Remarks by Ambassador Ronald Gidwitz to the Federation of Belgian Enterprises

Remarks by Ambassador Ronald Gidwitz to the Luncheon hosted by the Federation of Belgian Entreprises

Monday, September 24, 2018, FEB Headquarters

President Gilliot and CEO Timmermans; distinguished guests; ladies and gentlemen. Good afternoon.

It’s my honor and pleasure to join you today. I’ve been in Brussels for a little over two months now. We’re neighbors – I live just on the other side of the park. I hope that means we will see each other often.

I understand it’s been a while since the U.S. Ambassador visited the Federation of Enterprises in Belgium. That’s unfortunate – the U.S. Embassy needs to maintain an open line of communication with the business and industry leaders who drive Belgium’s economic growth. I’ve been visiting Belgium since 1965 for both work and pleasure. As Ambassador I look forward to putting President Trump’s vision to work.
Before I get into any specifics, I want to address the fundamental basis of our foreign policy in Europe. That is to preserve the West and its values that have formed the foundation of the trans-Atlantic partnership for decades. America and Europe together are the heart of the Free World. Europe is the central pillar of our international alliance system and by far our largest economic relationship, with more than 4.6 trillion euros in annual commerce. But the West is under threat. We are at the beginning a new era of great-power competition — for which the West, collectively, is under-prepared. We must adapt to preserve our partnership.

My first official act after presenting my credentials to the King was to attend the 90th anniversary of the Last Post in Ypres and lay a wreath in honor of the brave men who died there. Just last week I appeared with the Minister of Defense to open an exhibit called “Beyond the Great War” at the Royal Military Museum, which in part covers America’s entry into WWI. Since arriving, I’ve visited American fallen soldiers at all three U.S. cemeteries. In Kemmel, and in Liège, I’ve remembered the Belgians who fought bravely to ensure that even 100 years later, the West remains democratic, free, and at peace. Belgium is one of very few countries that shares with the United States this common history. America’s partnership with the Belgian people is written in blood, and affirmed by the lives of our sons and daughters in two world wars.

This enduring partnership is not just military, or political. It’s about two countries closely linked by their like-mindedness and their shared experience. It’s about trading and investing in each other, which further binds our futures together.

These trade and investment ties remain dynamic and enduring…but not without challenges. Our history of shared sacrifice and the unshakeable commitment to working together in the future requires us to speak frankly to one another when warranted, and to address irritants in the relationship when needed.

Foreign Policy in Europe

If the United States is to remain a worthy partner for Europe, and a guarantor of the defense of the West, we must remain prosperous and secure. That can’t happen if we, the United States, continue to annually run a 110 billion euro trade deficit with the European Union and a 340 billion euro deficit with China.

President Trump has made clear that his administration wants to build a trade relationship with Europe that is free, fair, and balanced. He wants no tariffs and non-tariff barriers. The United States can no longer sustain our economy with enormous trade deficits with the European Union and China. This requires a recalibration of our trade relationship that addresses structural imbalances that impede growth on both sides of the Atlantic.

US-EU Trade

Presidents Trump and Juncker have made clear that they want to see an ambitious trade initiative that benefits both the EU and the United States. They envision a deal that:
• Reduces tariffs and non-tariff barriers;
• Addresses common concerns about unfair trade practices; and
• Reduces bureaucratic obstacles that impede transatlantic trade.

Again, our goal is zero tariffs, barriers, and subsidies on both sides.  For now, we are focused on picking low hanging fruit.  This includes overcoming regulatory and non-tariff barriers by taking steps like agreeing on mutual acceptance of medical device standards, securing greater EU acceptance of some U.S. soybeans, and lowering barriers in pharmaceuticals and chemicals, just to give a few examples.

An expedited negotiation will benefit both the United States and the EU by breaking down barriers, resolving trade irritants, and working on common challenges, such as the threat posed by China’s economic aggression.

The Belgian business community should push the EU hard to make a deal. You have a high stake in the matter. Belgium itself is really not the problem. We run a trade surplus with you. But you are part of the European Union whole in so far as trade and trade regulation is concerned.

Ours is a trade relationship worth fighting for: In 2017, total trade between our two countries stood at around 46 billion euros. Belgium is our 12th largest trading partner. Some of you represent the largest American companies with offices and production centers in Belgium and I look forward to promoting your contributions to the U.S. and Belgian economies. We have companies like ExxonMobil who have been in Belgium since 1891, currently employing 2,200 people at three plants; or Pfizer who established here in 1952 and employs now more than 2,500 people. The United States is committed to free trade, and to doing business with Belgium and Europe.

U.S. companies are important job creators in Belgium: the 900 majority-owned U.S. groups active here directly employed more than 126,000 people last year. The top 50 U.S. companies in Belgium alone employ around 80,000 people, which highlights the importance of large multinational companies as a source of direct jobs – to say nothing of the ecosystems they create.

Likewise, total Belgian investment in the U.S. has increased more than 50% over the last few years according to the U.S. Department of Commerce, from 24 billion euros in 2011 to over 38 billion today. In terms of jobs, that makes Belgian firms the 10th-largest foreign employer in the United States, supporting about 160,000 American jobs.

To take one example – a little less than two weeks ago, I had the pleasure of visiting Van Hool, the bus manufacturing company. They announced last April that they will establish their first U.S. manufacturing plant in Morristown, Tennessee, which will result in 600 jobs with 40 million euros worth of investments.

So I begin my term as Ambassador knowing that commercial ties between the United States and Belgium are deeply rooted. This makes the private sector in Belgium a powerful force as we undertake a comprehensive re-thinking of our trade partnership.

Joint Security

Our continued common prosperity is also dependent on our joint security. Deterring potential security threats to Europe continues to be a priority for the United States, and our solemn pledge to you as a NATO ally. Belgium is an active participant in NATO and coalition operations in Afghanistan, the Baltics and in the Defeat-ISIS campaign. We especially value our 40-year partnership with you as an air power, and hope that can continue. In short, Belgium has consistently shown itself to be a highly capable partner.

But it’s no longer viable for the United States to shoulder a disproportionate burden among NATO allies. All NATO allies promised in 2014 to work toward agreed-to levels of defense spending and investment. We recognize that Belgium has taken significant steps to stop the decline in spending. But you need to do more. A failure to meet NATO commitments hurts our collective security. All NATO members are at greater risk when countries do not meet the pledge. I don’t have to tell you how important security and stability are for businesses operating in Belgium.

Iran

The struggle to protect the West from bad actors is also evident in the President’s decision to withdraw from the JCPOA. Instead of curbing Iran’s bad behavior, the JCPOA had emboldened Iran, and aided in funding Iranian malign interference in the region and even in Europe. In Belgium you’ve seen Iran’s malign influence first hand, as two Iranian operatives were arrested in Woluwe-St-Pierre, because they were closely involved with a plot to bomb Iranian dissidents in Paris. We think it’s critical to work with the Belgian government to rebalance the approach to Iran’s security threats.

Russia

The same is true for Russia. The United States and Europe stand shoulder-to-shoulder in confronting Russian aggression through sanctions and deterrence. We know Belgian businesses have incurred losses as a result of the Russia sanctions.
However, our trans-Atlantic unity is essential to convey to the Russian government that we will not stand for flagrant violations of international norms – chief among them the continuing occupation of Crimea and fomenting of violence in eastern Ukraine. Again, Belgium is playing a key role – participating in NATO’s Enhanced Forward Presence in Lithuania and flying in the Baltic Air Police mission.

We also work closely with Belgium, and with the nations of the Europe Union, to address so-called hybrid threats emerging from Russia and elsewhere: disinformation campaigns, hacking, and manipulation of social media. We must address these malicious tactics that seek to divide our societies, weaken our confidence, and undermine the political and economic successes we’ve achieved together since the end of the Cold War. The response to these threats should not only come from governments. The private sector also plays an important role in sensitizing our populations to the threat, publicly condemning malign actors, securing our networks and sharing information with law enforcement.
Speaking of Russia, we worry about the lack of a strategic energy policy in Europe. Russia’s budget is critically dependent on oil and gas revenue. We in the West are substantially upping spending to increase our defenses in response to their aggressive behavior on one hand and financing their expansionism with increasing energy purchases on the other. I wonder if we’ve already forgotten they cut off the Ukraine gas flow in a dispute just a few years ago.

China

Security is also linked to our trade relationships with other countries around the world. Often when I discuss Chinese policies and practices related to trade, the conversation also transitions into Chinese investment. I know that Belgium prides itself on being an open economy. The United States is also open for business. Both our countries have long been the world’s premier destinations for international investment.

However, we must also be vigilant against the potential security risks inherent in foreign investment. As your government and industry has already acknowledged, sales of critical infrastructure, such as power grids or ports for example, must be considered carefully. Investment screening mechanisms are increasingly important in the face of Chinese economic aggression. We hope the EU will soon issue new directives on investment screening.

Taking strong U.S. economic positions on issues like Iran, China or Russia sometimes causes disagreements with some of our allies. But the long-term costs of neglecting these threats far outweigh whatever short-term benefits we get from the appearance of political unity today. In taking strong positions, we are not targeting our allies: we are countering those like Russia, Iran and China that are putting our collective security at risk. We will all be stronger and safer as a result.

In closing, I welcome a frank discussion in this room that is grounded in respect for our history of shared sacrifice, but also because we have carefully cultivated and grown a commercial partnership rooted in our common investment and trade principles. The relationship has flourished over the years into one of the most dynamic, innovation-driven partnerships in the world. As we face today’s myriad global challenges — whether we are in boardroom negotiations, R&D centers or in the Baltic air space – our partnership is enduring and essential to the future of our two countries.

Thank you.