. in 2008). And United States direct investment in Germany in 2008 was over $100 billion. So, I’m sure all of you understand why Germany remains the United States’ most important trading partner in the EU. This is a strong foundation. But we look to build upon it by facilitating more investment in innovation.
We know that clean-energy technology can help fuel our growth in the years to come without damaging our environment. And development of new medicines can keep us living longer and healthier, without sacrificing our financial wellbeing. Harnessing the energy, talent, and ingenuity of our entrepreneurs to tackle our most pressing global challenges is always a successful business model.
On the subject of pharmaceuticals, I’d like to make one comment. We appreciate Germany's desire to provide patients with the most effective drugs while controlling the costs of medicine. But we also share the concerns of American pharmaceutical companies regarding the protracted legislative process for regulating drug prices. We hope that in the future, industry stakeholders will have a seat at the table as these important reforms move forward to continue providing German customers with the latest and most promising medications. Safeguarding these and other treasures of the new knowledge-based economy requires taking the responsibility to protect intellectual property rights. We are proud to stand as partners with Germany on this issue.
U.S.-German cooperation in expanding trade, promoting innovation, and strengthening multilateral economic frameworks is critical to achieving global economic recovery. In closing, let me just say that the future of the U.S.-German trade and business partnership is bright. But it will require the cooperation of many of you in this room to help achieve our shared vision for balanced and sustainable growth. Thank you.