Business in America and Sweden: Common Challenges and Opportunities, Remarks

Thomas J. Donohue
President & CEO
U.S. Chamber of Commerce

16th Annual General Meeting
American Chamber of Commerce in Sweden
Stockholm, Sweden
Tuesday, June 3, 2008

As Prepared for Delivery

INTRODUCTION-the U.S.-Sweden Relationship

Thank you very much, and good afternoon ladies and gentlemen. It's an honor to participate in AmCham Sweden's 16th Annual General meeting.

I'd like to begin by saluting the American Chamber of Commerce in Sweden. You've only been around for 16 years - but think about all that has happened since you first got organized.

Sweden pulled out of a serious economic downturn, joined the European Union, and diversified its economy to include technology and services alongside resources and industry.

The country embarked on a path of energy diversity — long before others realized how important this would be.

While wary of foreign entanglements, Sweden has stepped up to play an important role in peacekeeping efforts and in the NATO Partnership for Peace.

Today, Sweden stands as one of the most modern, efficient, globally competitive economies in the world. You and the companies you represent have played a role in this success and you should be proud of that.

In fact, over 1200 U.S. companies have invested $36 billion in Sweden and employ more than 100,000 workers here.

All told, our countries exchange more than $18 billion in trade each year - a good number but one that can grow much larger.

But our ties go well beyond commerce. Swedes have been a part of the fabric of the American nation for nearly 400 years - and today 14 million Americans of Swedish heritage live in the United States.

PURPOSE OF TRIP - The Transatlantic Relationship

This is a good, solid relationship and there are many things to celebrate. But I am here to talk about the future, not the past.

I have come to Sweden to meet with business and government leaders to discuss the transatlantic relationship, the common challenges we face together to stay competitive, and the leadership we must provide to tackle global problems.

My next stop is the Saint Petersburg Economic Forum in Russia. I am sure that the Swedish insights into the new Russia will be very helpful as we engage with that country's leadership.

The transatlantic relationship is the backbone of global commerce. It is vitally important to make sure it is vibrant and growing.

We are very supportive of ongoing efforts by the U.S. and EU governments, under the newly created Transatlantic Economic Council, to remove existing barriers in the transatlantic market - and to prevent the emergence of new ones.

The Transatlantic Business Dialogue, comprised of leading CEOS from both the United States and Europe works on these issues as well — and I am honored to be the senior U.S. advisor to that group.

I am encouraging Sweden to be a more active participant in these activities, particularly ahead of its presidency of the EU Council next year.

What issues should we be working on together?

Both continents face the challenges of changing demographics…soaring energy prices and climate change…the theft of our intellectual property…the need to attract workers and human talent…and the imperative of convincing our citizens and others that the path to prosperity is through open markets and flexible, innovative economies.

The U.S. and Europe must also work to improve our laws and regulations, so that they do not unjustly or unintentionally impede or penalize entrepreneurship and legitimate risk-taking.

Together, we must increase areas of regulatory cooperation. Regulatory divergences borne out of bureaucratic rivalries are inexcusable and are a drag on commerce. Our regulators must cooperate to reduce the risk and waste of incompatible rules on the two sides of the Atlantic.

The U.S. and Europe must also resist isolationist tendencies, and work together to convince other nations to abide by international principles of open trade and investment. This includes getting the Doha negotiations back on track to a successful conclusion.

Our Chamber is leading the fight in Washington to keep our own markets open and to reach agreements that will remove barriers throughout the global economy. We are looking forward to the upcoming US-EU Summit in Slovenia — an important opportunity to reaffirm these principles.

Europe and the United States will not always see eye-to-eye on the challenges I have mentioned. But we will always have far more in common than we will have differences.

What's important is that we, as the leading economies of the world, actually step up to the plate and provide the leadership that's expected of us - cooperating where we can to find solutions.

The very positive work done between Sweden and the U.S. in renewable energy technologies is a great example of what's feasible and effective. It is this kind of constructive cooperation that will benefit our economies, our commercial relations, and our environment.

I met with Ambassador Wood this morning and told him what you already know - that his can-do leadership on this issue has been outstanding.

These are just some of the issues I am here to discuss in this visit and in St. Petersburg. I'd be happy to go into greater depth during the question period.

U.S. ELECTIONS AND ECONOMY

But since this is, after all, an AmCham event, what I thought I'd do for just a few minutes before concluding is share some thoughts about what is going on back in the United States.

Today is actually a very interesting day. Mark your calendars. Today in the United States, Tuesday June 3, we will hold the very last presidential primaries of this election cycle - in South Dakota and Montana.

I'm sure you are all very disappointed that there aren't more primaries to come!

I will go out on a limb with this prediction: On January 20, 2009 a new President of the United States will take office. And whoever takes office will face the same set of challenges confronting the nation, the world, and the American economy.

Clearly our economy is performing weakly right now. Given our size and influence, that's important to Sweden, Europe and virtually all of the global economy.

Are we in a recession or going there soon - as many have said? Not by any standard definition.

The U.S. economy grew by .9 of a percent in the first quarter. Our economists at the Chamber think it will actually pick up a bit in this quarter and that for the year, we will grow by 1.7 percent.

Still the numbers are weak and close to the edge. And we still don't know how high energy prices are going in the short term. It's energy prices that represent the biggest hit on our economy right now. I'll have more to say about energy in just a minute.

But the $13 trillion American economy is nothing if not resilient. We will work through these current difficulties.

The Chamber's Competitiveness Agenda - and Energy

What we're doing at the Chamber is putting a lot of focus on what our country must do to lock in competitiveness, growth, and prosperity for the long haul.

We're asking, how does the United States continue to lead in a global economy that is changing rapidly and where new players are emerging as both partners and competitors?

Our answer is what we call our Competitiveness Agenda. It identifies the challenges we face and the steps any new President and Congress should take. And we are building a program of education, lobbying, action, and reform around each one of these challenges.

I've already touched upon some of these issues. It begins with human capital. We've got the best colleges and universities in the world - but our primary education system needs serious reform. One third of American high school students don't even graduate in four years - and it's 50 percent and more in some minority communities.

We need to overhaul our immigration and visa policies. Just like Sweden, America needs more workers to support a growing economy and the legions of baby boomers who have just started to retire.

We need to rebuild and modernize America's infrastructure. Many of our roads and bridges are crumbling. Our aviation system can't handle current capacity much less the rapid growth in air passengers and freight that's just around the corner.

Our U.S. capital markets are facing stiff competition from Europe and Asia. Competition is okay. What's not okay is the regulatory mess we have created in our markets over the years. We need a smooth, modern regulatory system that protects investors, provides transparency, and moves toward a system that is compatible across the Atlantic.

I don't have to tell anyone here about the excesses of the American legal system. The Chamber and our Institute for Legal Reform have led the fight for more than 10 years to stop junk lawsuits and rein in the class action and mass action trial lawyers.

We've made a lot of progress. So much progress that those lawyers are making a big push into Europe, trying to convince companies here to adopt the worst features of the U.S. legal system. Our message is - don't do it!

I have already mentioned trade. One thing we are working very hard on is trade education. Proponents of free and fair trade need to do a much better job in explaining the benefits in terms that average citizens can appreciate.

Part of this education is educating governments and consumers — in the United States, in Sweden and around the world - to respect and protect intellectual property. We have a major program underway to fight IP theft, counterfeiting, and piracy.

Health, labor and tax issues are also on our Competitiveness Agenda - and I could give an entire speech on each of those topics.

I've saved energy and climate change for last because I know it is of great interest and concern here. Energy is obviously big on the Chamber's agenda. In the United States, we face some fundamental energy realities that many people choose to ignore.

First, we are going to need a third more energy by 2030 just to keep our economy running - and growing.

Second, we're competing in a global economy that will need at least 60 percent more energy by 2030.

Third, the United States has plenty of domestic energy resources available but we have foolishly locked most of them away. We can develop more of these resources in an environmentally safe manner.

Fourth, 85 percent of America's energy now comes from fossil fuels - and that won't change overnight, or even in decades.

I know that Sweden has significantly diversified its energy mix, substantially reducing its reliance on traditional sources. Good job - but it took over 30 years to get there in a country of 9 million people. Sweden's experience is a testament to what is achievable in energy diversity, but it also illustrates the reality that it takes time and a long-term commitment.

The Chamber has launched a major effort to address these energy realities — along with the equally powerful reality that you can't talk about energy without also talking about climate change.

We have established the U.S. Chamber Institute for 21st Century Energy, led by former NATO commander General Jim Jones, to shape and advance a new approach for the United States - an approach that supplies our economy with diverse, secure, clean, and affordable energy while also responding effectively to climate change.

Our approach advocates the need to expand our energy supply from all sources - traditional, renewable, and alternative.

Our approach calls for major public and private investments in clean energy technologies. We must deploy technologies that not only diversify our fuel and power mix, but also allows us to use traditional sources while reducing their carbon impact.

Our approach calls for continued improvements in efficiency - the most promising alternative energy resource out there today.

And, we support strong U.S. involvement in the effort to reach a successor agreement to Kyoto on climate change - an agreement that includes all emitters…an agreement that sets ambitious goals but which allows each country to find its own best path to meet those goals.

We can positively address climate change. But we must do it in a way that allows economies to grow, that creates jobs and economic opportunity across the world, and keeps us on the path of reducing global poverty - rather than pushing millions back into poverty.

Conclusion

Let me end where I began. You have done excellent work at this AmCham. You've got the right members, the right leadership, the right staff, and the right strategy.

There is no more important commercial relationship anywhere in the world than the transatlantic relationship. And you are right in the middle of it - making it work productively and effectively for the mutual benefit all.

The U.S. Chamber and AmCham Sweden must continue to work together closely to ensure that transatlantic commerce continues to grow, that economic integration and cooperation continue, that disputes are quickly resolved, and that new, more subtle barriers are not allowed to replace those barriers we have worked hard to eliminate.

I want to thank you for your warm hospitality today and for all that you do every day to help American business succeed in this important country and this important market.

Thank you very much.