Strengthening the Transatlantic Economy: Moving beyond the Crisis

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Madame Chair, Senator DeMint and Members of the Senate Foreign Relations Committee Subcommittee on European Affairs. Thank you for inviting me to testify today on this important subject. In September I appeared before the full Committee in conjunction with my nomination as President Obama's Under Secretary of State for Economic, Energy, and Agricultural Affairs. I am grateful for the consideration the Committee and the Senate showed me during the nomination process. And I am honored by the trust the President, Secretary Clinton, and the Senate have placed in me in my new position. I am very pleased to appear here today to highlight our relationship with Europe as a key part of our shared interest in a robust global economy. In my remarks today, I'd like to focus on the importance of our economic relationship with Europe and the potential the Administration sees in using that relationship to boost America's international competitiveness and create jobs in the U.S. Enhancing our trading relationship with Europe is one way to do this. Attracting more foreign investment which can produce high- quality jobs and bring us new technologies is another. We look forward to continued cooperation with the Congress, our national Governors and Mayors, and the private sector as we realize these goals.

The U.S.-EU Economic Relationship The U.S.-European economic relationship is one of the central drivers of the world economy. To put it in perspective, the value of U.S. goods and services exports to the EU is over five times the value of our exports to China. From 2000 to 2009, over half of total U.S. foreign direct investment (FDI) was in Europe. The stock of U.S. FDI in Brazil, Russia, India, and China (the BRICs) combined in 2008 accounted for only 7% of the total U.S. investment stock in the EU. As a further illustration, the existing stock of U.S. FDI in Ireland alone of $146 billion in 2008 was more than double the total U.S. investment stake in Russia, India and China combined ($71 billion). These percentages and figures are likely to change as the economies of the BRICS and other emerging economies grow and as their role in the world commerce increases. But for the moment and for some time to come, they will underscore the enormous economic importance of Europe to the United States to American jobs, exports, profits, and overall prosperity. Europe is the most important "foreign source" of jobs in America. European-owned firms in 2007 employed roughly two-thirds of the 5.5 million U.S. workers on the payrolls of all foreign firms operating in the U.S. combined. In fact, the majority of foreigners working for European-owned companies outside of the EU are Americans. Many corporate brands that Americans hold in high esteem are European- owned. How many Americans know, for instance, that, Ben and Jerry's ice cream and Dove soap, for example, are owned by Unilever, a UK firm? And many U.S. brands are, of course, hugely popular in Europe. Starbucks, for example, has more outlets in London than in Manhattan. We need to build on this strong transatlantic foundation as we continue to construct new international economic rules and architecture to meet today's challenges. This is why my colleagues and I in the Administration intend to take a very hands-on approach to developing our economic relationship with Europe and with the EU in particular.

The Potential of the Transatlantic Economic Relationship Given the importance of transatlantic trade and investment in supporting high-quality jobs in the United States, I cannot emphasize enough the importance of making further efforts to remove barriers to commerce between the United States and Europe. And this is not only in America's interest it is in Europe's as well. The United States and European Union need to work together on a number of levels in spurring multilateral liberalization in our globalized world; promoting good economic policies in third countries, especially the major emerging economies; and of course, in strengthening our bilateral relationship. …