Richard LeBaron, Chargé d'Affaires a.i.
Speeches & Remarks
12 March 2009
Chargé d'Affaires address to Defence Manufacturers Association
Thank you for that kind introduction.
It is a great pleasure to be here this morning, sharing a platform
with the Minister and your other distinguished speakers, all of
whom I can confidently say are far better versed in the topic at
hand than I would claim to be. The first question most people ask
me during this transition period is "Who is the new American
Ambassador and when will he or she be arriving?" I'm delighted
to be able to tell you this morning, of course in strictest confidence,
the answer to that question - the new Ambassador will be a distinguished
American citizen who possesses the full confidence of President
Obama, and he or she will be arriving as soon as possible after
the President makes the nomination to the United States Senate and
the Senate offers its advice and consent.
Before making a few brief remarks, I would like to thank the organizers
and sponsors of this seminar: the Defence Manufacturers Association,
UK Trade & Investment, our hosts here at the Department for
Business, as well as the Greater Richmond Partnership and the Hampton
Roads Economic Development Alliance. I'm always delighted to see
Virginia organizations active around the world. Virginia is my home
in the United States, and even when serving overseas, I'm a dutiful
contributor of income tax to the Commonwealth's coffers. And my
wife is in Virginia right now, where she is doing her part to stimulate
the economy by investing in an addition to our old farm house on
the Chesapeake Bay.
U.S.-UK Partnership
On both sides of the Atlantic, we often say that there is no other
partnership in the world comparable to the partnership between the
U.S. and the UK. We call it the special relationship. This audience
knows that this is not just a cliché, or diplomatic flattery
of an ally. It is a reality. A reality because it combines an enduring
set of common interests and values with the ability to take joint
action to promote and defend them. It is a reality because of the
level of trust implicit in the relationship. It is based on a fundamental
belief that, whatever differences may arise, both parties are committed
to the the same fundamental goals.
The quality and endurance of any partnership is always tested when
the stakes are highest - as in times of war and economic crisis.
Today the stakes are very high for both of our countries. We face
an unprecedented economic crisis characterized by great uncertainty
and anxiety over the future. We are also both engaged in military
action in Afghanistan as part of a NATO effort to combat violent
extremism in that region of the world.
This is the context in which President Obama and Prime Minister
Brown met in Washington last week. The Prime Minister was the first
European leader to meet with the President in the Oval Office because
it is clear that a common effort is needed if we are to meet the
economic challenges we face. We start, as the President said, with
the knowledge that "Great Britain is one of our closest, strongest
allies, and there is a link, a bond there that will not break…not
only on the economic front, but also on issues of common security."
Some of you may have seen articles in the press about a perception
that somehow the Prime Minister had a less than successful visit
to Washington. I can tell you, on the record and unequivocally -
that's nonsense. The President and the Prime Minister focused on
the business at hand - finding ways to address the economic realities
being faced by worried populations on both sides of the Atlantic.
They spent time together privately and with their economic teams.
It was a substantive and constructive conversation between two leaders
who will be judged by results, not by the time they spend on diplomatic
niceties. This is a time for getting down to business, and that's
what our leaders did.
G-20 Summit
The G-20 Summit will take place in a couple of weeks from today.
Last week, the G-20 Sherpas (the senor officials preparing the summit)
met in London to work on the elements of the summit program. This
weekend our Treasury Secretary will join his colleagues for a G-20
meeting here in the UK that will take the process forward. President
Obama, Prime Minister Brown and the other leaders of the G-20 will
then gather here in London to address solutions to the international
financial crisis.
We've had fully engaged teams working with their British colleagues
on the summit. And as someone who has seen many U.S. administrations
come and go, I can safely say the Obama Administration has come
out of the gate very fast, and is fully cognizant of the extraordinary
challenges we all face. Going into the Summit, both the U.S. and
the UK have led the way by already taking a number of critical steps
to shore up their financial systems and stimulate their economies.
President Obama is moving forward with an ambitious economic recovery
plan for the U.S. and a 787 billion dollar stimulus package aimed
at "jolting the economy back into shape".
Trade and Investment
Clearly, recovery in both of our economies is important to maintaining
our strong ties in trade and investment. Notably, the U.S./UK partnership
in foreign direct investment has grown to become the largest in
the world with an investment stock valued at over 800 billion dollars.
Over two million jobs, about one million in each country, have been
created over the years to manage and drive this flow of investment.
Our bilateral trade is valued at over 200 billion dollars annually.
However, the financial crisis is beginning to take its toll. In
the last quarter of 2008, our bilateral trade declined by 10 percent
compared to the same period in 2007. Although much uncertainty lies
ahead, one thing is certain - that it is incumbent on all of us
to do now whatever we can to help maintain positive momentum in
our overall trade and investment relationship.
Defense Trade and Investment
Our trade and investment relationship in the area of defense and
security is vital to both of our economies. Presently, the U.S.
Department of Defense has about 9.5 billion dollars worth of contracts
with UK companies. These contracts cover a wide range of items,
including aircraft engines, sensors, bridging equipment, test equipment
and respirators. In recent years, UK defense companies have made
substantial acquisitions in the U.S. market, employing over 100,000
people. This investment activity mirrors the substantial investments
that U.S. defense companies have made in the UK. Many of the companies
who have made these investments are represented here today.
Export Licensing
Those of you who import U.S. defense products and technologies
into the UK make an important contribution to our trade. We can
all agree that U.S. export licensing of sensitive defense goods
is vital to our security. We can also agree that it is essential
to have transparency with respect to exporting and transfers of
licensed goods between countries. Some of you may have concerns
about the U.S. export license regulations in relation to your business
plans. Some perceive that the licensing process is difficult and
cumbersome. However, the facts tell a different story. The U.S.
State Department approves 99 percent of all license applications
for defense exports from the U.S. to the UK. In 2007, the State
Department approved about 9,400 licenses for shipments to the UK,
representing U.S. exports worth an estimated 1.9 billion dollars.
Buy American
You've heard about the so-called "Buy American" provisions
in the stimulus package. What you may not have heard is that they
do not apply to any country that has signed the WTO Government Procurement
Agreement, which includes all of the EU member states - they do
not apply to poor countries - and we are willing to waive them for
any other country that will make its government procurement market
open to us. This certainly doesn't sound like protectionism to me.
Obama and Defense Contracting
Those of you who compete for defense contracts should also be aware that President Obama recently spoke about the U.S. Government's
procurement process. I encourage you to read those remarks carefully,
made on March 4 in Washington. He announced new measures to build
public trust in the process. These will include a series of reforms
aimed at ensuring greater transparency, better oversight and more
effective cost controls in government contracting. The goal of the
reforms is to realize tens of billions of dollars of savings through
greater accountability and a more open process in awarding contracts.
Foreign Corrupt Practices Act
Another vital aspect of U.S. defense exports is the shared commitment
of the private sector and the United States Government to good corporate
governance in the defense sector, including compliance with the
United States Foreign Corrupt Practices Act, known as the FCPA.
The U.S. Congress enacted this law in 1977 to prohibit the bribery
of foreign officials, thereby restoring public confidence in the
integrity of the American business system. I would like to underscore
the importance that we place on vigorous enforcement of the FCPA
worldwide. Recent, high-profile cases of enforcement make it clear
that violations will continue to be investigated and prosecuted.
Defense Trade Cooperation Treaty
Integrity and mutual trust are the basis for a new level of bilateral
defense cooperation. Our two governments agree that we can enhance
our cooperation further by reducing barriers to the exchange of
defense-related goods, services and information. To that end, our
leaders signed the Defense Trade Cooperation Treaty on June 26,
2007. The U.S. Senate is currently reviewing the treaty, since U.S.
law requires Senate advice and consent for all treaties. The provisions
of the Treaty benefit our countries' capabilities in operational
defense by improving the interoperability of equipment and systems
used by our armed forces.
NATO
Defense cooperation in the multilateral context is also critical.
On April 4, the NATO heads of state, including President Obama and
Prime Minister Brown, will gather in Strasbourg to mark the 60th
Anniversary of the founding of the Alliance. The leaders will reflect
on NATO's success and growth over the past 60 years, as well as
discuss the challenges facing the Alliance. The U.S. commitment
to NATO is solid. As President Obama reminded us in his recent remarks
to a joint session of Congress, "In words and deeds, we are
showing the world that a new era of engagement has begun. For we
know that America cannot meet the threats of this century alone,
but the world cannot meet them without America".
During this time of great financial uncertainty, the United States
and the United Kingdom both continue to exceed the levels of defense
spending and military investment of other NATO members. In 2008,
the United States spent about 625 billion dollars on defense, including
funds allocated for counter-terror programs. This amount represents
roughly 4 percent of our GDP - a figure that is actually low by
historical standards.
In comparison, in 2007, 19 NATO members each spent less than two
percent of GDP on collective defense. In financial terms, the United
States and the United Kingdom are carrying more than their share
of the collective defense burden.
Afghanistan
From an operational standpoint, the most pressing challenge at
present is Afghanistan. As you know, President Obama has recently
announced a significant increase in the number of troops to be deployed
to Afghanistan. The U.S. Government and Her Majesty's Government
are currently engaged in policy reviews in order to link more closely
military and development goals and to encourage a more robust Afghan
contribution to regional stability. High on the priority list for
the U.S. and UK delegations to the NATO Summit will be to find new
ways for all members of the Alliance to make substantial, meaningful,
and coordinated contributions to our common security and development
goals.
Summary
The U.S./UK partnership and our strong, multifaceted ties in trade
and investment are presently facing the unprecedented challenge
of the global economic downturn and related business and market
uncertainties. However, every new challenge presents opportunities.
Our two governments are undertaking measures to shore up financial
systems, to ensure the availability of trade finance, to instill
business confidence, and to create new jobs.
We have faced difficult times before. I am confident that the current,
daunting challenges will be overcome - just as the hardships and
hurdles of the past were successfully overcome when pessimism gave
way to a spirit of optimism.
I wish all of you continued success in all of your business endeavors.
Thank you for your commitment and for your contribution in keeping
the trade and investment relationship strong, and thank you for
your innovation as you find new and better ways to provide the systems
and equipment necessary for our common security.
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Speeches & Remarks