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British-American Business Council
The Business Secretary makes the case for Britain's membership in the European Union. Originally given at Birmingham. This is the text of the speech as drafted, which may differ slightly from the delivered version.
It’s an honour for me to join you this evening. The British-American Business Council is an important fixture in this country and in the United States – promoting an open trading environment with our respective governments. As you’ll know, the US and the UK are each other’s largest foreign investors – with that investment supporting over a million jobs in each country. Here in the Midlands, where the US is similarly the number one foreign direct investor, the local BABC chapter plays a major role in the regional economy.
I’m also delighted to share this platform with Ralph [Speth], who – with backing from the Tata Group – has turned around the fortunes of Jaguar Land Rover. JLR has created around 9,000 jobs in the UK over the past two years, and is continuing to invest in our auto sector – including its new engine plant in the West Midlands, which the Coalition has supported with a Grant for Business Investment. On a personal note, I value Ralf’s contribution as a member of the Automotive Council, which enables a healthy dialogue between the sector and my department, and has set the benchmark for collaboration between industry and government. This approach is responsible, in part, for international vehicle manufacturers committing £6 billion to projects in the UK over the last two years. That includes investment from US car makers like Ford and GM, and I’ve gained a lot from visits to the USA, when I was able to highlight the strengths of the UK research base and flexible workforce.
EU-US free trade agreement
You won’t be surprised to hear that I fully endorse what Ralph has just said about the significance of a EU-US free trade agreement. This FTA would be the biggest bilateral agreement in the world. The EU and US account for almost half of world GDP and one third of global trade flows. Every day, around €2 billion worth of goods and services are traded bilaterally. So this is a once-in-a-generation opportunity that we should move quickly on while the politics on both sides of the Atlantic are favourable. The Prime Minister’s visit to discuss this issue with President Obama underlines the importance our government attaches to it. Eliminating low tariffs alone could add billions to both our economies. A bolder agreement that addresses non-tariff barriers – including regulations, standards and intellectual property practices – would achieve even more. There are some formidable problems – overcoming vested interests in agriculture, national sensitivities around audio-visual products, growing EU worries about American energy cost competitiveness – but they are surmountable.
The UK, of course, was instrumental in getting the Transatlantic Trade and Investment Partnership off the ground. Now, during the UK’s G8 Presidency, we will be making the strongest possible case for trade liberalisation, and we look forward to launching the FTA negotiations soon. Our aim is to agree the EU mandate in time for the G8 Summit in Northern Ireland, with a view to actual negotiations beginning in early summer.
These efforts, I believe, need to be considered in two contexts. The first is the failure, so far, of multilateral trade talks. A global multilateral agreement involving the big emerging markets is a first, best solution. But we should not let the best be the enemy of the good. With Doha stalled, we need the EU and US to show leadership and prove their commitment to open markets. A successful conclusion, in which we agree on common standards and rules fit for the 21st century – particularly in new and emerging technologies – would be a yardstick for others to follow. I’m particularly keen to make it easier for smaller firms to export – who lack the resources of the multinationals to work around regulatory barriers.
The second context, however, is a more domestic affair. A few weeks ago, we saw UKIP make gains in the council elections. We are talking about 7.5 per cent of the electorate who were expressing dissatisfaction on a variety of issues. But, nonetheless, this vote has been interpreted as an opportunity to revisit the issue of UK membership of the EU. In many ways, this protest vote echoes other outbursts around Europe in the past few years. After a big crisis especially, history tells us that there will often be a populist response – a politics of identity in which emotions are easily excited. Outsiders, foreigners or minorities become scapegoats for a country’s problems and it is possible to make big inroads by offering seductively easy solutions.
Last week, Nigel Lawson became the most prominent figure in UK to recommend exiting the EU – and he since has been joined by other Tory “big beasts” from the past – Lord Lamont and Michael Portillo, and also Labour’s Denis Healey. The band-wagon has now picked up several of my coalition colleagues. But let me deal with the Lawson article. He cited an intolerable regulatory and fiscal burden and attacks on the City, as well as the claim that the EU diverting us from greater prizes in Asia. But the main underlying issue was his belief that the Eurozone had set Europe inexorably on the road to political union, which the UK could not and would not join.
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