Ladies and gentlemen,
I am grateful to Marta Dassù for organising this seminar. I also extend my warmest thanks to the German Marshall Fund of the United States, the IAI and the Compagnia di San Paolo.
"The shift of power from the West to the rest" is a well-known concept. The emergence of new actors is redefining a long-established balance among powers. The western economic crisis has magnified this trend.
However, I believe that the West can maintain confidence in itself thanks to deeper and wider Atlantic bonds. Deepening the Atlantic could boost our economies and increase our security. Widening the Euro-American partnership to Latin America and Africa could lead to new and promising dimensions of cooperation.
Deepening the Atlantic
The closeness between Europe and the United States draws on deeply rooted common values: democracy, human rights, the rule of law, and free market. There is no such integrated economy in the world as the Transatlantic one. Figures tell the truth. The US and the EU economies account together for half of the world GDP and for a third of world trade flows [EU Commission's data]. Total US investment in the EU is three times higher than in all of Asia. And EU investment in the US is around eight times the amount of EU investment in India and China together.
The US and the European Union are still playing a leading role in security matters. The Transatlantic partners are on the front line in all major world crises. It is true that we are witnessing a shift of balance in world defense spending. Over the next few years, the US share could fall from 50% to 42-39%, Europe's from 16% to 15%, while the military spending of the rising powers - I especially refer to the BRIC countries - is expected to grow by 150%. However, the combined military budget of the US, the European countries and other NATO partners, is still a huge proportion of the global total: around 70%.
So, despite much rhetoric to the contrary, the numbers do not justify any decline theory. But the current economic trends and budgetary constraints show the need for new strategies. Strategy is even more essential when money is scarce.
I would like to mention three main aspects.
First: Economic strategy. The EU and the US enjoy the most integrated economic relationship in the world. But they can generate much more trade and more investments. According to a study by the European Commission, a Transatlantic Free Trade Area (TAFTA) will expand GDP on both shores of the Atlantic by 163 billion euros, increasing trade by 50%, with 7 million new jobs. The deal, as its negotiators say, has to be done "on one tank of gas", that means in the next two years. At the same time, the European Union is negotiating with Canada a Free Trade Agreement (CETA). We are at an advanced stage. Tomorrow, a ministerial session could reach some substantial progress.
More jobs, more opportunities for small and innovative businesses, more prosperity would greatly benefit Western middle classes. It could be the best response to the challenges of globalisation. As Charles Kupchan said, "hard times can stoke protectionism and isolationism, but globalization is here to stay, and retreat is not an option". Growth through trade and liberalization is a reliable alternative to traditional deficit spending measures.
To succeed, we must be cohesive. Strength can only be found together. I hope that the US and the European Union will finally agree on the opening of the negotiations for a transatlantic free trade agreement. On the other hand, success can also promote cohesion within the European Union. As the Economist has recently observed, now that Britain is talking of holding a referendum on its EU membership, a successful agreement with America could demonstrate that the British do better bargaining through the EU than alone.
Second aspect: the security strategy. Scarcity of resources is also an opportunity to better develop our security strategy. It is high time to promote efficiency, rationalisation, and division of labour within the Transatlantic community. Smart defence and cooperation can generate savings, economies of scale and added value. This was the key message by the Chicago's NATO Summit.
We Europeans can no longer be "security consumers", under US protection and responsibility. The US has updated its security posture and the new American defence strategy is leaning towards a streamlined military instrument. Italy is pushing for "More Europe" in defence, in order to strengthen Euro-Atlantic security and make Europe a "security provider".
As the third and final point, let me mention the energy market. There is much scope to deepen Transatlantic cooperation especially in this field. Our geography, resources and energy mix raise different expectations. Europe heavily depends on gas imports; the US - thanks to the shale gas - is reaching self-sufficiency. But Europe and America are inspired by the same principles. Both believe in open, transparent, competitive and sustainable global energy markets. I am sure that, in the framework of the US-EU energy dialogue, we will continue to enhance these principles, reaching concrete outcomes in the Energy Council.
Widening the Atlantic. Deepening the transatlantic relations is not sufficient. We should also widen them to Africa and Latin America, two continents where economies are catching up fast and with a new generation of democratic leaders. Africa and Latin America have undergone major economic reforms; they have huge human capital. They are not just main suppliers of raw materials; their middle class is dramatically expanding the domestic markets and the demand of foreign investments.
We must work to establish stable and lasting partnerships between Europe and these two regions. Europe, Latin America and Africa stand side by side in many fields: from crisis management and governance to regional integration; from energy and climate change to the fight against illegal migration. Building upon shared values, we can consolidate international stability and economic growth through an accrued participation in the political and economic life of larger segments of our societies.
TAFTA can be a model not only for the North but also for the South Atlantic. There is already a strong partnership between the European Union and Latin America in promoting quality investments. The EU-CELAC Santiago Declaration has just restated the importance of this partnership. There is no doubt that also in the African continent the EU has a key role as the largest partner and donor.
But it is not just about economy and trade. Global challenges - such as natural disasters, piracy, terrorism, drug and human trafficking - could be more effectively addressed in a wider Atlantic area. Think of Colombia, which is increasingly cooperating with Western African countries in the fight against drugs. And again think of the direct, impressive impact that the narcos are having in financing terrorism in Mali. These are just two examples that demonstrate that a clear interrelation exists between the challenges that Africans on one side, and Latin America on the other, must face.
In conclusion, I see Europe, Northern and Southern America, and Africa as the four sides of a square. Much of the security and prosperity of our citizens will depend on the ability of these four Transatlantic partners to make the quadrangle work. By involving all Southern Atlantic countries, we would strengthen the transatlantic relationship.
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