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Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)American Chamber of Commerce Dinner |
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I'd like to start by congratulating the American Chamber of Commerce and the British-American Chamber of Commerce on your merger. Both chambers have performed an influential and important role in developing business relations between our two countries. The new Chamber, I believe, will be an unbeatable combination for promoting transatlantic trade and investment. The importance of our trading relationship is reflected in the figures. Total two-way trade in goods and services between the United States and the UK is worth around £80 billion a year. The UK and US are the number one foreign direct investors in each other's country - with UK companies investing over $180 billion in the US last year; and US companies investing $213 billion here. The Chamber plays an invaluable role in developing these links, both here and in the States, bringing people together and identifying trade opportunities. I know you work closely with British Trade International, where we too have brought together our support for both investors and exporters - our Invest UK and Trade Partners UK operations - to provide an even better service for all firms in Britain. I am proud of my Department's support for the British and American Chamber of Commerce and look forward to developing our association with you. The close links between the DTI and the Chamber are a good demonstration of how the United States and the United Kingdom, at the beginning of the 21st century, can consolidate the special relation that exists, not just government to government but also between the people of our countries. Our nations share a common belief in democracy, in opportunity for all, in liberty and in security. And we both have a tradition of free trade. Of open markets. That's what I'd like to talk about this evening. I make no bones about the fact that the UK Government has followed the political situation in the United States with interest. We all remember President Clinton's words during the 1992 Presidential Election :'It's the economy, stupid'. Well, since May 1997 we've focused on the economy in Britain. We did so because we recognised that our values -opportunity for all; work for those who can, security for those who can't; extending prosperity to everyone - depend upon a strong, stable economy. That's why, when we were elected, our immediate priority was to establish the economic stability business needs. We took action to lock in low inflation and to cut government debt. We made the Bank of England independent to ensure that interest rates decisions are taken in the best long-term interests of the economy, not for short-term political considerations. And as the Chancellor emphasised last week, we will not put that hard won economic stability at risk . There will be no return to the old short termism. We will continue to steer a course of stability. But getting the economic conditions right is only the beginning. We are also removing barriers to investment. That's why we have cut corporation tax to its lowest ever level. And introduced cuts in capital gains tax to create the most favourable environment Britain has ever seen for encouraging entrepreneurs, rewarding risk-taking and promoting wider share ownership among employees. I believe that in the modern knowledge economy we also need an active industrial policy, to create an environment for world class business success. We have seen the success of the industrial policies of individual States in the US. In the UK we're applying the lessons in our regions:
Gone are the days when industrial policy meant planning, picking winners, pumping subsidies into firms. The new policy is about skills, about innovation and enterprise. Above all, it's about competition to create dynamic businesses. Strong competition provides a spur for firms to innovate and increase productivity. In contrast, anti-competitive behaviour is a burden on the economy and on businesses which want to grow by offering better value. That's why, in the UK, we introduced the new Competition Act earlier this year. It creates the strongest competition regime ever seen in this country. I don't want to be accused of plagiarism, but I will admit that we've copied the prohibition approach which has long been established in the United States. Based on the US experience I'm confident that this new regime will play an important part in improving the competitive position of businesses in Britain. American businesses have not been made less competitive by their authorities long-standing tough approach to anti-trust enforcement. Indeed, the rigour of the competition authorities in pursing anti-competitive practices has contributed to the success of US businesses. But the US Department of Justice has increasingly found that cartels it uncovers are international ones, not just based in the United States. It is estimated that 25% of criminal anti-trust cases pursued by the US Department of Justice since 1990 were international in scope and international cartel cases affected firms in more than 20 countries. There is a good case for improving co-operation and information exchanges between national competition authorities. We have been discussing this with the US Department of Justice over the last few months. Strengthening co-operation between the Office of Fair Trading and the US authorities is important. It should benefit both US and UK firms. Monopolies and cartels do not make for dynamic, competitive businesses. That's one of the reasons why, in the UK, we have extended competition in utility markets - drawing on the US experience and learning the lessons.
Competition in the United States makes it an attractive market for British utility companies, with Scottish Power and NGC both investing in US utility companies this year. Here in the UK we have introduced full competition in gas and electricity supply. Opening up markets in the UK has opened new opportunities for many of your members. Over forty percent of all American investment in the European Union comes to the United Kingdom - creating more than 44,000 jobs here in the last year. Earlier this year, the Economist Country Forecast confirmed that the UK is the second most attractive business location in the world. The report highlighted the government's pro-business policies, the depth and sophistication of the financial markets, the comparative lightness of the tax regime and the flexibility of its labour market. It concluded that Britain's policies towards private enterprise and competition are the best in the world. Inward investors also value Britain as a bridgehead to the single European market, a market of nearly 380 million - which will grow to half a billion with enlargement. We are determined to maximise the benefits of the European market. Within Europe, Britain has been working with our partners to drive forward a radical programme of economic reform, to continue to open up the single market. We have taken swift legislative action at EU level to put in place the firm legal framework that business and consumers need to buy and sell over the internet with confidence. And we've agreed measures to bring down the cost of Internet access. We will be keeping up the momentum. We will continue to seek progress on telecomms liberalisation. And opening up energy markets throughout the European Union. Economic reform is also essential if we are to make the single currency work. A successful single currency is clearly in the interests of those countries already in the euro. But it is also in Britain's interests. The European Union is Britain's largest trading partner by a considerable margin. British exporters, inward investors and the people they employ all know how damaging exchange rate instability can be. Of course the people of Denmark have made their decision on the single currency. We believe that the British people should have the right to make their decision for Britain. Last week's result does not alter the fact that it is in Britain's national interest to keep our options open. We have set out our five economic tests; if they are met then it will be for Government, Parliament and the British people in a referendum to decide. It's not just in Europe that we need to open up competition. We now live in a global economy. But for some people, this can seem very threatening. Rapid change, decisions over which individuals have no control. As we saw in Prague last week, the backlash against globalisation is real and it is gaining power and momentum. An unholy coalition has been cobbled together. Media aware pressure groups and old-fashioned protectionists stand together shoulder to shoulder. Last December at the WTO ministerial conference in Seattle through the clouds of tear gas I could see steelworkers from Pennsylvania walking alongside anarchists. Grandmothers dressed as turtles alongside unemployed textile workers from San Francisco. Often with contradictory demands nevertheless it is the diversity of these groups which make them such a potent force in any democracy. Clearly we need to do far more to make the case for open trade. We must do this because in a democracy we will not be able to embrace globalisation if too many individuals and organisations feel they are being left behind. I believe that with the right international structures in place and working effectively then globalisation can be a bringer of opportunity and not a threat. Open trade boosts economic growth. It is about greater competition which weakens the power of vested interests. It provides greater opportunities and improved standards of living for millions rather than privileges for a few. But there is no point in pretending that the events in Seattle last December were not a setback for global free trade. We must now learn and apply the lessons of Seattle. To turn failure into opportunity and redouble our efforts to reform and strengthen the WTO. I would like to mention one current issue. News that an agreement has been reached between the EU and US on the smooth handling of the Foreign Sales Corporations dispute is encouraging. We favour a calm and constructive approach to resolving this dispute, which is very important to both European and US businesses.
On wider WTO issues, we need to renew confidence in world trade itself so that a new round can be launched. Establishing a framework for such a new round will be the crucial first step. In this context it is vital that the European Union indicates its willingness to look at liberalisation of the present regime of agricultural subsidies and tariffs. And we need to look at how we can reform the WTO itself -to increase openness in the way the WTO operates and ensure all WTO members can effectively participate. I am clear in my own mind that the essential answer to the challenges of the 21st century is not less globalisation and not new national structures to separate and isolate economies, but stronger international structures to make globalisation work in harder times as well as easy ones. Let us be clear, protectionism anywhere is a threat to prosperity everywhere. Closing off national economies only increases national and international instability. We must never forget that the path of open trade and open capital markets that we have travelled in the last 30 or 40 years has brought unprecedented growth, greater opportunity and a better life for people across the world. That's why we will continue to open markets and promote competition in Britain, in Europe and across the world. Strengthening the trade and investment links between our two countries. That is the way forward in the 21st century. It is the way to benefit both Britain and the United States. |
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Other speeches by Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)
(the following are available from the archive) |
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