Speech at the Berkeley University, June 12. 2006. ''Partnership in a globalized world: A declaration of interdependence''

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Vice-chancellor, dear students, ladies and gentlemen,

It is an honour and a privilege to speak at this prestigious university. Thank you for inviting me. And a special thanks to director John Zysman from Berkeley Roundtable on the International Economy (BRIE) and director Shanlar Sastry from CITRIS (Center for Information Technology in the Interest of Society) for arranging this event.

I have been looking very much forward to this visit. I am very happy that close relations have been established between UC Berkeley and University of Copenhagen.

Globalization brings new opportunities and challenges for governments, companies and citizens throughout the world. Political, economic and cultural ties across borders are maturing and becoming stronger. The world is becoming more open.

Globalization holds opportunities to increase prosperity, to ensure better jobs and to take active part in international developments. As students at this advanced university you are at the very edge in formulating strategies that make it possible to benefit from globalization.

There are some who look at globalization as a threat. They look at the impressive growth rates of China and India and worry about outsourcing of jobs. They look at the rapid exchange of people, goods and services as a threat to the world they know. They question whether we can preserve our national identity and way of life. There are even some, who believe in resurrecting trade barriers and working to maintain status quo.

I believe they take the wrong approach. Globalization is a fact and we have to embrace it by going on the offensive both nationally and through international cooperation.

Nationally, each country has to prepare itself for the global competition. Thus, my government recently launched a comprehensive strategy to prepare Denmark for the future. The aim is to maintain Denmark’s position as one of the world’s richest countries, but without destroying the social fabric. We want to avoid a fragmented society, where those who are not equipped for the labour market of the future fall by the wayside.

The aim of the strategy is to achieve the combination of competitive power and strong cohesion that is at the very core of The Danish Model. We must continue to put people first and to develop the quality of our human resources. It entails extensive reforms of education and training, research and entrepreneurship as well as substantial improvements in the framework conditions for growth and innovation in all areas of society. Copies of the strategy on preparing for globalization are available in the room.

International action is needed to allow us to benefit fully from the opportunities that emanates from globalization as well as to cope with the challenges and threats that characterize a globalized world. I will make the argument that such international action is contingent on close cooperation between Europe and the United States. A strong Transatlantic Partnership.

Interdependence

Ladies and Gentlemen, first on interdependence.

Globalization has brought all countries closer together, but no one closer than the United States and Europe. We have built our societies based on shared respect for freedom, democracy, human rights and the rule of law. We share common values. Our values are the main driving force behind globalization.

At the same time, these very values are being challenged by forces that do not want free, open and democratic societies, let alone the rule of law. But even in the face of these challenges we are united in our continued defence of our common values and our determined promotion of these values globally.

We share more than ideas and values across the Atlantic: Our economies are far more interdependent than those of any other part of the world. The EU and the United States are each other’s main trading partners. Even more significant the level of mutual investment is the highest between two major economies.

On the political side the North Atlantic Treaty has been the pivot of transatlantic security. The Alliance itself is the embodiment of the undivided security that has been evident for more than half a century. Together, we managed to put an end to Communism, to unite a Europe divided by the Berlin wall and to bring peace in the Balkans, where ethnic conflicts followed the end of the Cold War.

The facts speak for themselves. The United States and Europe are strongly interdependent. The big question then is how do we act on this interdependence?

In 1962, President Kennedy called for a Declaration of Interdependence. The background for his speech was the very early stages of European integration that was envisioned as a first step towards a United States of Europe. Well, we didn’t exactly make it that far in Europe, but I find it illuminating to recapture what President Kennedy envisioned as the outcome of closer cooperation with a unified Europe. In his words:

“Acting on our own, by ourselves, we cannot establish justice throughout the world; we cannot insure its domestic tranquility, or provide for its common defense, or promote its general welfare, or secure the blessings of liberty to ourselves and our posterity. But joined with other free nations, we can do all this and more. We can assist the developing nations to throw off the yoke of poverty. We can balance our worldwide trade and payments at the highest possible level of growth. We can mount a deterrent powerful enough to deter any aggression. And ultimately we can help to achieve a world of law and free choice, banishing the world of war and coercion.”

And he continued:

“For the Atlantic partnership of which I speak would not look inward only, preoccupied with its own welfare and advancement. It must look outward to cooperate with all nations in meeting their common concern. It would serve as a nucleus for the eventual union of all free men - those who are now free and those who are vowing that some day they will be free”.

This was a vision presented 44 years ago, but I believe that the very premise of the vision still holds true. A Transatlantic Partnership should not be inward looking. Instead, while working towards strengthened cooperation within the Euro-Atlantic area, the main object of a Transatlantic Partnership should be a joint approach to the global issues outside the Euro-Atlantic area. That is my vision of a Transatlantic Partnership for the 21st century.

Common possibilities, challenges and threats

I see four key areas for transatlantic cooperation where we should focus our efforts on concrete initiatives:

• Firstly, the creation of a Transatlantic Marketplace, which will not only benefit the transatlantic economy but the world economy as such.
• Secondly, the reform of the North Atlantic Alliance to meet the new security challenges.
• Thirdly, the support of reform and progress in the Broader Middle East.
• Finally, sustainable development, which would include both joint efforts to combat poverty especially in Africa and efforts to ensure the supply of energy.

First, the vision of a Transatlantic Marketplace without barriers to trade and investment. It is true that much of the discussion today is focussed on emerging economies such as China and India. They do have impressive growth rates. They have achieved significant economic results. They are becoming important players in the global economy and competitors to both the EU and the United States.

However, let us not forget that the EU and the United States are responsible for two fifths of world trade. We are each other's largest trading and investment partners.

The overall 'transatlantic workforce' is estimated at 12 to 14 million, of which roughly half are Americans who owe their jobs directly or indirectly to EU companies. In fact, I am pleased that a number of executives from Danish companies working in California are accompanying me today. It is also worth noting that 85 per cent of US global investments in professional, scientific and technical services are placed in the EU.

Achieving the vision of a Transatlantic Marketplace will of course take time. Within Europe we have spent the last 50 years building an internal market. The elimination of barriers to trade has at times been difficult and is the result of a determined effort and strong political resolve.

It has been a gradual approach. Today, we have free movement of goods in Europe. We have liberalized financial services. And a few weeks ago we agreed on the liberalisation of services in general.

Some countries have been hesitant to give up what they perceived as legitimate national interests. But today we see the results. Since 1992 the internal market has created more than 21⁄2 million new jobs in Europe and added more than 800 billion euros to European wealth.

It is my hope that we together can make the same determined political effort to create a Transatlantic Marketplace – the largest in the world - where we can benefit from developing the transatlantic economic integration to the fullest, spur innovation and job creation, and realise the full competitive potential of our economies and companies.

Our economic and trade relations affect not only our own prosperity and development, but also that of third countries and regions. We have a responsibility to contribute effectively to international economic stability and growth and to broaden our bilateral economic dialogue. Together with partners first and foremost in Asia and Latin America we can make globalization work for all.

A Transatlantic Marketplace is not an exclusive club for the rich countries. It will benefit all.

I do believe that the creation of a Transatlantic Marketplace could be a powerful driving force in our endeavours to liberalize the world trade in general. And it should of course be combined with a determined effort to make the WTO negotiations a success.

Secondly, the reform of the North Atlantic Alliance to meet the new security threats. Terrorism, weapons of mass destruction, fragile states – and not least the nexus between them – have become greater threats in today’s globalized world.

For instance terrorists use and misuse the very means of globalization: the media, information technology, the Internet and the mobility of people and goods. And threats to our security more often than not originate in countries and regions far away from the Euro-Atlantic area.

But these issues are very different from the circumstances that lead to the foundation of NATO in 1949. NATO is a true child of the cold war. For half a century a shared concern for a military threat to European security was at the heart of the transatlantic agenda. Today, the old transatlantic agenda that focussed on European security has largely played out.

The fact that the role of the Alliance has not been played out demonstrates its ability to adapt to the new threats to security. In this new security environment many expected NATO to stagnate. Instead it stood up to the plate becoming what it is today - a very flexible and effective instrument for promoting stability in the world. But the Alliance still needs to continue its development.

NATO should be capable of engaging wherever and whenever needed. The operations in Afghanistan and Sudan are the most striking examples of this. But also NATO’s support to Pakistan in the wake of the earthquake and even NATO’s support to the United States after hurricane Katrina bears witness to the global nature of NATO. That is why I support an Alliance engaged in global partnerships with countries like Australia, New Zealand and Japan that can and are willing to defend our common values.

Likewise, NATO must develop its capabilities to win the peace once we have won the war. For some time it was fashion to portray the United States as the hard power being over-reliant on military force and the Europeans as the soft power being hesitant to deploy its armed forces outside Europe. Maybe the stereotypes were not completely false, but today there is a strong mutual understanding for the need of both hard and soft power to solve the most complex security challenges of today, namely terrorism.

In order to win the peace, we must improve our ability and capability in nation-building. That is why the Alliance should further develop the concept of civil-military cooperation. That is why the alliance should work much closer together with other international organisations and NGO’s. Only by using all the instruments available to us will we be able to solve daunting tasks like Afghanistan.

The third key area of transatlantic cooperation is the broader Middle East.

Globalization has the potential not only to stimulate economic development but also to strengthen individual freedom. Modern information and communication technology expands people’s opportunities to share ideas and acquire knowledge. The mobility of people allows for networking and broadening of horizons.

Nevertheless, there are still strong obstacles standing in the way of such a development in the Middle East, and the result is an acute deficit of freedom. Combined with economic stagnation and rapid demographic changes it is a source of frustration that can play into the hand of extremists and terrorists. Therefore, we share a common interest to make the peoples of the Middle East benefit from globalization.

And indeed, the desire for change and democracy is widespread throughout the Middle East – as also the recent elections in Iraq demonstrated. Distinguished experts from the region have set out to analyze why there is such a lack of progress in the Middle East. They present their analysis in the UNDP’s “Arab Human Development Reports”, which demonstrate the profound need for reform in the region.

Both Europe and the United States have a strong interest in supporting this quest for reform and progress in the broader Middle East. I see three areas where we need to focus:

• Firstly, on promotion of freedom and democracy,
• Secondly, on free trade and
• Thirdly, on regional cooperation

First on freedom and democracy. According to the Arab Human Development Report the political restrictions on development are the most stubborn. They point to three major deficits concerning:

The point is that the people in the region themselves want to address those deficits. All surveys show that the people in the Arab world favour democracy and human rights. Actually, when compared to other regions the Arab world tops the list of those agreeing that “democracy is better than any other form of governance”. So there is a strong desire for change, and Europe and the United States should continue their efforts to support the moderate forces that strive for reforms.

Denmark has launched a “Program for Progress and Reform” in the Arab world. In this program, Denmark offers partnership and cooperation on specific reform processes aimed at reducing the three deficits in dialogue with recipients, primarily in the civil society. Recent events involving Denmark, burning flags and embassies and violent protest have served to strengthen our conviction and resolve in this regard.

Secondly, on free trade. The Middle East economies are to a high degree detached from the global economy, and the result in recent years has been slow economic growth. That combined with growing populations have led to unemployment and poverty in the region.

Europe and the United States have a strong role to play in opening up to trade with the Middle East. The European Union has already signed association treaties removing barriers to trade with a number of the countries in the region.

Thirdly, on regional cooperation. The Middle East is one of few regions that does not have an organizational framework for regional cooperation. This has a negative impact on the region in relation to economic development, security and the environment. It also has a negative impact on the world outside the region, especially in relation to security and stability.

I strongly believe that the transatlantic experience and cooperation should help facilitate a process towards stronger regional cooperation.

In Europe we learned the hard way that lack of confidence in your neighbour leads to instability, conflict and even war. Therefore, together with the United States, we launched a process of building confidence between countries and peoples – the so called Conference on Security Cooperation in Europe (CSCE). Similarly, I think we need a Conference on Security Cooperation in the Middle East.

Together with Canada, Denmark is promoting an initiative aimed at enhancing Middle Eastern security cooperation. It has strong participation – so far on an informal basis – from all the major players in the region. I am confident that this process in the future can move to the formal, intergovernmental level, although some governments are still sceptic.

It takes time to overcome decades of mistrust and lack of confidence in your neighbours. But I think that the current situation with Iran’s nuclear program may remind responsible leaders in the region of the dire prospects for peace and stability, if you do not establish regional and international cooperation to counter such threats to stability.

Sustainable development

The final key area of cooperation is the challenge to ensure sustainable development.

Let me first turn to Africa. Last year I travelled to Africa. I saw the poverty. I saw the victims of HIV/Aids. But I also saw something else. I saw the will and the determination of ordinary Africans and that of key African leaders to change this to the better.

Earlier this year I met with a number of prominent African leaders in Copenhagen. Again, I was reinforced in my belief that Africa is not a continent lost. It is a continent on the brink of a new beginning. Indeed, Africa is ready to move forward and become an active player in the globalized world. However, Africa needs assistance from both the EU and the United States.

Globalization can give Africa opportunities for progress and growth, but focused action is called for. The most important of all is greater international trade. Often the focus is on giving the poor countries access to our markets, and indeed we must. That is why we need a global agreement in the WTO-negotiations.

But first and foremost the developing countries need to open their markets to each other by removing the tariff and trade barriers separating them. In Africa, there are high tariff rates, requirements for import licences, protracted customs handling and complicated procedures.

There is a lot to be gained if the developing countries open up their economies and promote free trade among each other. According to the World Bank, the developing countries will be able to gain approximately USD 142 billion by implementing full liberalisation of international agricultural trade. By far the largest share of this gain, approximately USD 114 billion, may be achieved through reforms in the developing countries themselves.

In our approach to Africa we should bear in mind that we are not only assisting. We are investing in what could soon be a dynamic African market. And like Asia before it – an important part of the global market. Those investments should be directed at the very infrastructures necessary to promote free trade and sustainable development in the region.

Let me turn to another topical element dealing with sustainable development: Energy.

Both the United States and Europe are for different reasons facing the challenge of reducing our dependency on fossil fuels. 1) Because it is becoming too expensive, 2) To reduce our dependency on foreign suppliers, 3) In order to effectively reduce climate change.

The challenge poses the question whether or not it is possible to combine economic growth and the use of alternative energy sources. In fact the Danish experience shows that a clear focus on renewable energy need not be to the detriment of economic growth. Taught by the experiences of the oil crises of the 1970s Denmark has for decades focused on measures to increase the use of renewable energy and to increase energy efficiency. During the last 25 years Denmark’s economy has grown by more than 50% - without any increase in the consumption of energy. And at the same time many international benchmarks rank Denmark as one of the most competitive countries globally.

This has not been achieved overnight. It is a result of a massive effort focussing on a wide range of initiatives – regulatory as well as tax-related. Today, Denmark is in the forefront on many of these issues: 21 percent of all electric power consumed in Denmark is produced by windmills. Bio-energy now composes 11 percent of total energy consumption. Later today, I will visit some of the Danish companies that are active here in California.

The United States and Europe must cooperate closely on the energy dossier. Let me point to three possible areas for cooperation:

• Firstly, the development of new energy technologies. We are already cooperating on the development of environmental technologies, most importantly in a project to develop fusion energy. But we should go even further.
• Secondly, we should work to increase the use of alternative sources of energy. We should develop and use cost effective wind energy, bio-energy and solar-energy.
• Thirdly, we must do more in relation to energy-efficiency.

* * *

Ladies and Gentlemen,

I have outlined my vision of a Transatlantic Partnership for the 21st century and pointed out four key areas for strengthened cooperation.

I started out quoting President Kennedy. He was not only right to point out the need for a Transatlantic Partnership that was outward looking. He was also right to point out the need for strong European cooperation to allow for such a partnership with the United States.

There is a need for a strengthened Transatlantic Partnership to ensure prosperity and security in a globalized world.

The challenges we are facing in the globalized world are demanding. However, by facing them together and by sharing a common responsibility we can take advantage of the opportunities provided by globalization. We can make globalization a success to the benefit of all peoples in the world.

Thank you.