Remarks at the EU Chambers of Commerce Event

– as prepared –

Good evening, ladies and gentlemen. President Tkatchenko, thank you for the invitation to address the EU Chambers of Commerce this evening in such a lovely venue.  As you can imagine, the U.S. Embassy works very closely with the American Chamber of Commerce in Hungary, so we know the valuable work chambers such as the EU Chambers of Commerce do to further economic and commercial relations with our host nation.

I’ve served as U.S. ambassador to Hungary now for over one and a half years, and I have to tell you that working here, in one of Europe’s most beautiful cities, has been an extremely rewarding experience.  Most of the pillars of our bi-lateral relationship are strong. We have some areas where there are political differences and where we have expressed our concerns both publicly and privately, but the relationship remains one that is rooted in our shared values and commitment to advancing our common interests. First and foremost, of course, is our common membership in the NATO alliance.  Hungary contributes forces to NATO’s efforts in Afghanistan, which we greatly appreciate, and is a member of the Counter-ISIL coalition.  We conduct regular joint military drills to increase NATO’s combat readiness, and our own.  And Hungary has recently pledged to increase its military spending to achieve NATO goals.

We also have a valuable alliance in law enforcement.  Hungary has been host for many years to the International Law Enforcement Academy (ILEA), run by the U.S. Federal Bureau of Investigation.  ILEA offers many courses to law enforcement professionals around Europe, and especially in this region, on important topics.  For example, counter-terrorism, drug interdiction, Cyber Security, and most recently how Social Media impacts National Security.  Hundreds of law enforcement officers go through these courses each year.

These are great examples of our cooperation.  And then, of course, there is our commercial relationship.  Although Hungary is a small market, it packs a greater punch than its market size might indicate.  The fact is, American companies like doing business here.  It is a centrally located market, making it easier for our firms to export their products made in Hungary to the rest of Europe.  It has a highly educated work-force, which is attractive to companies like National Instruments, IBM and GE to name just a few.  I often meet with representatives of U.S. companies who share their concerns about labor shortages. Unfortunately, there are simply not enough of skilled workers here in Hungary, and labor mobility is wanting.  I know the Hungarian government, often in lock-step with U.S. companies, is tackling this issue.  Part of the problem is the brain drain of skilled workers that has occurred since Hungary joined the EU and this problem is not unique to Hungary.    I am hopeful however, as are our companies hopeful, that this challenge can be overcome, so that they can continue to grow their businesses and expand their footprints here in Hungary, which they often tell me they would like to do.

You might be interested to know how many American companies are doing business here.  More than 300 U.S. companies have investments in the country, and with their subsidiaries, that figure exceeds 400.  Cumulative FDI figures range from over $5 billion to $9 billion, depending on how it’s counted.  I think the more interesting figure, though, is that American companies employ almost 100,000 Hungarians, making us the number two foreign employer after Germany.

Our commercial ties run deep.  An example is Andy Grove, co-founder of INTEL.  Andy, who just recently passed away, was Hungarian by birth and helped create a whole new industry and work culture.  I understand there are now thousands of Hungarian companies active in Silicon Valley.  One shining example is Prezi, the presentation software company.  Formed in Budapest, they now also call San Francisco home, having obtained venture capital in the Valley that enabled them to grow their business by leaps and bounds.  I just returned from leading a very successful trade mission to what we call the Select USA Summit.  This yearly event is designed to help foreign companies who wish to get established in the United States.  Our Commercial Service office recruited 14 Hungarian companies to participate in this mission; it was the first time such a mission from Hungary has attended the Summit.  I understand that most of our participants have found eager business partners in America. We will work hard in the coming years to expand this incredibly dynamic bilateral commercial relationship.

Of course, we also firmly believe that this relationship can grow even more if certain things occur.  One is the successful negotiation and passage of TTIP.  This agreement – which, at its basic level, is designed to eliminate duplicative testing requirements, harmonize standards and reduce tariffs – could be a catalyst for economic growth through trade on both sides of the Atlantic.

And then, there is the discussion of corruption.  Important conversations are taking place around the world in our global effort to combat corruption. We believe that corruption not only impacts economic prosperity, but also human rights and national security.  Nations cannot progress and provide their citizens the maximum amount of economic opportunities if the system is inherently stacked against them whether because of cronyism, sudden changes in rules and regulations, non-transparent business dealings, or all of the above.  Of course, Hungary is not the only country in the region with this challenge.  But we think it important enough to continue to emphasize it in our bilateral dialogue.

As I mentioned earlier, our bi-lateral economic cooperation is strong and growing as is our commercial relationship between the U.S. and the EU.   It is large. Here are some figures:  It’s about $1.6 BILLION per day!  That’s $620 BILLION a year in two-way trade.  That equals our trade flows with our neighbor Mexico and eclipses by far our two-way trade with China, which is about $1 BILLION/day.  The United States is the number one trade partner with the EU, number one in terms of buying EU products and number two in provision of imports to the EU.  The two-way trade flow increased by over $100 billion from 2014 to 2015.  Foreign direct investment tells a similar, robust story.  Cumulative FDI stocks from 2009 to 2014 show $1.4 TRILLION from the EU into the U.S. and $1.8 TRILLION from the U.S. to the EU.  Can you imagine the possibilities if remaining trade barriers on both sides of the Atlantic were eliminated?

In closing, it is worth noting that the EU-US relationship since WWII has provided the vehicle for the expansion of international trade, not only bilaterally, but around the world.  The result has been hundreds of millions of people attaining living standards their ancestors could only dream of.  Let’s keep it going.

Thank you very much for your attention.