British American Business speech
The Foreign Secretary William Hague welcomed the new US Ambassador and spoke about the economic ties between Britain and America.
Good evening ladies and gentlemen and welcome to Lancaster House. I’d like to thank British American Business for organising this event and say what a pleasure it is to welcome the new US Ambassador, Matthew Barzun, his wife Brooke, and their three children to London.
He brings a wealth of experience to this role. He has enjoyed great professional success whether it’s in business, as an internet pioneer in Silicon Valley; in politics, as the National Finance Chair for President Obama’s 2012 re-election campaign; or in diplomacy, as the former American Ambassador to Sweden and I am confident that he will replicate this success here in Britain.
So, I hope you are settling in well and that you and your family are adapting to life in the UK. I want to say both personally - and on behalf of the British Government – how much we look forward to working with you in the years ahead.
You certainly follow an illustrious line of former US Ambassadors to this country which includes five former presidents – from John Adams to James Buchanan – and the father of another President. But given that John Adams had previously been one of the leaders of the independence movement, it’s fair to say that you arrive here in a slightly more favourable position than he did.
Nevertheless, since the 18th century our two countries have formed not just one unbreakable bond, but a series of ties at every level of society from politicians to pop stars, which bind our people through a cultural affinity that stretches back for generations.
And I think this is about more than just nostalgia. This relationship also serves our hard-headed national interests, keeping our people safe and furthering their prosperity through the indispensible sharing of intelligence that I see every day you know about the cooperation between our armed forces that I value every day, and the vast trade in goods and services that flows across the Atlantic every day.
As we look to the future our task is clear: to make what is an incredibly close relationship even closer; and to ensure that ours is a partnership that remains vibrant and relevant in the 21st century, one that has a positive impact on the lives of our people, and is about embracing the future as well as treasuring the past.
The economic ties between our countries have always been at the heart of our relationship and a source of vibrancy, dynamism and shared success.
In Britain, as in the United States, the economy is turning a corner. We held our nerve when many told us to abandon our plan, and thank to the efforts and sacrifices of the British people, we are creating a foundation for sustainable growth, one of increased exports and inward investment, not profligate spending and excessive debt.
The reforms that we are implementing - together with the creative talent and entrepreneurial spirit that exists within many of the companies here - are a formula for success. But there is more that we can do to accelerate growth by opening markets and removing barriers to trade. And at the forefront of that effort will be the negotiation of an ambitious Transatlantic Trade and Investment Partnership, which is the focus of my remarks this evening.
But before getting to that in more detail, I want to look at the position of the British economy today and to consider where we have come from.
As the Chancellor said in his speech on Monday, the economic collapse of 2008 to 2009 was even worse than we originally thought and repairing it will take even longer than we had hoped.
We were in the deepest recession since the 1930’s; made worse by a financial crisis, a troubled Eurozone, and a global economic slowdown.
The recovery is still in its infancy, and risks remain, but we are now tackling the underlying structural weaknesses that became clear as day in the light of the financial crisis.
By lowering our corporate tax to among the most competitive in the world, we are enticing new investment to our shores.
By reforming welfare, we are ensuring, once again, that it pays to work in this country.
By raising standards in our schools and securing the finances of our universities, we are creating more choice and flexibility in our education system.
By increasing the number of apprenticeships and University Technical Colleges, we are widening the skills base of our workforce.
By embarking on the largest programme of investment in the railways since the Victorian era, we are bringing this country’s infrastructure into the 21st century.
And by opening or upgrading up to 20 new Embassies and consulates around the world, as we’re doing even at a time of austerity, and building up the Foreign Office into a great institution as it should be once more, we are creating the connections and opportunities around the world that British people will benefit from in decades to come, whether it is companies looking to export or young people hoping to go overseas to study and work.
These reforms will also help British business to compete with the dynamism and recovery is sweeping Asia and Latin America in the form of the green-tech firms in Shanghai, the digital leaders in Bangalore, and the array of other sectors where companies from the South and East are now challenging our own.
I refuse to accept that we can’t deal with this competition, can’t compete with this competition, because we possess the skills, the creativity, and the boldness of spirit to secure a greater market share, and to continue that long history of innovation which has shaped Britain today.
We are one of the world leaders in space technologies, aerospace and automotive engineering with more than 3,000 Aerospace companies operating in the UK, including global leaders such as BAE Systems and Rolls Royce;
We have the largest creative industry in Europe, with globally renowned companies in advertising, fashion, TV and film; it was a great experience for me to visit Los Angeles a few weeks ago and hear about the enthusiasm to make films in the UK.
Our advanced materials sector is at the forefront of developments in global manufacturing with the creation of innovative composites, plastics, and nanomaterials;
And we are home to the world’s largest foreign exchange market, its biggest insurance market and one of the largest centres in the world for fund management and international legal services.
But the challenge now is to ensure that this success is built on, and that the reforms we are implementing, translate into the export-led recovery that is critical to the future of our economy.
We cannot return to unsustainable, consumption-fuelled growth that created this crisis. That is why this government – especially the Foreign and Commonwealth Office and UKTI – is aggressively promoting British goods and services around the globe, and it is why we are battling to bring down barriers to trade and to fight protectionism wherever it rears its head.
Both Britain and the United States have always led the charge for free trade, and we continue to today.
We both believe that by reducing tariffs, subsidies and quotas, and making sure regulations are kept to a minimum, you can improve the lives of billions, including those in developing countries.
But we also know that by fighting protectionism we give companies the best possible chance of competing fairly in foreign markets. That is why both our countries and both our Governments are so in favour of an ambitious Transatlantic Trade and Investment Partnership, and why it will be a huge priority for this Government – for the Prime Minister down – over the next twelve months.
Whether you are a car assembler in Detroit, a dairy farmer in Normandy, or a whisky distiller in Speyside, this deal matters to you.
It has the potential to be the biggest trade agreement ever; a once in a generation opportunity which, if it isn’t seized, may not come around again for quite a long time. Business is calling for it, politicians on all sides want it, and at no time in recent history have the people of Europe and America needed it more.
The reasons for this wide support are compelling, and they underline why it is so vital that this agreement remains ambitious in scope, removing the remaining trade barriers could add an estimated £80 billion to the US and £10 billion to the British economies, leading to much needed growth and securing millions of jobs on both sides of the Atlantic.
Tariffs between the US and UK are already low, but the sheer volume of trade means that dismantling them completely would bring huge benefits. Last year over a quarter of British exports went to the US, and we have nearly a trillion dollars invested in each other’s economies. To put this into perspective, US investment stock in the UK is eight times the size of US investments in China.
So the potential is vast, but the overwhelming gains would come from improving consistency between the EU and US regulatory systems. That is why we need negotiations to be ambitious and comprehensive, not only eliminating tariffs, but also achieving regulatory coherence in sectors such as vehicle manufacturing, pharmaceuticals, and financial services.
If we achieve this, then this agreement would not only give an important lift to businesses, it would add a further £380 to the annual income of every household in the UK.
Second, it will send a powerful message that we are willing to take a lead on global trade, providing a much needed boost to the liberal economic model.
Despite the impact of the financial crisis, and the increasing prominence of new centres of economic power in Asia, Latin America and the Gulf, the EU and US still account for almost half the world’s GDP and one third of its cross-border trade. That means we are in a unique position to shape global economic governance in line with our values, particularly in new and emerging areas such as digital and bio-technology.
A trade agreement of this magnitude would show we are committed to leading from the front, setting an important example to developing countries that may be tempted towards protectionism, and possibly even giving much needed impetus to multilateral negotiations in the WTO.
And third, it will further the Prime Minister’s vision of a more competitive and flexible Europe, one that is focussed relentlessly on creating jobs and growth for its citizens.
Negotiating trade agreements of this scale is an area where the EU can add much to the economic fortunes of all of its member states, and that is why the UK played such a big role in placing it on the EU’s negotiating agenda and why we were so determined to secure approval, and we did, for the launch of negotiations at the G8 summit in Lough Erne.
So the potential gains from this agreement are indisputable, but we must now move quickly, before the favourable climate on both sides of the Atlantic passes. That means in our view completing negotiations in less than two years, a timeline that is more than achievable.
To maintain the current momentum and to ensure that the agreement lives up to its promise, we need businesses up and down Britain, across Europe, and on both sides of the Atlantic to make your voices heard, and to tell Governments, Parliament and Congress what you believe are the biggest barriers to transatlantic trade. On this, I particularly want to thank our hosts, BAB, for giving such strong support to the deal and for promoting its value to both American and British businesses.
Over the next year we will continue our discussion with business so that we understand the challenges you face and can reflect those challenges in the EU negotiating position, getting the best possible deal for our companies. We will also be directing our network of Embassies across Europe to lobby in support of this agreement so that we ensure political will does not fade in the face of difficult decisions. The same is also true of our US network, where promoting the agreement is a priority for our diplomatic posts across the country, from Seattle to Miami and from Los Angeles to Boston.
There will certainly be obstacles that we need to overcome, but an agreement has never been as necessary, or as achievable, as it is now. So with your support, I hope that we can succeed.
It’s a critical period for the British economy, as we move from rescue to recovery. For the first time in a long time confidence is beginning to return.
But that recovery is still in its early stages, and there are still pressures on the cost of living and that’s why - in spite of the positive signs in the economy - this deal remains a crucial prize. It’s about more than just creating growth; it’s also about reasserting the strength of a transatlantic partnership which adapts to the times, which focuses on the needs of its people, and which is prepared to show leadership in shaping the course of this century just as it did in other ways in the last century. And that’s why together we must reach out and grab this deal with both hands. It is why the UK is so committed to it and why we want business to support it. We cannot do it alone.
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