Transcript from the September 24, the Atlantic Council event which featured UK Deputy Prime Minister Nick Clegg, and Senators Chris Murphy (D-CT), and Ron Johnson (R-WI) for an in-depth conversation about the economic and geostrategic benefits on offer from an ambitious Transatlantic Trade and Investment Partnership (TTIP).

The event launched a report—TTIP and the Fifty States: Jobs and Growth from Coast to Coast—written in partnership with the British Embassy in Washington and the Bertelsmann Foundation. As the report emphasizes, each of the fifty US states stands to gain significantly should TTIP be successfully negotiated and implemented. Across the United States, almost 750,000 jobs would be added to the economy, due to increased trade with Europe alone. Each state would also send 33 percent more exports to the EU annually, on average. Importantly, TTIP is also a key driver of future wealth—as each American family is estimated to gain an additional $865 annually due to the lower costs of goods and increased wages associated with export jobs.

FREDERICK KEMPE: Good afternoon and welcome, everyone. I’m Fred Kempe, president and CEO of the Atlantic Council. And let me take this opportunity to welcome you all to the Atlantic Council’s new home, our new headquarters. We’re very happy to be here because, as you know from our old headquarters, you wouldn’t have all fit. And so we’re really delighted.

Deputy Prime Minister Clegg has just broken up a meeting with the vice president. He’s on his way. We thought we’d get started, and he’ll be here in just a couple of minutes to use all of your time most effectively. We are excited to be launching a new report today with the help of our good friends at the British Embassy in Washington and the Bertelsmann Foundation. Ambassador Westmacott will be here as well with the deputy prime minister. That’s been a terrific cooperation.

With the launch of the Trans-Atlantic Trade and Investment Partnership talks this summer, we have, in our view, the Atlantic Council, the best chance we’ve had perhaps ever to better integrate the American and European economies.

Mike Froman, the U.S. trade representative, was here last night in an off-the-record conversation with our – at our annual board dinner. And he reminded us that the first chairman of the Atlantic Council, Christian Herter, back in the early ’60s also was the first USTR, although it was called something else then. And he looked after the Kennedy round, when there were high hopes for just this kind of an agreement.

If you go back and read John F. Kennedy’s speech – President Kennedy’s speech at the Paul’s Church the day before his very famous “Ich bin ein Berliner” speech, it was all about turning NATO into also an economic relationship, what Boyden Gray on our board has called an economic NATO.

He said, quote from John F. Kennedy, “Our partnership is not military alone. Economic unity is also imperative, not only among the nations of Europe but across the wide Atlantic.” And then he talked about Africa, Asia, Latin America, by opening our markets to the developing countries, by stabilizing basic prices, we can help assure them of a favorable climate for freedom and growth. So he was talking about a trans-Atlantic deal as a global platform even at that time.

And as Mike Froman said to us last night, it’s not that this is a new idea. There have always been obstacles. The question is can we overcome them this time?

But we at the Atlantic Council also think of TTIP as far more than a traditional fair trade agreement. This is a pivotal strategic opportunity to revitalize the trans-Atlantic relationship at a global inflexion point. By revitalizing the world’s two largest economies, the EU and the U.S., we can powerfully demonstrate to the world that a system based on strong protections of intellectual property, labor and environmental rights, rule of law can still succeed and serve as a model for others to aspire to.

So today we’re releasing a report we’ve titled “TTIP and the Fifty States: Jobs and Growth from Coast to Coast.” My good friend and colleague and Atlantic Council board member, who runs the Bertelsmann Foundation here, will go over the key findings momentarily.

But I just want to underscore a couple of points that are key to me. One of them is that every state wins, both in terms of jobs and increased exports. Second, TTIP could add 750,000 jobs to the U.S. economy, the entire working population of New Hampshire and West Virginia. And that doesn’t take into account anticipated benefits of European investment in the United States.

Clearly, an ambitious TTIP is a project well worth fighting for, even though many trans-Atlantic arguments are well known and well entrenched.

I’ll hold off welcoming the deputy prime minister and the ambassador, but I will give a very warm welcome to the chair and ranking members of the Senate Foreign Relations Europe Subcommittee, Senators Chris Murphy and Ron Johnson. We’re greatly looking forward to your comments.

I’m also happy that Ambassador Stu Eizenstat is here with us, former U.S. trade representative, former ambassador to Brussels, the EU, a founding member of the Atlantic Council’s new TTIP Steering Committee and a member of the Atlantic Council’s executive committee of the board. And he will be moderating the conversation and introducing the speakers.

So thanks again to everyone for being here. And, at this point, it’s my honor to turn the floor over to Annette to review the findings.

ANNETTE HEUSER: Thank you. (Applause.) Thank you so much, Fred. You’ve already actually done my job so you can see how our working relationship looks like. Fred is always one step ahead but we are European.

So, Fred, thank you so much. Dear Senator Murphy, dear Senator Johnson, dear guests, a warm welcome also from my side.

It’s a pleasure for me to present today the outcome of our “TTIP and the Fifty States” study from coast to coast to you. This study is the result of a truly trans-Atlantic cooperation that included the Atlantic Council, the British Embassy, of course, and the trade partnership. And please see the fact that the partners had trust in me, a German, to present the results for the U.S. here as a sign for the overall positive spirit, trans-Atlantic spirit when it comes to TTIP.

Our report had one clear objective: we wanted to present the first comprehensive study to explore the impact that TTIP has on all the 50 states and also take a closer look at specific sectors. When we started our study, we said we wanted to take an ambitious scenario as the basis for our predictions and our assumptions. So what does that mean?

An ambitious scenario means that we assume that we will eliminate all tariffs and that we will see a 25 percent reduction in costs associated with non-tariff barriers to trade. And thirdly, and this is also very important, that we expect a 50 percent reduction in procurement barriers.

So based on these main assumptions, the key findings of our study are that all states – and I think this is very remarkable – all states will gain jobs and increase their exports, all 50 states. And, second, on average, the annual exports to Europe will jump 33 percent per state. I think this is also a very remarkable finding here.

Thirdly, we overall expect that TTIP will relate – and TTIP related jobs in the U.S. will be increased by 740,000. That means that one new TTIP related job is generated for every 160 in existence already. So, basically, as Fred has already said, we are adding a workforce the size of that in West Virginia or New Hampshire here.

And the last key finding that we found very interesting is that TTIP-related job growth will be the highest in the services sector. And to be more precise, 40 states out of 50 will benefit the most from the increase in the business services sector.

As mentioned before, the average annual exports to Europe will increase by 33 percent so all states will increase their exports but on different levels. While trade and services with the EU already compromises a large percentage of trade for most states in trading goods, trade in goods will benefit more from an ambitious TTIP in our point of view.

Advanced manufacturing, particularly in the motor vehicle industry will be affected positively. The motor vehicle sector is a top sector for 19 states based on our findings. And the largest increase when it comes to the motor vehicle sector based on our study, we will see in three states: Michigan, Alabama, and South Carolina. And one of the reasons why the motor vehicle sector is benefiting and will benefit so much from an integrated TTIP approach is that the sector is already highly integrated in the supply chain of the motor vehicle sector.

And these findings also provide evidence (why ?) the motor vehicle sector industry is so invested in TTIP from our point of view. And, to a certain extent, you can say that the motor vehicle sector industry has set the gold standard for creating a trans-Atlantic consensus on the regulatory coherence they want to achieve.

It’s not a surprise I think that those states will gain the most when it comes to jobs that are the largest economies in the U.S. So the top five states in our study that are expected to gain in terms of absolute numbers of jobs are California, Texas, New York, Florida and Pennsylvania. For California alone, we estimated that the TTIP-related job increase will be 75,000 new jobs. It is also interesting to see that in all these five jobs, the business services sector will increase the most.

But these figures don’t tell the entire story because some of the states will experience the highest gains in their jobs markets are smaller, like Nevada, for instance, Maine, Montana, and West Virginia. The proportionate impact on their job market is actually bigger than those of the big states, such as California.

It’s important to realize that regardless if you take the net jobs growth for big states or look at the smaller states and how much their job increase will be based on TTIP, in principle TTIP-related jobs have two major sources.

The first I think is obvious. It’s the direct impact on the labor market, which means greater exports lead to greater jobs in the sector to meet demand. And the second source I would say is less intuitive here. It’s the indirect impact on the labor market. It’s obvious that households, firms and governments have more to spend because of increased prosperity that leads to gains in jobs.

So these are in a nutshell the overall findings of our TTIP study. And in the report that I think everybody has already received before coming into this conference room, you can see where each and every of the 50 states are standing in their relationship to the EU right now and what the impact on these states will be once TTIP is fully implemented.

So besides the fact that we are always stressing in Europe as well as here in the U.S., the importance – the strategic importance that TTIP has for the Europeans and Americans, we wanted to demonstrate with this study the Main Street effects that TTIP has on each and every state here in the U.S., from Montana to North Carolina. Our study shows clearly that the integration dividend that TTIP provides for the U.S. is enormous. And we believe the numbers that we have presented in our report speak for themselves.

So I want to conclude here because we need to have time for our debate. And I have the honor and pleasure to give the floor right now to no one else than Ambassador Stuart Eizenstat, who will introduce the deputy prime minister. Thank you so much. (Applause.)

STUART EIZENSTAT: Thank you very much, Annette. And thank you for the Bertelsmann Foundation’s study.

The TTIP negotiations are, without question, the most ambitious trade negotiation ever launched, including the multilateral rounds going back to the Kennedy round, the Uruguay round, and the Doha round. They cover a remarkable panoply of issues: industrial tariffs, agriculture, phyto and pshytosanitary services, workforce issues, intellectual property, data privacy, regulatory convergence and much more. And, therefore, the opportunity for a payoff is also greatest.

Annette’s study adds – and that of the Atlantic Council – a tremendous body of information that I hope will help build public and congressional support for this. And it couldn’t come at a more important time. We have subpar growth on both sides of the Atlantic, very small growth in the U.S. compared to what we normally would expect after a great recession, and almost no growth in the EU countries. But even here, if you take the last August jobs figures, it would take to 2021 to recover the number of jobs we lost in the Great Recession.

TTIP provides a deficit-free stimulus which can add up to 1 percent of GDP on both sides of the Atlantic. And there’s one last advantage, and that is strategic. There are essentially two models for governance in the 21st century. There’s the Chinese autocratic state-controlled capitalist model and there’s the European and U.S. free market democratic model. It is absolutely essential, and these negotiations will be crucial, to show our own people and to show the people of the world that the great democracies can produce and deliver for their people. So there’s a great deal riding on it.

And we could have no better person start this discussion off with that perspective than the deputy prime minister of the United Kingdom, Nick Clegg. And that is because he has experience in the European Union, having been a member of the European Parliament, with whom I interacted with during my days – he’s much more influential now – and as deputy prime minister, and, of course, a member of the U.K. Parliament representing a major district.

And what’s, I think, important and significantly due to his leadership is that when this coalition government was formed several years ago, there were real doubts about the stability. It was breaking new ground in the U.K., which had been used to one-party majority rule. And because of the cooperation of the deputy prime minister with the prime minister and his own vision and leadership, this has been a remarkably stable coalition during an extremely difficult time. And I think those of us who always look to the U.K., Mr. Deputy Prime Minister, with great admiration, we have great admiration for you and the leadership you’ve shown in this coalition.

He’s responsible in his position for implementing the government’s strategy to increase social stability, to oversee the drive to rebalance the economy, to lead the government’s political and constitutional reform agenda. And he has been the key link with the EU. We’re also very proud to have Ambassador Westmacott, who is a great ambassador. And, Peter, it’s always great to have you here. Thank you very much.

So with no further ado, Mr. Deputy Prime Minister. Thank you. (Applause.)

NICHOLAS CLEGG: Thank you very much. Stu, thank you very, very much for that generous introduction and thank you for being here, all of you. I’m sorry I arrived a few minutes late. I’m very, very grateful to the Atlantic Council and, of course, to the Bertelsmann Institute for the work on this report, which I think is a very, very compelling read and it’s been, obviously, very well put together.

I think the first question I would pose is why on earth do we want to do this all over again given the fairly convoluted history of agonizingly long trade negotiations? The Uruguay round took – what – eight years, was it? The Doha round has been going on for 12 years. It’s not even concluded. I remember when I was – Stu referred to – working in a sort of pre-political age – that is the way I describe my own history – I worked as a trade negotiator. I remember when we floated the idea then of a TTIP – I think the acronym was different at that time – it immediately provoked huge controversy which sunk the whole thing. We’ve had trade negotiations, which gets into the impenetrable detail about the phytosanitary standards of chlorinated chicken and other thrilling issues. Why on earth would we want to do this all over again?

And I have really three answers to that. One is the most obvious one, which is the economic case. As we seek to rebalance our economies from the huge shocks that they have endured in recent years because of the cardiac arrest that occurred at the very heart of our financial systems, we all need to make sure that we rebalance our economies away from overreliance on overleveraged financial models and overreliance on private and public sector debt towards investment and export-led growth. That is something that is essential to the United States as it is to the smaller states within the European Union.

That is a huge turning of the page, if you like, on an unbalanced approach to economic growth which hit the buffers in the most melodramatic and damaging fashion back in 2008 towards something which is more sustainable, more balanced, and have a much more heavily dependent and export oriented growth. So it is an absolute economic necessity that we try and capture the huge potential of further trade liberalization between our two continents can unleash.

The second one is a slightly more subtle political reason. And it is this: in the wake of the great crash of 2008, there has been a rise in various political movements, and they take on different names, different acronyms, different labels, different – they’re led by different leaders. They come from the right and they come from the left, but they are all distinguished by a rise in political insularity, a pulling up of the draw bridge, a wish to turn our back on the complexities, the dilemmas of the modern world.

It is a – it is – as night follows day, when economic and social insecurity is – abounds, there is often – and we’ve seen this in our political history on many, many previous occasions, and it is now only repeating itself in a fairly familiar fashion – there is often a resort to insularity, to introversion and to isolationism, all of which I think, again, our history has shown are – do not serve the common interests, or the national interest and the international interests in the long run. This undertaking of TTIP would be the most dramatic answer to those siren voices of isolationism that we see on both sides of the – of the Atlantic.

And the third is the geostrategic case that Stu put so well. There is a fashionable view that the center of power, of influence and economic dynamism has long past the old world behind – has long left the old world behind – that the kind of Atlantic community of the United States and the European Union is a community rooted in the past and rooted in a nostalgic yesteryear and that the future is in different hemispheres, different parts of the world, different technologies which are no longer the province, are no longer the monopoly of the old world.

I think that has always been a very pessimistic view of what we are capable of in the Atlantic community. After all, our two – our two economies, the European and American economy still represent around half of the world’s GDP, and trade between the European Union and the United States represents around a third of total global trade. And I think it would be a counsel of despair to somehow suggest that we cannot do better, go further and faster in creating greater prosperity in our two hemispheres, in our two continents. And I think it would be a very powerful refuting of that pessimism that believes that growth and prosperity is only going to be located in other hemispheres in the future.

The U.K. government, for all those reasons and indeed for self-interested reasons, we estimate that the benefits of TTIP, of a comprehensive deal, would be around two billion pounds a year for our national economy. But for all of those reasons and for reasons of economic self-interest, we across the coalition government – and I would suggest across all parties in Westminster – are very, very supportive of TTIP indeed and are keen to invest all the necessary time and political energy to make it a reality.

But the report we have before us today is, of course, about the benefits to the states and the states of the United States and we will hear about more of that later. But I think the fact that the report has set out so cogently, this deal creates, well, about the equivalent of the working population of West Virginia, around 740,000 new jobs, putting an extra $865 in the pockets of the average American family every year is compelling reason enough why, if there are any doubts of the virtues of this deal, that those doubts should not be dwelt upon.

I’ve just come from a meeting with the vice president, who reminded me that it was Tip O’Neill who said that all politics is local. And as someone who, as you know, in the constituency system of the United Kingdom, as someone who spends as much time as I do serving my constituents in the southwest of the great city of Sheffield, I can certainly testify to the wisdom of that saying. All politics is indeed local. And that is why I think the way in which the case is being made in this report state by state is so compelling. Unless we’re able to make the case locally, we’re certainly not going to be able to make the case multi-nationally. And I think this report really does provide the intellectual building blocks to make that political case.

So that’s why we need all of us, I think, to get behind this deal. I think this report provides further ammunition to do so. It’s also why we need all of you to get behind this deal and put pressure on us politicians and the expert trade negotiators to turn the aspiration of TTIP into a once-in-a-generation opportunity to entrench prosperity, create jobs, and instill greater dynamism in both the United States and European Union economies. It’s a huge opportunity. I think it’s now for us to step up to the plate and grab it.

Thank you very, very much. (Applause.)

MR. EIZENSTAT: Thank you for those really inspiring words. As I introduce our two senators, let me add one other point. And that is those of us who have fought these wars – and Ambassador Boyden Gray is one of my successors – have the scars to show the fights that we’ve had constantly with the EU over standards. If we can agree on common standards for major products, they will become the global standards. They will enable our companies on both sides of the Atlantic to be infinitely more competitive. And I can assure you that if the EU and the U.S. agree to a common set of standards on products, they – (audio break) – global standards to our great advantage.

It’s a really particular pleasure and quite unique opportunity to have both the chair and the ranking member of the European Subcommittee of the Senate Foreign Relations Committee here with us at the same time.

Senator Murphy is the U.S. senator from Kentucky, elected in 2012. And in just this first term, he’s already got a critically important chairmanship for this subcommittee through which fast-track TPA will go.

And so it’s a particular pleasure, Senator, to introduce you and look forward to your remarks. Thank you.

SENATOR CHRISTOPHER MURPHY (D-CT): Thank you very much. (Applause.) Well, no disrespect to the great people of the state of Kentucky, but I am very lucky to be here with you today representing the people of Connecticut, who today do 40 percent of their trade with Europe. And I know we’re going to have a great discussion here so I don’t want to take too long with my remarks, but let me just say a few things.

First, it’s an honor to be here with the deputy prime minister. I’m glad you had a good conversation today with the vice president. We understand, those of us who have been in the room with the vice president, that sometimes those meetings can run a little bit long. (Laughter.) So we are glad that you have made it.

And though you are going to be here, Mr. Deputy Prime Minister, on a week in which there is going to be a lot of public dissension between Republicans and Democrats, you’re going to hear from Senator Johnson and I today a united front on this issue of our support for TTIP and our hope to use the European Subcommittee on the Foreign Relations Committee as a platform to preach to our colleagues about the benefits, both as the case has been made, on economic terms and on geopolitical terms.

I say this as someone, admittedly, who has not voted for a trade agreement while I have been in the United States Congress. I think I’ve had about two or three that have come before me and I voted against them. And yet I stand here as a cheerleader, I hope, of TTIP, in large part because I think that there is just an unassailable case on this trade agreement, greater than any that I’ve seen before of the benefits that will accrue to the American economy.

I think there was a case to be made on both sides, as some of the previous trade agreements that we have seen, but in part thanks to this wonderful and well-researched report, there is no debate that my state of Connecticut, that right now, as I said, does 40 percent of our export business with Europe – that has seen, as the report says, our aerospace industry, the bread and butter of our economy, increase the amount of goods that we send to Europe by almost a third just over the past six years. There’s no doubt that we are going to benefit, never mind the huge financial services presence that we have that will grow as well to the extent that we can be successful in marrying some of our standards. No question to me that the economics support this agreement.

But, as has been said before more articulately by Minister Clegg and by Ambassador Eizenstat, the geopolitical concerns are what really put this over the edge for many of us.

And I won’t repeat what has been said before, but I will simply add this: our subcommittee oversees Western Europe, but also Eastern Europe and Russia. And we have watched with great interest, especially over the last few weeks, as we’ve been engaged in very high-level diplomatic talks with the Russians, the pull and tug that is happening in places like the Ukraine and Moldova and Georgia and Azerbaijan, the new emphasis that Russia has put onto the customs union. And there are questions that a lot of countries have there about where their economic future lies. Does it lie with a historic affiliation with Russia or does it lie with a new affiliation with Europe and the United States?

Our ability to make good on this agreement despite almost a generation of talk is a very clear signal, the most important signal to those countries that are making the decision, as we speak, about which way they’re going to turn that the benefits clearly stand with an affiliation to a new E.U.-American trade agreement that as it will bring tens of thousands, if not hundreds of thousands of jobs, to the United States can to anyone who chooses to join in from the eastern side of the equation.

And so I just add that to the litany of reasons as to why from a geopolitical standpoint, from the standpoint of American national security, that this agreement is important.

We hope on our committee to be holding hearings soon, talking about this report, talking about the great benefits to be supporting the administration in any way we can to get these negotiations moving forward as quickly as possible and hopefully to be back here at the Atlantic Council sometimes soon to celebrate what will be an economically and politically transformational deal for both the United States, Great Britain, and for Europe.

Thank you very much for having me. (Applause.)

MR. EIZENSTAT: Thank you. And I think the Bertelsmann report underscores why your state of Connecticut is going to be one of the great beneficiaries because there’s no state that has on a per capita basis more emphasis on financial services. And the service sector, as the Bertelsmann-Atlantic Council report indicates, will be one of the great drivers for growth. So Connecticut will certainly be a great beneficiary.

We’re also very privileged to have Senator Ron Johnson, elected in 2010. He’s the senior U.S. senator from Wisconsin, serves on a number of important committees, Budget Committee, Science and Transportation, Homeland Security, Small Business and Entrepreneurship. But for our purposes, importantly, is the ranking member of the Subcommittee on Europe. And Wisconsin, obviously, will have a great interest in the agriculture, sanitary, phytosanitary GMO issues that will come up, Senator, and we’re privileged to have you and look forward to your remarks. (Applause.)

SENATOR RON JOHNSON (R-WI): Well, thank you, Mr. Ambassador. And thank all of you for coming here. My background is in manufacturing. I’m totally new to this political process, as of 2010. So I actually produce plastic sheet that we sell into Europe. I actually purchase equipment from Storck, in the Netherlands. So I’m an unabashed free trader.

I recognize the benefit of free trade. But it also has to be fair trade. I also understand, having now run for political office, how difficult a sell free trade is. But if you really think about it, you know, from the dawn of man, trade has made sense. It’s promoted economic activity. Anytime you look at history, you take a look at those cultures who were isolated from trade. They’re backward. The ones that were able to engage in free trade were advanced.

And so, you know, I really applaud the effort here in this report by helping us make the case because it’s extremely easy to point to a factory that shut down because the manufacturer, you know, sought a little bit lower labor, whether it’s in China or Malaysia or wherever it could be. It’s far more difficult to make that overall case that, yeah, there are some winners and losers, but in total, society in both nations – you know, engage in that free trade benefit.

And so it’s just extremely important that we understand that this is a political process. You have to inform. You have to persuade. You have to win the argument. So from my standpoint, you’re not going to have any problems convincing me, but it is true we have to convince the people that vote for members of Congress.

And, you know, what was interesting about the deputy prime minister’s remarks is, you know, this report obviously shows the benefit to American states. But the deputy prime minister talked about the benefit to the U.K., and that’s exactly the point. It really is – you know, free trade is a win-win proposition here and that’s what we really have to emphasize.

So, again, I really just applaud the efforts of the Atlantic Council and Bertelsmann Foundation for publishing this report and look forward to the discussion. Thank you. (Applause.)

MR. EIZENSTAT: May I ask our speakers to take a seat? And as they do, just remind you of one I think quite dramatic fact, actually. We obviously do not want this to be only an agreement on industrial tariffs. It has to be ambitious and comprehensive.

But just to give you a sense of the scope, if we go to elimination of industrial tariffs alone, U.S. companies would get as much benefit out of that one point of TTIP as would have been gotten by U.S. companies from the whole Doha round. So when you add all the other pieces to it, including regulatory convergence, you get enormous possible benefits.

May I ask the deputy prime minister, just to start the question period, will there be, first of all, multi-party agreement in the parliament on TTIP? And, second, because I know this was an area of interest to you, what benefits could there be to emerging economies who aren’t going to be part of TTIP if we’re successful?

MR. CLEGG: Stu, you mean the U.K. Parliament? Yeah.

MR. EIZENSTAT: U.K. Parliament and then emerging economies.

MR. CLEGG: I don’t – trade is one of those unusual subjects which still enjoy pretty rock solid cross-party consensus in the U.K. Parliament. There aren’t very many issues which do these days, but it’s pretty rock solid. And I say – in other words, whoever is going to be – we’ve got elections, general elections in May, 2015, and I think whoever is in power, whether it’s a single-party government, from left or from right, whether it’s a coalition, the support for TTIP will remain very, very consistent. I really don’t see any circumstances in which any political party will think there’s any political virtue or advantage in suddenly coming out against TTIP. So I’m pretty confident of that.

On emerging economies, I mean, I know there’s a sort of legal side. There’s a WTO legal side to the whole question about how you make regional or indeed bilateral trade agreements consistent with the multilateral disciplines. And I’ll leave that to the trade lawyers. But I just – I’ve never seen it as a zero-sum game. If you get greater prosperity, greater dynamism, greater trans-Atlantic trade, why on earth would that be bad for countries in Latin America or Asia? Far from it.

I think, you know, in exactly same way that you explained that overall trade tends to, you know, lift the tide. I think that is exactly the same – that same principle applies to the global economy. And if you were to get greater dynamism in a relationship, which, as I say, already represents close to 50 percent of global GDP, that, of course, will create further knock-on trade opportunities and effects and greater dynamism for other trading nations in other hemispheres.

MR. EIZENSTAT: Thank you.

Senator Murphy, the Republican Party has traditionally been the more free trade party and our party has often struggled with free trade agreements. Will TTIP be different, you think in the Senate on the Democratic side? And an early test of that may be the effort to get trade promotion authority or fast-track authority. So what do you see happening on the Democratic side with TTIP in general and with an effort to get trade promotion authority in particular?

SEN. MURPHY: Well, I haven’t surveyed my caucus to truly understand whether or not I am representative of the broader trend, but I bet you I am. That’s why in part I said – admitted that I historically have not been leading the charge on free trade agreements, but because I think this is such a different equation. In particular, you just don’t have the very immediate differential in the cost of doing business, whether it be in the service sector or in the manufacturing sector between the United States and European countries than you did in perhaps agreements with Korea or with Central American countries. So I think that there will be greater agreement on the Democratic side.

But I would just provide one caution, which is that I think we are, you know, in a honeymoon period right now. I think we all understand the benefits of this agreement on very theoretical and economic terms, but there is a reason why this deal has not been done or even accomplished at this – or even attempted at this level before because, as you know, Mr. Ambassador, the devil is in the details.

And I think it’s hard to predict exactly how this deal will play out, in part because when the tradeoffs are finally done and there is a big give, for instance, on procurement from the United States or a big give perhaps on agriculture that we may not expect, you’re going to have constituencies line up in perhaps a very different way on this deal, with maybe regional concerns playing a much bigger role in terms of how votes play out than have in the past, where deals – trade deals were largely, as you said, a matter of party and a matter of broader ideological views on the issue of global trade.

MR. EIZENSTAT: Senator Johnson, with polarization and extraordinary partisanship seeming to be the rule of the day, is this one issue where that can be avoided? And if so, how, first of all? And second, you mentioned in your opening remarks about the public. How does one sell this kind of free trade agreement to the people in your state, and more broadly to the people of the United States?

SEN. JOHNSON: Well, with good information like, you know, this report, you know, begins that process. I know our party is often accused of being the obstructionists here. I mean, it wouldn’t be the case in this situation so we’d certainly be happy to reach out and certainly work with the members of the other side to actually move to a successful free trade agreement.

From my standpoint, having been in business for 31 years, done a lot of negotiating, I think you start by figuring out what you agree on, which is why you’re in a honeymoon period, and that’s a good thing. You really ought to spend a lot of time in the front end of these agreements, making sure – let’s ferret out everything we agree on, build relationships, develop a level of trust so that when you hit the disagreements you have a far better chance of coming to some accommodation.

I think the other important point to make out about this agreement and why it’s so crucial just for the world economy is that the developed countries can’t come to terms and can’t come to agreement in terms of free trade – if we become too protectionist, I mean, what’s that going to tell the less developed countries? That really is where we need to, you know, open up our markets to take – it’s the moral thing to do. So I just really think this TTIP agreement would be just crucial just for lifting up all economies in the world, moving toward greater prosperity.

You know, we’re dealing with all kinds of issues. I think the root cause of most of those issues is just lack of economic development. I mean, I’ve seen polls – the number one thing that people yearn for throughout the world is a job. You know, free trade is what’s going to provide those type of opportunities. So I think it’s just the moral thing to do.

And I truly hope that we don’t have partisan bickering on this, that there are going to be individual interests that are going to have to be taken account of so we can actually reach an agreement. But, you know, again, I’m an unabashed free trader because it is the moral thing to do.

MR. EIZENSTAT: Quick question and hopefully a quick answer to both senators. No president has had fast-track authority for a number of years. That would be an early test. Do you think that there will be bipartisan support in the Senate to give the president broad trade promotion authority that would cover not only TTIP but the Trans-Pacific Partnership and other trade agreements?

SEN. MURPHY: I don’t know the answer to that question. There are a number of us who are willing to grant that authority with some conditions or reform. And I wouldn’t necessarily suggest that the vote or the positions individual senators take on TPA is going to be representative or a test vote on TTIP. I think there are some broader and perhaps more nettlesome concerns with free trade, with fast-track authority that may not transfer over to TTIP.

SEN. JOHNSON: I mean, let’s face it. Republicans will be granting that authority if we get the chance.

MR. EIZENSTAT: Well, you can’t, in my opinion, have TTIP without fast-track authority.

Annette Heuser, how do you get your findings out so the public absorbs these?

MS. HEUSER: I mean, we just released our report today, but so far the response is pretty good also in Europe.

And just to add on what the deputy prime minister said, it’s interesting that Europeans are skeptical about the seriousness about the Americans when it comes to TTIP still to a certain extent. And Americans are a little bit skeptical regarding the seriousness of the Europeans.

But when it comes to the Europeans, besides the British, of course, also the German government is fully on board. Chancellor Merkel, who will obviously stay in power after the result of the election that we have seen on Sunday, has declared that this is her number one strategic project when it comes to the trans-Atlantic relationship.

So I think there’s a lot of hope here that besides the nitty-gritty details, which are always an issue in these kinds of negotiations, there is for the first time buy-in from the top political level on both sides of the Atlantic to make this a success because this issue is around for a number of years. We had it in the ’90s under the title Trans-Atlantic Marketplace and we thought the political window was right for it at this time but we were wrong. But right now, all sides need jobs and growth. And TTIP, as you said, Ambassador, is a kind of welcome stimulus for both sides of the Atlantic here.

MR. EIZENSTAT: Mr. Deputy Prime Minister, you’ve flown a long way to come here. You’ve got a very distinguished audience. And so I’m not going to give you a softball question. You’ve got a referendum coming up in 2015 on whether or not the U.K. stays in the European Union. Would a successful TTIP agreement help solidify public support in the U.K. and demonstrate the utility of the European Union to the voters in the U.K.?

MR. CLEGG: Yes, I think it would. We don’t have a referendum in 2015, but I won’t get – I won’t get sidetracked. The parties are staking out different position about when or under what circumstances a referendum would take place. There’s no date in the diary about a referendum. And my view is that it would be foolish to have a referendum on a date just plucked out of thin air, which is the proposal of my current coalition partners.

But whenever you think it may or may not happen, will greater prosperity and greater jobs and great economic dynamism through TTIP strengthen the already, in my view, overwhelming case of Britain’s commitment to its European Union vocation? Yes, I think it will.

MR. EIZENSTAT: OK. One of the things that I’ve seen in previous trade agreements is that some of the NGOs, environmental groups, consumer groups, labor groups have tended to oppose many of the smaller free trade agreements. They’ve been more quiescent on this, but there’s a great concern about transparency. Do you see, Senators, a way of assuring the public, NGOs, and others, and yourselves that as these big tradeoffs are made on GMOs, audio-visual and the like, that you’ll be kept informed so that you in turn can inform your publics and the NGOs?

SEN. MURPHY: Yeah. I think the burden is on us to do that. I think in the past, some members of Congress have been blissfully ignorant of those negotiations. It’s a lot easier to just come in on the back end and declare your support or opposition having no claim or stake in the negotiations as they go on. And so I’ve never – I’ve never bought that argument that a reason to vote against an agreement is because you were cut out of a loop.

What I found is that if you want to be updated on the negotiations, if you want to have some input with the administration, frankly, whether it’s a Republican or Democratic administration, they might not agree with you in the end, but there’s certainly the ability to be part of that process.

So I hope that, in the end, that’s not an excuse for people to vote against this or an excuse for groups to lobby against it. In part why our subcommittee, which frankly doesn’t technically have jurisdiction over this agreement – it’s before the Finance Committee. The reason why we’re hopeful to do these hearings is so that, in the end, no one has that excuse that they didn’t know what was going on.

But you’re right. There are going to be some big tradeoffs and some asymmetrical tradeoffs, potentially, in which you’re trading off a give in one sector against a get in another sector. And that’s going to be hard for some people to understand exactly why we didn’t get everything we thought we were going to get on agriculture. Well, the reason that happened is because there was a major concession made on audio-visual tariffs and non-tariff barriers. That’s going to be tricky to explain to people, which is why we’ve got to maintain a real connection to this as it moves forward.

MR. EIZENSTAT: Senator Johnson?

SEN. JOHNSON: I think information is powerful. I think the more of it people have, probably the better. And I think that the earlier they get it, the better. So rather than dump, you know, all the bad news on the American public all at once, I think you’re probably better off working people through the process, talking about the pluses and the minuses. You know, what was the give and take of the exchange I think probably has a far better chance of ultimate success.

With that, I actually do have to leave, but, again, thank you for, you know, your efforts and thanks for inviting me. Thank you.

MR. EIZENSTAT: Thank you, Senator. (Applause.)

Annette, I think you had a point you wanted to make on this.

MS. HEUSER: Yes. As Fred said, we had yesterday the USTR Mike Froman here at a board dinner. And I think it was very interesting that Michael made it clear that this time, there is zero tolerance to have a kind of opaque trade negotiating process in place and that the integration of the stakeholders, whether they are from consumer protection agencies or from the labor unions, is crucial for the success of TTIP, and the Europeans know that as well.

So I think TTIP can only be as successful as much as we succeed in integrating them in the debates right now. And we see also that for the first time that the think tank community in this town as well as in Europe is really integrated into the entire debate and is part of the kind of public discourse and process around TTIP.

MR. EIZENSTAT: We have time for a few questions from the audience – questions, not statements because I’ll cut you off. Otherwise, quickly. Yes. Identify yourself and please stand.

Q: My name is Richard Normington. I’m from an organization called the City U.K. We have a particular interest in the outlook for financial and related professional services. And I wonder if you could say a few more about it and its inclusion in the TTIP.

MR. EIZENSTAT: Mr. Deputy Prime Minister.

MR. CLEGG: I mean, I think it’s essential that financial services is included in a comprehensive TTIP deal. Obviously, for the U.K., given the size and significance of our financial services sector, we have a perfectly overt and legitimate self-interest in that. But I think there’s a wider – there’s a wider reason for it as well.

I think one of the worrying developments since the crash in 2008 has been that different jurisdictions have applied slightly different spatchcock, sort of Band-Aid solutions to some of the weaknesses in their financial services sector. So we have regulatory divergence and balkanization in an industry which is global in nature. And I don’t think that’s stable or sensible in the long run because when the next crisis or scandal happens in some dark corner of the financial services industry that no one has really kept a close eye on, if you have a sort of balkanized approach to supervisory and regulatory surveillance of financial services, which, as I say, has actually diverged rather that converged over the last two or three years, it leaves the whole system more fragile.

So I think there is a very compelling case, certainly out of enlightened economic self-interest for the United Kingdom, to have financial services included, but also for those people who are interested in system stability in financial services. This is not, by the way, to suggest that, I don’t know, that the U.S. would have to somehow dismantle Dodd-Frank’s framework. Not at all. Or that the U.K. would have to resign from an approach to, in effect, spinning off retail from investment banking systems under the so-called Vickers blueprint. It’s not – that’s not what I mean at all. But if you can create greater transparency and regulatory compatibility between the two systems, that I think will strengthen both systems over time.

MR. EIZENSTAT: Let me just say that this question underscores – and I think, Senator, particularly from your state in Connecticut, the financial services issue is going to be very big. The EU very much wants it all included. The administration seems to want market access included but not regulation and wants regulation to be dealt with in other fora. So this is going to be a very big issue for Connecticut and for the negotiations.

SEN. MURPHY: Yeah. I’ll just – I’ll just say this. I think that our disposition on this is due to the fact that we just came off of a major transformational conversation about re-regulating our financial system. And so I think there’s an understandable reluctance to essentially re-litigate that area of law in the context of this negotiation. But as the deputy prime minister said, that doesn’t necessarily have to happen.

I will just say from a purely parochial standpoint, Connecticut has an enormous number of jobs in the property and casualty and life insurance business. They are increasingly doing more and more business in Europe, offering more and more – excuse me, in Asia, offering more and more products there, but doing surprisingly little in Europe. And so there is – from our standpoint, among some of our biggest employers – enormous growth if we can have a little bit more symbiosis of the standards.

MR. EIZENSTAT: Next question. Yes.

Q: Hi. Will Mauldin, a reporter with The Wall Street Journal. Looking at the job gains, a lot of them seem to be in business services. So does that make it a bit of a – kind of a white color benefits for the trade deal? Would that make it harder to sell to a broader swath of the workforce? And then looking at the – looking at the auto sector gains, how much of that is dependent upon the EU and the U.S. agreeing to open up government procurement at all levels, you know, which would presumably include a lot of cars? Thanks.

MR. EIZENSTAT: Annette, do you want to take this?

MS. HEUSER: Yeah. I mean, I wouldn’t agree with you that when it comes to the gains that we see clearly in the services sector that this is a white-collar industry here that we took a look at, first and foremost. We have no evidence here any further.

And when it comes to the details here, we have Laura Bingham (sp) with us, who is the president of – I take a look around, where she is right now? Here – who is responsible for the methodology of our study.

Maybe you want to add something, Laura, as well when it comes to the services sector and how we decomposed it in particular, and the white-collar question here because I’m not sure if I answered the question sufficiently here, Laura.

LAURA BINGHAM (SP): The United States is primarily a services economy today, so it really probably shouldn’t be terribly surprising that the bulk of the benefits would be in services sectors. And the services – the cross-border barriers to trade between the United States and the EU are primarily in services sectors today. Tariffs are relatively low. So that’s another reason why it’s not surprising to see gains in business services, trade and jobs.

So in terms of government procurement, I think as Ann pointed out in her presentation, the study is based on an – the assumption that government procurement barriers are cut by 50 percent. And that would be affecting just on average, across the board, all of the government procurement barriers to different sectors. These are all averages, saying a 25 percent cut in the cost of regulations, for example.

MR. EIZENSTAT: I’d just like to add on the regulatory side in terms of blue collar jobs, there is an agreement between the EU and the U.S. on airworthiness for wide-body planes. So if the FAA approves a Boeing plan, it’s automatically approved in Europe and the same with respect to the approval of an Airbus.

The auto industries on both sides of the Atlantic are trying to get common standards for bumpers, for side impact. BMW has a plant in South Carolina. They make the same models for Europe in the U.S. but they have to make different bumper standards, different side impact standards. They can’t export that car to Europe because of those. So these are areas – in the regulatory area that can we have a huge impact on blue-collar jobs.

Next question? Yes.

Q: Thank you. I’m Raf Sanchez from the Daily Telegraph newspaper. Deputy Prime Minister, one of the concerns you hear in Washington is that the U.S. is negotiating with the European Union, which is made up of member states and that they want to be sure they’re negotiating with a Europe that’s on one page, that can have a combined position. Are you confident that the European nations are going to be able to hold together? Earlier this summer, we saw France trying to exempt the digital media sector from the talks. Is Europe going to be able to hold together and have a single position on this?

MR. CLEGG: Yes. I think it will do. I think there’s a been a complete transformation in attitudes in capitals across the European Union towards further trade liberalization, certainly in the time that I’ve been sort of following these things. As I think I alluded to in my opening remarks, how many years ago was it now? Maybe it was eight, nine years ago. I was peripherally involved in an attempt at the time in Brussels to, you know, launch this idea. What was it called then? Trans-Atlantic –

MS. HEUSER: Trans-Atlantic Marketplace.

MR. CLEGG: It had a different acronym. It always has T in the acronym but is a different acronym. But it was basically the same kind of idea. And the horror with which this was received not only candidly in Paris but in Rome, Madrid, Lisbon, in a lot of countries which have traditionally been quite suspicious and skeptical about what was then termed as a sort of Anglo-American ultra-liberal approach to trade was really extraordinary. There was a complete sort of allergy to it.

Now it’s completely different. It’s completely different. Yes, sure. Of course, the French government has spoken up for the audio-visual sector. That is totally predictable, unsurprising, much as there are sectors which are of concern to the U.S. You know, everybody is going to have their particular sectoral sensitivities.

But the crucial difference is now – I think this is partly because of the aftershocks of the very, very severe economic recession in Europe and elsewhere, there’s just this very strong recognition across the European Union, south as well as north, in those countries which were not traditionally arch trade liberalizers that this is now an essential ingredient in their own economic recovery and the rebalancing of economies which have been knocked off balance so badly by recent calamities in the financial system.

So I think there’s – you know, there’s been a complete change. If you go to – if you go to Madrid now, you’ll hear from the Spanish government an absolute unalloyed commitment to TTIP in a way which would have been unimaginable five, eight, 10 years ago. There’s been a complete change. And I think that will be reflected in European Union political commitment, perhaps not least because of the recent results in the German elections, in the course of these negotiations.

MR. EIZENSTAT: I would just say my experience in negotiating with the EU is they often ask whether we in the executive branch could deliver our Congress. So it’s tit for tat.

We have time for one last question. OK. Yes.

Q: Thanks. Dan Migiu (ph) with Public Citizen. The list of non-tariff barriers, the dismantling of which constitutes the majority of the gains in this study, the list of non-tariff barriers that were scheduled for dismantling in the Center for Economic and Policy Research study on which yours is based included such things as grade A safety standards for milk, the Sarbanes-Oxley Act, the Volker rule. A number of foods safety standards, a number of financial stability standards. And so the question is the study assumes that one out of every four of these can be eliminated or weakened.

The question is do you think that really is actually political tenable? That’s a question for Senator Murphy or for the foundation.

And the second question is since the study does assume that it’s tenable and in fact assumes the gains from that, did the theoretical model that projected those gains also project the cost that could result from an incidence of food-borne illness, for example, or financial instability?

MR. EIZENSTAT: Let me just say I think this question is an indication of concerns that some of the NGO community has. And it’s very important to get across the point that this is not a dumbing down of regulation. That’s not the point of regulatory converge. But Annette and then – let’s take the senator and then –

SEN. MURPHY: Let me just make two quick points on the politics of it. To the extent that we’re talking about food or product safety, as long as the new requirements are based on science, science should be the same across the Atlantic. And so as long as we’re making decisions about what is allowed to be sold and what is not allowed to be sold based on good science, then I think that we can sell that back home politically.

And with respect to something like the Volker rule, again, I think there is some concern about re-litigating the issue of financial sector regulation, but, again, as long as there is a substitute, if there is a better way to regulate the financial sector with some common standards, as long as it is not a diminution or dilution of what we’ve already passed but a mere substitution, I think that’s – we can sell that as well to our constituents.

MR. EIZENSTAT: I would like to give the last word to the deputy prime minister.

MR. CLEGG: I just don’t think regulatory convergence equals regulatory anarchy. It’s just is a kind of – it’s looking at the wrong end of the telescope. In fact, as I said earlier to the questioner from City U.K., I think there is a systemic danger in having regulatory divergence in some very important global industries which require a certain consistency with which they are scrutinized, surveilled, and regulated by regulators.

So I think far from making the system less safe, a sensible degree of regulatory converge can in many respects allow, particularly in those industries which are now so system-important to our highly integrated economies, can make those economies more safe.

MR. EIZENSTAT: Thank you very much. I think that, you know, the Bertelsmann study in conjunction with the Atlantic Council, the participation of Senators Murphy and Johnson and particularly of the deputy prime minister come at a very important time. The next major round of negotiations will begin in just a few weeks in Washington. So your remarks are very much appreciated. The study lays a very important foundation. Thank you all for coming. (Applause.)

(END)

Image: Photo: Kaveh Sardari