Ambassador Ammon's speech at Hertford College, Oxford on "German cooperation after Brexit - risks and opportunities?"

20 October 2017

Ambassador Peter Ammon Enlarge image Ambassador Peter Ammon (© German Embassy London) On 19 October, Ambassador Peter Ammon spoke at Hertford College, Oxford on "German cooperation after Brexit - risks and opportunities?".

Read the Ambassador's speech in full below.

Ambassador Ammon's speech at Hertford College, Oxford

Ladies and Gentlemen,

I am aware that Brexit is the burning issue of political conversation in this country, and I – as an Ambassador – would be ill-advised to interfere in the ongoing domestic political battle.

But I hope you will allow me to make a few remarks on how this debate is seen from Germany:

First: The immediate reaction in Germany after the referendum was one of ‘bewilderment and grief’.  Not mainly out of fear for an important market for our exports, but for fear of losing a political ally whose outlook on the world is similar to our own, making us natural partners.

Germany and the UK campaigned side by side in Brussels when liberal ideas had to be defended.

The Single Market is a British brainchild. Together, we supported free trade policies of the EU and EU enlargement.

Second: I see a risk that Brexit will so dominate attention in this country that the UK may overlook other trends, both in the field of geopolitics and geo-economics, that are about to change our world even more profoundly.

London always stayed involved in European Affairs. Leaving the EU means giving up its seats in the Council, the European Parliament, and the many other bodies of influence on everything European.

Already before Brexit, the UK was exempted from many aspects of EU policies that it found too entangling, like the Euro and the Schengen Passport free travel zone, and had opted out of and then partially back into Justice and Home Affairs cooperation.

With Brexit, we will have fewer and fewer institutions to organise a joint and coordinated response from the UK and EU to the enormous challenges we face in the world.

Seen from a German perspective, there are new and dangerous trends in the world that will decide our future.

My greatest concern is the growing political instability in our neighborhood: From Ukraine to the eastern and southern rim of the Mediterranean; Inter-ethnic and inter-religious conflicts feed seemingly endless civil unrest and even wars, which cause migratory flows on an unprecedented scale and enormous human suffering.

These regional conflicts have spawned acts of terrorism in the very heart of European nations and in all probability will continue to do so, despite the military defeat of ISIS.

Another disturbing phenomenon of our time is the apparent return of the rule of strongmen all over the world.

Political systems built on complex balances of power and which take account of minority views are losing attractiveness in many parts of the world.

Populists campaign on the formula of sacred egotism and their ideology can be contagious; even more so if the economic situation should one day deteriorate again.

In short, it is a more and more dangerous world we are facing, with conflicts more diverse than before, ranging from trade wars to cyber wars, from terrorism to nuclear proliferation, from hybrid warfare to religiously motivated Jihad and civil unrest in deeply divided societies.

Immanuel Kant’s dream of Perpetual Peace, or Francis Fukuyama’s vision of the “end of history” seem today more remote than ever. Building a rule-based global order instead of the rule of the strongest has lost some of its political appeal in many places.

In a nutshell: The efforts that began after the WWII to build a global democratic order built on the rule of law are on the retreat in many parts of the world, where the dominant trend points either to anarchy and civil war or authoritarian rulers.

And what of the economic world order? I fear, that here too, liberal ideas are on the retreat.

Globalisation, which broke down trade barriers across the globe, has lifted almost 1bn people out of poverty over the last decades.

But Globalisation may have seen its peak. Again, the basic idea behind Free Trade Agreements was to create a rule-based system: The weaker would find protection from the stronger through the rule of law. Global regulation, of course, requires a global consensus, which is harder and harder to achieve.

The ground rules of trade respected by the vast majority of countries are those of the WTO.

They remain, however, rather rudimentary, as practices differ among countries and regions. Different cultural approaches to dealing with risk lead to different legal and regulatory universes.

So the trend of the last decades has been the creation of regional economic zones, like the EU, NAFTA, Mercosur, ASEAN that reflect their own cultural, legal and economic traditions.

China stands out as such a universe of its own. Efforts have been made in recent years to create conduits between these economic universes through free trade agreements. Examples are TTIP, TPA, CETA.

In such modern FTAs, tariffs play only a minor role. ‘Modern’ FTAs like CETA or TTIP instead focus on how to make standards and regulations between zones with different legal and economic traditions more compatible.

Clearly, such a system requires courts of arbitration which necessarily limit the exercise of sovereignty for each participating state. This loss of sovereignty, which limits the powers of national parliaments, was very much at the heart of public criticism of TTIP and CETA in continental Europe.

Ladies and Gentlemen,

How might these major trends in our political and economic world today influence and reinforce each other?

First, I fear that the trend to greater global economic integration has halted, even gone into reverse.

Growth in world trade is already below GDP growth. Regional Free Trade Areas like NAFTA are under threat, TPA is dead, the EU faces Brexit.

I would even include recent efforts to question the Paris Agreement on Climate Change in the list.

This trend of economic populism, however, will probably have a large impact also on political trends in large parts of the world.

In future, developing countries may find the avenue to export-led growth, which drove the economic miracles of Japan in the 60ties, South Korea in the 70s and China in the 90s and early 2000s, harder to follow.

I also see an unholy alliance between political destabilisation, as we can see, for example, in large parts of the Middle East, and a downwards spiral for the economic development of these countries. 

And I in particular fear that the political force of populism, which builds on the concept of national egotism, is fertile ground for protectionism even in the Western world.

So let me quickly sum up.

The world around us is rapidly getting more dangerous, as the much hoped for concept of global rule of law loses ground against national egotism.

When everybody shouts “My country first”, the space for a complex global division of labor with all its positive effects on productivity will shrink.

Populism will ultimately breed more protectionism.

There is a strong argument to be made for more, not less cooperation among us.

I am not saying that every directive emanating from Brussels was perfect.

But it reflects a compromise between different national preferences, which create the necessary level playing field for modern, highly specialised trade in highly regulated goods and services.

Ladies and Gentlemen,

Forgive me for being so gloomy.

I will try to cheer you up by briefly describing what our two countries, the United Kingdom and Germany, have achieved together over the last years and what is at stake if we choose separation instead of cooperation.

Our economies are deeply intertwined. 15,000 German companies are doing business in the UK today; total German FDI here is worth almost 100bn Euros, with more than 400.000 jobs created.

Together, we are part of a complex web of production chains: 39% of British automotive exports were previously imported as parts from Germany.

Germany is the UK’s second biggest export market for goods; the UK ranks third for German exporters.

Germany and the UK are each other’s prime partner in Horizon 2020 international research collaboration.

Almost 58,000 scientific articles were co-authored between the UK and Germany between 2011-15.

That means we are each other’s second most important co-authorship partner after the US.

Our cultural life is closely interwoven.

Neil MacGregor is Director of the Berlin Humboldt-Forum, Hartwig Fischer runs the British Museum.

3,3 million Germans visited the UK last year, 2 million British tourists came to Germany.

These are just a few examples that show how strong our partnership has grown over the years as members of the EU.

I believe that we must strive to defend that close cooperation, also in the future.

As I said at the beginning, we Germans accept the British decision to leave the EU, although we regret it. 

After Brexit, we will have to work hard to find a new basis for our close cooperation.

This will have to include a fair way to settle the mutual financial obligations we have entered into previously.

Let me assure you that there is a lot of good-will towards the UK in Germany.

But we should not give in to the temptation to start a mutual blame game.

Politics – and economic policy in particular – is the art of the possible.

There are nuances, but we have much in common!

We are not as different in our culture, tradition, view of the world as some say.

Germany and the UK must find a way to cooperate in a more violent world – after Brexit too.

© German Embassy London