Thank you for your introduction Elena and Vice President Lesser, and let me also thank the German Marshall Fund for taking this initiative.

I am grateful for the opportunity to speak to you today.

It is imperative that we make 2021 a landmark year for closer transatlantic relations.

The German Marshall Fund has always been a strong advocate in this respect.

 

Ladies and gentlemen

I grew up in Latvia, during the time when it was occupied by the Soviet Union. Like many people of my generation, this has coloured my viewpoint on life and politics.

My generation saw the contrast between the two global powers of the era.

The USSR was an  authoritarian regime, while the European Community and United States were strong global defenders of freedom, democracy, market based economy and international institutions.

For us, behind the Iron Curtain, being part of the free world seemed like an impossible dream.

We have not forgotten how the transatlantic alliance and the U.S. supported the Baltic States on our way towards freedom.

Today, Latvia and its Baltic neighbours have found our place in the international order, as established and active members of the European Union and NATO.

But we do not forget that democratic values and institutions cannot be taken for granted.

Just look at the situation of our neighbours to the East. They march for democratic ideals, despite severe restrictions on their individual freedoms.

And they hope to be heard. I believe that shared values lead to the strongest possible alliances.

So, by re-affirming our shared values, like the defence of democratic ideals, we can revive the transatlantic bond. Over the last four years, this bond has been weakened.   

But with a new administration in Washington, the European Union is hopeful that the door is opening for a new chapter in transatlantic relations.

These relations, to quote Jean Monnet, will be “built through concrete achievements, creating a de facto solidarity”.

Today, I would like to outline three areas where I believe there is real potential to build these concrete achievements:

  • First, working together for an inclusive recovery from the COVID-19 crisis;
  • Second, forging a coalition of like-minded countries to recast the global trade rulebook;
  • And third, joining forces to address the climate challenge.

 

Ladies and gentlemen

The EU and U.S. should act to ensure that post-pandemic recovery supports our workers, protects their incomes, and creates new opportunities for them to become active participants in tomorrow’s economy.

This recovery must be global, inclusive and sustainable.

But first, we should work together to end the global health crisis. Only when we succeed there can the global economy fully rebound.

Initial economic policy responses have been bold and quick, in both the U.S. and EU. We need to extend support measures for as long as is needed, to protect people and companies. A coordinated approach will be to the benefit of all.

At the same time, our economies are undergoing massive changes to make them climate-neutral and digital. We need to undertake reforms and investments to help this transition.

In Europe, our Next Generation EU recovery programme, combined with a reinforced seven-year budget, gives us a package with financial firepower of €1.82 trillion.

We see many similarities with President Biden’s “Build Back Better” economic plan.

Our thinking is aligning on policy choices that help to green the economy, invest in infrastructure and make it more sustainable. We will also work on social justice and fighting inequalities.

Strong education systems and efforts to reskill workers will be crucial to mitigate the impacts of the coronavirus recession.

President Biden said: “A job is about a lot more than a paycheck – it is about dignity.”

We will have to make sure that, going forward, there are new and better jobs created on both sides of the Atlantic.  

We also need to answer the call of our citizens for fairness in international taxation. Reaching a global consensus-based solution on the taxation of the digital economy will be crucial in this respect.

Trade has a fundamental role to play in our recoveries.

Our economies are very interdependent. The EU and U.S. are each other’s largest trade and investment partner, with trade in goods and services worth over €1 trillion annually.

The EU is the largest supply source for U.S. businesses - but also their largest export market to sell American goods and services.

In return, the EU exports almost twice as much to the U.S. as we do to China.

Our relationship supports tens of millions of jobs on both sides.

We can build on this strong foundation.

This is precisely why we need to put our current trade disputes behind us.

This is a vital first step to create the space we need.

It will help to restore confidence and trust.

It will instantly help our economies.

My second message today is that the EU and the U.S. should join forces to lead a strong coalition of like-minded countries to define the standards and policies of 21st century trade.

This must be done in a way that reflects our joint values.

Trade policy needs to benefit all - firms, workers, consumers and citizens at large. It must not benefit only the few. Let me give one example.

In the data-driven economy and with fast emerging technologies in particular, modern regulations need to meet increased societal demands for transparency and openness.

We share a broad worldview that human ethics should prevail over algorithms.

The digital transformation offers an opportunity to form an alliance of democracies in the digital realm. We therefore propose to establish a high-level Trade and Technology Council.

This will give us a forum to close the transatlantic gap on digital and technological standards, rules, measures and policies. And to shape it globally in a manner that is true to our shared values of open and democratic societies.

Another work strand for such a coalition would be working together to fight forced labour and child labour across the globe. We know that the U.S. is already working intensively on these issues.

My third proposal is for the EU and U.S. to lead the way on climate action.

We warmly welcome the decision of the Biden administration to rejoin the Paris Climate Agreement.

Of course, many prominent Americans continued to carry the climate flag over the past four years.   

I had the pleasure to work hand in hand with Michael Bloomberg on a sustainable finance initiative, designed to incentivize the flow of private capital to planet-friendly projects. As you know, the EU is set to achieve climate-neutrality by 2050.

A similar commitment by the US would make about two thirds of the global economy greener.  It would cut more than a half of the world’s emissions.

Such global leadership would encourage others to follow. 

For this, we should align our policies on green, circular, competitive and inclusive economies.

Getting there will require investment, innovation and the right price signals.

So we should work together on emission trading, carbon pricing and taxation.

And we have both expressed a willingness to tackle carbon leakage - the EU notably plans to propose a carbon border adjustment mechanism, in full respect of WTO rules.

A wider transatlantic green trade agenda could include a Trade and Climate initiative within the WTO. Making it easier to trade climate friendly goods and services could give renewed relevance to the organisation.   

We can also work in the WTO to make fisheries more sustainable, to reduce the scourge of plastic pollution, and to allow trade to become a catalyst for innovation, including in the circular economy.

Another area where we could work together is in the area of green finance. The EU has good experience from designing its taxonomy – or green classification – system of economic activities that contribute to mitigating or averting climate change. This is the first of its kind in the world.

As major financial hubs and regulators, the EU and U.S. are best placed to set the standards and to generate the vast amounts of private investment needed to transform economies.

I accordingly invite the U.S. to join the International Platform for Sustainable Finance.

 

Ladies and gentlemen

For these three ideas to move forward, there is an additional step we need to take. We urgently need an updated multilateral rulebook and functioning structures at the World Trade Organisation.

In a few weeks’ time, I will table a detailed EU agenda for WTO reform.

Twenty five years after its birth, the WTO needs a fresh look, and a fresh start.

It needs new ways of working together, to reflect the world we live in today.

Our reform ideas are pitched to the membership of the WTO as a whole, but also as a genuine offer to the U.S. to join us in updating an organization that we did so much to build.

Agreeing on the selection of WTO Director General would be a first important step, before we move on to the bigger reform agenda.

We could then develop up-to-date rules and disciplines to tackle new economic balances in the global trading system, including those caused by state-led economic models.

We can work together to make trade greener and fairer.

We can look at how to reform dispute settlement system to serve the membership in positively resolving trade disputes.

Of course, WTO reform is also an essential strand in our approach to dealing with China.

The EU and U.S. have many converging interests in this respect and it is in our strong mutual interest to work together.

 

To conclude, ladies and gentlemen:

The EU wants to turn a new page with the United States.

At this moment in history, when the world has been shaken by the pandemic and major geopolitical shifts, it is imperative that we get back to working together.

The EU has already reached out to the Biden Administration with our December Communication for a new transatlantic agenda, and we are keeping lines of communication to Washington open.

It is no exaggeration to say that the world is depending on us. And for our future place in the world, we depend on each other. 

In my view, any challenge we face will benefit from transatlantic leadership, and any solution proposed will be stronger with our joint support.

In conclusion, Europe is reaching out to the United States with a clear message: we want to build back better, together. Thank you.