official texts and speeches
Redefining Roles and Interests in Southeast Europe
10th annual Thessaloniki Forum
Hyatt Regency Thessaloniki, May 24-25, 2004
May 24, 2004
Speech by Eric S. Stewart
Deputy Assistant Secretary for Europe, Department of Commerce
I am responsible in the U.S. Government for the economic and commercial policy for 50 countries in Europe; that includes Russia, Turkey My travels have taken me through most of Europe, from Washington, to Thessaloniki today, but also to Skopje, Bucharest and Sofia as well, and I had the opportunity to engage first hand with those governments. I have seen first hand the hard work that our friends here in southeast Europe are putting forth to build peace through prosperity. and the Caucus region as well.
The U.S. Government is proud to be an active and determined partner in this historic task. But, it is the work of the private sector -- and that is an important point -- not the U.S. Government or not the EU government that will do the most to modernize the economies of the region and to bring true wealth to the people of southeast Europe. That is why today’s event is so significant and why your participation as the business community is essential. The United States is heavily committed to working with the American private sector to promote the economic and commercial development of southeast Europe. Economically diverse and efficient economies are key factors in the stability and peace and the growth of the region.
I would like to speak to you today about the U.S. Government’s efforts to support this critical process. I will divide my comments into three sections. First, I will talk about U.S. – Greek relations, then I will talk about southeastern Europe and then finally I will make some brief comments about Turkey.
Greece
I say to Greece and those of you from Greece welcome to the center stage of the world. Coming this summer all eyes will be on Greece. It is a wonderful and historic time and I congratulate you on the process of bringing the Olympics to Athens. As was mentioned by Ambassador Miller, President Bush and your Prime Minister had a wonderful meeting; I actually got to see it live on CNN sitting in my office; they had a wonderful discussion on the upcoming Olympics and the importance, not only to Greece but the importance to the world. It really is an important and significant time and if I can say this in sort of an emotional way. The world really needs a safe and secure Olympics. It will do the world good to see that happen and see it happen here in Greece. So, I comment you for the work that has been put in; I know that the U.S. Government and the U.S. business community have been extremely involved and very active in the process.
The United States admires the hard work that Prime Minister Karamanlis and your government have put in place for this coming Olympics. And the important part of this message is also that while there will be greater investment coming into Greece in this period, it won’t stop there. We hope that the torch does not blow out shortly thereafter. This is a great opportunity. It is a great opportunity not only for Greece You could not ask for a better marketing campaign when it comes to working with the business community and attracting foreign direct investment. What the signal would be as you work with the companies coming in, whether it is companies that are putting up tents or whether it is infrastructure, the importance is that you build relationships with the companies, the companies see the value of the region and therefore look at this as not just 11 million people in Greece, they look at it as 130 million people in the Balkan region. So, I believe that the massive infrastructure being built in Greece right now for the games will help to revitalize the region. but it is a great opportunity for the western Balkan region.We at the Department of Commerce are doing everything we can not only for the Olympics but in the future for opening new markets for U.S.Greece and throughout southeast Europe. Actually that is where my role comes in, as I spend a great deal of time working individually and bilaterally with the governments and the ministers and the deputy ministers to find ways that we can lower the barriers that will allow more investment to come, that will allow more prosperity and more jobs for the region. American businesses see Greece as an important and safe market for their trade and investment. One thing that I would also highlight and mention is the importance of working very closely with the chamber of commerce, working closely with the business organizations and I say this to the governments and I also say this to the business community because it is important that the business community continues to ask for that relationship and that access. There is something that we do in Washington and we do it very well. I say that as a government employee who used to be a private sector employee. The government has a lot of unintended consequences and that is not something unique to Greece, that is not something unique to Romania, that is something that happens all the time in Washington as well. A lot of unintended consequences. So I surely urge and encourage close cooperation and I think that we in the United States are always questioning ourselves and working to improve; but it is also going to be important not only for Greece but for the region, too, that they have this relationship with Europe as well. goods and services and to address the barriers that American exports and investment face here in
As it was mentioned, in 2002, U.S. companies had invested over $1 billion in Greece. Last year, the export -- the trade back and forth -- was at $1.2 million into Greece and $600 million into United States. While they sound like big wonderful numbers, quite frankly, in my personal assessment, it is not enough, it is not good enough, we are not satisfied with it, we want those numbers to increase. For while Greece is strategically located -- the work force, the education -- more needs to be done. We need to have more trade which is why I really think the Olympics will be a real nice shot in the arm and it will help us to achieve that goal, because again, the relationship right now is not as strong as we would like it to be commercially. The United States sees trade as only one part of a strong relationship. Greece has made many strides in recent years, including improving enforcement of intellectual property rights, as well as one of the things the Prime Minister is paying special attention to -- battling corruption, as well as battling red tapes. We really welcome the new administration and welcome the commitment to fixing these barriers to trade and wish they are successful. We will be working hand in hand to make sure that they accomplish these goals.
Lastly I would like to comment Greece because through hard work and persistence, Greece has also improved its relations with Turkey, and the United States very much appreciates that relationship as well.
U.S. interests in southeast Europe
Let me turn my focus now to southeast Europe and talk about our policy and our strategies for the region in southeast Europe. The United States is heavily committed to promoting economic and commercial development of southeast Europe. Our goal is to see U.S. trade and investment with these countries grow substantially to mutual benefit. However, to accomplish this, significant market reforms must still be implemented as I mentioned. The ones I have already mentioned in so far are corruption, and I would add judicial reforms still need to take place in the region, as well as government procurements.
I am going to single out one country; usually when I single out one country it is negative, but this time, singling out one country is positive for some efforts that have been undertaken in Romania and I have seen it first hand dealing with the information and technology ministry and the tremendous efforts they have made to work on the issue of transparency. They have implemented a government e-procurement program, which has allowed the government of Romania to put out its government tenders and bids electronically through the Internet, through e-mail. It has saved them on average 25% the cost of what it would normally cost them to put out government procurement as well as helped them battle the issue of corruption. Because as you say, it has less fingers in the process, less peoples’ hands in the process. That has been a real accomplishment, a real feather in the cap of the Romanian Government and we applaud those types of efforts.
I also said that the United States can and will help the countries of southeast Europe to address these specific issues and to work with them to encourage and develop programs just like they had with that particular one in Romania. For more than a decade, we have provided significant support to southeast Europe’s economic and democratic development. Tens of millions of dollars of products enter into the United States duty-free each year; that’s what we call our GSP, our Generalized System of Preferences. It is one of the ways we are encouraging imports from the region into the United States and essentially be able to import a lot of their products without any duties. We have also provided significant funding to encourage U.S. companies to launch commercial ventures throughout the region. We have a Commercial Service office here, as well as in throughout the region, we have what’s called a Central and Eastern Europe Business Information Center, which directly works in my particular office which is essentially a business partnership program, helping companies find partners either at the U.S. or within the Balkan region. We have the Export-Import Bank, the Overseas Private Investment Corporation, and the TDA [U.S. Trade and Development Agency]; all have been especially active in the region.
We are also working with our European partners. Sometimes that shocks people when I say that we are working with our European partners to encourage more engagement with the nations of southeast Europe because it really is in both of our interest to see the region really flourish. U.S. trade policy rests on a commitment to open markets under the rule of law. In the short run, it creates growth and raises living standards. In the long run, it serves as the central anchor for peace. That is a very important point as we go through this process. That is why the free trade agreements that were signed by the countries of southeast Europe are especially important. They create the framework for the free flow of goods and services. This is why we also encourage continued trade liberalization and promote greater trade linkages with the United States. Further trade liberalization will help hasten southeast Europe’s full integration into the emerging Europe of the 21st Free trade is an essential part of this program and I am proud to say that trade between the United States and southeast Europe is growing. In 2003, it was over $2 billion, in 2001 it was somewhere around $1.7. Again, not as fast as we would like it to, but the good news is that it is growing. This is an important point as well when you are talking about free trade. If you look at the freest countries of the world, countries that have the most free trade policies, you look at countries like the Netherlands, you look at countries like the United States, and, they are also some of the wealthiest countries in the world that have the most democratic policies in the world. century and the vibrant transatlantic community.
Then if you look at the opposite side, a country like North Korea, a country that I have been to; I have been to the DMZ [Demilitarized Zone] in North Korea. I will share a really quick story of what I saw when I was there. It is the epitome of one of the most un-free countries. They actually have large brick buildings, that don’t have anything inside them, they are just concrete brick buildings with painted windows on them and loud speakers saying “come to North Korea, everything is wonderful here, we want you to come to North Korea.” This goes over the loudspeaker every 10 minutes saying “come to North Korea, it’s a wonderful place.” Well, it’s so wonderful that two thirds of the people are living on less that $2 a day. This is the important point and why the United States has such an important stake in this region; it is the last thing we want any country to do; to fall pray to a North Korean model of being a very closed market economy. So, that’s an important point why we changed focus and why we continue to say ‘trade not aid.’ We do not want it to be a lot of handouts, we want it to be the country’s development, becoming their own liberal and free trade economies.
We fully expect our trade to continue to grow as peace replaces instability and inefficient economies are reformed. This region is participating more fully than ever before in the international trading system. As Romania and Bulgaria can attest, efforts towards membership in the European Union will also help modernize and liberalize the region’s economies. A lot o people ask me this question as well when we go through this process of why does the United States Well, it is very simple. Capital is a coward. I am seeing that from my Secretary, my boss, Secretary Evans who says “capital is a coward.” Capital will only go where it feels safe and secure. That is a very important point because membership in the European Union creates an environment. I also say that in the context that we do not always agree with all the rules and the regulations and some of the policies that are implemented by the European Union, on the whole it is extremely important that the countries do become full members of the European Union because it will create that environment. always support countries going into the European Union?The United States fully supports southeast Europe’s integration into the European Union and the economic reforms that will make this possible. However, we want to ensure that this process as I also mentioned, does not disadvantage U.S. businesses and one of the ways we have seen this disadvantage has been the creation of ‘tariff differentials,’ as we call it, or preferential treatment between the countries in Europe which might have a negative impact on U.S. companies. That is something we have talked about with the Romanians and the Bulgarians, and that is why the U.S. Government is proud that some of our most important companies are actually participating to development in this region and providing jobs, technology transfer, as wells as technical skills; companies like Citibank, Bechtel, Coca Cola, Qualcomm, Procter and Gamble, and U.S. Steel have made this region an important part of their strategy in their overall goals. We at Commerce continue to work to assist more U.S. companies do business in this very important region.
Turkey
Finally, let me just make some very quick comments about Turkey. The United States shares a growing commercial, economic, and political relationship with Turkey. The United States strongly supports Turkey’s pursuit of its aspirations to membership in the European Union and encourages our European friends and allies to work energetically towards beginning EU accession talks with Turkey in December 2004. The United States strongly supports Turkey’s ongoing commitment to political and economic reform, which will benefit the Turkish people and advance Turkey’s long-standing strategic objective of joining with Europe. Turkey has made great progress towards fulfilling the Copenhagen political criteria and it also took a positive position in the initiative to reach a Cyprus settlement. As a secular democracy, Turkey’s continued evolution toward Europe and its eventual membership in the European Union sends a very positive signal for EU relations with the Muslim world. Turkey is an important NATO ally and important trading partner.
Although there is still much to be done, let me conclude by congratulating the southeast Europe countries and their business sectors for their hard work in making this region more open to U.S. and foreign investment.
The United states very much wants to continue its important role in the geopolitical, commercial and trade development of southeast Europe.
Thank you for giving me the honor of speaking at this important event. Thank you.