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The Rt. Hon. Baroness Symons of Vernham DeanBritain's way of doing Business |
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Let me say first how delighted I am to be here in Cleveland addressing such an impressive business audience. I am very grateful for the enormously kind welcome I have received from the moment I arrived in the city, and for the warmth of the response at the meetings I have had yesterday and today. Several people have asked – why Cleveland? I wanted very much to visit America's heartlands. I go often to Washington, New York and Los Angeles, great cities all of them but I wanted to visit a great industrial centre, to understand a little more about this complex country, its economy and what makes it tick. When Cleveland was suggested I jumped at the idea, what better place to take the opportunity to talk about a subject close to my heart: trade and our relationship with undoubtedly the most influential country in the world - the United States of America. And there is no better organisation to host this event than the British American Chamber of Commerce. I have had the honour to address many Chambers of Commerce on both sides of the Atlantic and I know that their contribution to our bilateral trade and investment relationship is impressive. This is even more true of the Cleveland Chamber who has a reputation that goes far beyond Ohio. Just two years ago you hosted the autumn conference of the entire BABC, and set a new standard for its success. Of course you did have a bit of an advantage since not every host city has a Rock 'n' Roll Hall of Fame for it's Saturday night conference venue. Indeed not every city has a Chamber Board and even a Consul General willing to turn themselves into a band of 1960s hippies for the occasion! It must have been quite a sight! But more seriously, your ability to attract top speakers from the business and political world of Ohio is very impressive. Yesterday I had a fascinating meeting with Mayor Jane Campbell who remembered fondly coming here for your conference in 2000. We also discussed future trade, which I would like to talk about in a moment or two. Ohio Trade with UK Of course the activity of the Cleveland Chamber reflects the impressive economic weight of this city and this state. Only four states in the Union have more Fortune 500 headquarters or exports than Ohio. And I am delighted to say that your links with Britain are strong: we are the second biggest foreign investor, employing almost 50,000 people in Ohio with a two-way trade of about $2.5 billion. When the Prime Minister appointed me to this job 18 months ago - he made me a Minister in 2 government departments - the Department of Trade and Industry and the Foreign Office. It was a first in government, and he did it because he believes that trade and foreign policy are inseparable issues. Trade should be mainstreamed into our international relationships and we have to recognise how much that trade can be affected by what is happening in foreign policy. For me, this is particularly true of the US, because I am the Minister with front line responsibility politically as the International Trade Minister. Trans-Atlantic Relationship And of course there is more to our relationship than just trade. I fondly remember Ray Seitz, the former US Ambassador to London and a good friend, once said, "I don't think any two nations have had their relationship poked at and picked over more than the United States and the United Kingdom. Everyone seems to have something to say." Today, I hope you will not mind if I pick over it a little myself. I believe that the Trans-Atlantic relationship is more important now than it has been, probably since the first half of the 20th Century. The horrific events of 11th September have, if anything, brought us closer in spirit, and as important, purpose and determination. I was with the Prime Minister on that day - we had travelled to a conference out of London and when the appalling news reached us he was absolutely clear from the start – he never wavered. As he said, we stood shoulder to shoulder with the USA because those attacks were attacks on all of us - and on what we stand for. Simply, from whatever way you examine our relationship, the United States is our closest friend and staunchest ally. Our relationship is firmly based and firmly rooted because we share so much with you. We share values of freedom and of free speech. We share the ideals of democracy of human rights. We believe in the rule of law. And we share a real commitment to global prosperity and international security. These values and beliefs go well beyond issues of individual policy. The relationship is so varied that no area of disagreement - and there are of course a number - has a fundamental effect on the confidence in the closeness of our relationship. Now, in the new millennium, this relationship is again at the very heart of the pursuit of security and justice in a very uncertain world. Iraq Let me say something about Iraq. The US and the UK agree that Iraq poses a real and unique threat to the stability of the region and the rest of the world. We cannot allow Saddam's, 'weapons of mass destructions', ambitions to go unchecked. As Tony Blair said recently: "This is an issue for the wider world. America shouldn't have to face this issue alone, we should face it together." The UN has been mandated by the whole Security Council (by countries as diverse as Mauritius and Syria) to disarm the Iraqi regime of its 'weapons of mass destructions'. Dr Blix and Dr El Baradei, and their teams of inspectors have a difficult and delicate task. We have every confidence in them to pursue that task on the basis of the tough and uncompromising terms set out in UNSCR 1441. The international community's determination is clear - across the US, the EU, the Arab League, and the Non-Aligned countries. Our strength is in that united determination. I have been asked, why Iraq? Iraq displays a uniquely dangerous combination of four appalling characteristics: the possession of 'weapons of mass destructions; a record of using those weapons; persistent defiance of mandatory UNSCRs; and a human rights record that is sickening. This is a cruel cocktail, making the Iraqi regime a threat to the region and the world. And of course our international relationships are not just important in times of crisis. The UK's two most important partners are the US and the EU. Our critics would have the world believe that, because we are close to both, it impedes our ability to have a full relationship with either. This is nonsense. I see absolutely no contradiction in being part of Europe and yet close to the United States. In fact one of our strengths lies in our ability to articulate each other's views and positions. We can and do play a pivotal role in drawing the US and our European partners together. I am genuinely proud to be a committed European and a dyed in the wool Atlanticist. My direct experience of the US and the EU as a Minister in Tony Blair's Government since 1997 reinforces that view. First, as a Minister at the Foreign Office, then as the Minister for Defence Procurement at the Ministry of Defence, and more recently as the Minister for International Trade & Investment. I have seen both relationships as real forces for good. We need look only to the expansion of the NATO Alliance, and the expansion of the European Union, which is on the agenda for Heads of Government today in Copenhagen. So you will not be surprised to hear me say that I think that the Trade and Investment relationship is absolutely vital. We live in a world of global trade and investment flows - the US had $250 billion of direct investment in the UK at the end of 2001 - some $33bn in the manufacturing sector and the UK had $220 billion of direct investment in the US. The UK has the largest stock of investment in the US. Trade flows between the US and UK totalled $140 billion in 2001. US investment in the UK capitalises on the resilience and strength of our economy - low interest rates, flexible labour markets (and despite what you might have read recently in the newspaper, we have a very low comparative rate of industrial disputes), responsible regulation and low tax. And we also have a solid and impressive science and technology R&D base. Nine Nobel laureates in the field in the last ten years give some indication of the excellence of scientific talent in the UK. The exchange between the US and UK's 'knowledge-driven' companies is impressive, and we want to see more of it. The Prime Minister takes a close personal interest in our science and technology base and the Government has recently committed more resources to growing our capability. By 2005 to 2006 the UK science budget will reach just short of $4.7 billion (£3 billion), more than double the figure in 1997-1998. But more traditional manufacturing industries are important too, it makes up for one third of US investments in the UK and one quarter of UK investment in the other direction. Patricia Hewitt, Secretary of State for Trade and Investment, is committed to improving the environment for manufacturers, and has established a strategy for the sector, aimed at both large and small and medium companies established in the UK. Trade is good Trade and investment bring prosperity, choice and value for money for consumers and provides export opportunities for our farmers and companies. This has got to be a good thing. The research carried out in the UK by Nottingham University shows that businesses engaged in international trade tend to be more productive and competitive than those that don't. They also offer better conditions and pay staff more. But increasingly "trade" and particularly "Globalisation" have, in some quarters, become terms of criticism. We must challenge this contention. It is not based on fact. It is simply untrue. I firmly believe that it can be a force for good. Of course it is possible that a business may be conducted in a disreputable way. But overwhelmingly businesses are conducted properly in the current climate of openness. Transparency and regulation on both sides of the Atlantic is well rooted and supported. What I think the business community should be better at arguing is the case that trade and globalisation can and should be used as a positive force for good. Perhaps I can explain a little more of why I think this both true and important. The EU and US were the driving force behind trade liberalisation under the original GATT. We now need to unite our forces again, and build on the launch of the current trade round. And while many countries played an important part in that success, it is undeniable that this would not have happened without the EU and US pulling in the same direction to persuade others to get on board. Your Ambassador Zoellick and our Commissioner Lamy are a formidable team. But, to reach a really successful conclusion to the Doha Round we are all going to have to work very hard together and even more closely in the coming months and years. Perhaps I can also add that we in the UK were delighted when Congress granted President Bush Trade Promotion Authority. I look forward to the US Administration engaging in the current trade negotiations in a positive way as possible across the whole range of issues. It is clear that at the moment the trade world is wrestling with some very tricky issues. The tariffs and quotas addressed in earlier Rounds were not easy to deal with and they are not going to be any easier now. But let me give you just one statistic from the World Bank: if we halve world trade tariffs and increased trade by $400bn per year - $150bn for developing countries. $150bn is three times the amount the world community gives developing countries in aid. And dollar for dollar, trade goes so much further than aid. This is a huge prize for the world community to win in this trade round. Yes, of course we in the developed world want to increase our prosperity, we must satisfy growing demands on healthcare, education and housing but the developing world must be included too. 1.2bn people still live on the edge of starvation, others are in fragile economies. These countries may become fertile grounds for those looking to exploit social division and exclusion. So, lowering tariff barriers that distort trade are vital if we are to be able to help developing countries into the family of trading nations and increase not only our trade but also our security. In this context the recent US proposal on modalities on non-agriculture market access were detailed and bold and I very much welcomed them. Hopefully, along with the earlier EU proposal, it will provide a much needed impetus to the negotiations in this area. And we are now also addressing regulatory and other non-tariff barriers. These raise issues of governance and sovereignty, issues that we are all too familiar with in the UK. It will require a new approach to deal with these issues, and the approach will rely heavily on co-operation between the EU and US. Yes we've had problems - the EU has been unhappy about your steel tariffs. You are unhappy about the EU position on genetically modified organisms, and we have very considerable difficulties over agricultural products. But I believe that we should look at ways of moving forward in our relationship rather than just defending what we have. That is why I welcomed the launch of the Positive Economic Agenda at the EU-US summit in May. It embodies a commitment, on both sides of the Atlantic, to prioritise action in a number of areas. To try to overcome our difficulties without resorting to hugely lengthy and very costly trade disputes. It reflects a desire to go well beyond the traditional trade liberalisation agenda of the WTO. And it represents an encouraging, positive focus on our trading relationship. EU/US Inter-dependence It is vital because we must not underestimate the scale of economic interdependence between the European Union and the US. The annual two-way flow of goods, services, and foreign direct investment between the United States and Europe is now nearly a trillion dollars. In one decade, European direct investment into the USA has increased more than tenfold. I have been fascinated by the preliminary studies undertaken into the potential benefits for growth, prosperity and jobs in both the US and Europe that might result from a wide-ranging effort to fully open the trading and commercial relationship across the Atlantic. It shows that removing bilateral tariff and non-tariff barriers in goods and services could raise employment by a massive 1.3 million in the EU, and it could cut EU prices by at least 2.5 percent. And, by only removing tariff barriers on protected goods, the US could gain up to 300,000 jobs. These are impressive figures indeed. But, as well as removing barriers, we must also establish a framework for deeper co-operation, so that we do not create new barriers to trade. Regulatory co-operation must be an integral part of that process because of the obvious potential benefits from greater transparency and consultation. Also because of the danger that regulatory disputes will place, which may create an unnecessary strain on our economic relationship. There are other new and different challenges to world trade. Increased global threat of terror means that we must redouble our efforts on aviation and maritime security. Safety must always be the priority. Without that people will not travel and unless the business community can move around with confidence business and trade will suffer too. Telecommunications - the fax, email, teleconferences are all terrific tools - but human contact, the smile, the handshake, is irreplaceable. So sharing our expertise in how to make travel as safe as we can is vital. Protecting our goods and cargo in transit is vital. So the issue is how to find that crucial balance between increasing confidence in secure travel and growing our trade links. Terrorists have many objectives, to destroy people and buildings, to disrupt financial institutions and transport, to stop people coming together for purposes as innocent as theatre going in Moscow or dancing in Bali or relaxing in Mombassa. We cannot give in to this, we have to do everything we can to fight back for our own values, our security and prosperity or we let them win by default. But let us remember too that the cast majority of our trade is trouble free - there is a great deal of it - but we would all like there to be more. What we all need to concentrate on is how to help the business community make those vital contacts, find the partnerships that will increase our trade, which is much of what we've been discussing yesterday and today. I was delighted with the meeting I had with Mayor Jane Campbell and I hope that we will find a way of working together to help our trading communities and those parts of our business communities that haven't started trading overseas - but who want to. I have had a terrific time here - thank you all very much. I've met a huge number of people in a very short time - eloquent, persuasive advocates for Cleveland and for Ohio. People, I think, who are committed to trade, improving the quality of life, the prosperity and the well being of all our citizens on both sides of the Atlantic. |
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Other speeches by The Rt. Hon. Baroness Symons of Vernham Dean
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