 Good afternoon. You're all very welcome. My name is Peter Gunning. I'm a member of the Institute and of the future of Europe group here. It's a great pleasure for me personally and an honor as well to introduce a personal friend and an Irishman who has had a terrific stellar career in the administration of the European Union over the years. Ambassador David O'Sullivan, currently the EU's ambassador in Washington. David is a one-time colleague of mine in the Department of Foreign Affairs. In the EU, which he joined back in I think the late 70s, he has fulfilled a very wide range of posts, including in a number of cabinets, notably that of President Prody. He has been director general for trade in the European Commission. He has been secretary general of the Commission, and he has been the chief operating officer of the European External Action Service. And is now, since 2016, the EU's ambassador in Washington, D.C. I'm not going to go through the rest of David's illustrious CV. Many of you will know some of that already. But and his time is relatively short here today. But I will say that he's been a consistent friend and supporter of this Institute for International and European Affairs and has spoken here on a number of occasions. Most recently in I think 2015 and 2016 on both occasions on the state of EU-US relations as they were then. And in light of the circumstances that pertained then, he has a rather different set of circumstances to address now. I see that his talk is entitled Crisis or Opportunity in Transatlantic Relations. I'm not sure whether that's out of a concern for even-handedness or a sense of irrepressible optimism. But it is hard to see the opportunity. But without further ado, I'll hand over to Ambassador Sullivan to give his take on this transatlantic turmoil and what it will become. The usual rules apply. David Sullivan's address is on the record. And Chatham House Rules will apply to the question and answer, which will follow in about 20 minutes time. Thank you. Well, thank you very much, Peter. And ladies and gentlemen, great pleasure to be back here. Indeed, Peter is an old friend and colleague. We live next door to each other in Rue Langeveld. Used to take each other's kids to school, which is the ultimate bonding experience. And I'm delighted to be back with the Institute. I do indeed think this is a remarkable institution in Ireland, performs a remarkable job and I know you're under my cross. You're doing this reflection on EU 27, the future of the EU. I'm always very grateful when people say they're studying the future of the EU because it means they think we have one. So it's deeply, deeply reassuring. The title, I suppose, is the last refuge of all speakers is to say crisis or opportunity. I think it comes from the notion that in Chinese there are two characters, one which is crisis, the other which is opportunity. I recently discovered this isn't true. They're both, they're both crisis. So I think the opportunity perhaps comes more from the optimism of the will. I saw an interview today with Madeleine Albright who said, was asked, was she an optimist or a pessimist? She said, I'm an optimist who worries a lot. So I think that kind of describes where I am these days. I remain optimistic, but I do, I do worry a lot. I think at my last times here, you know, I was able to present a very positive picture of transatlantic relations. We had had a great achievement in the Paris climate change deal. We in 2015, we had done the Iran deal through strong cooperation between the European Union and the United States. And then we were still, you know, sort of optimistic that I think I was relatively cautious that we might conclude a landmark trade deal between the European Union and the United States' T-Tip, perhaps towards the end of the Obama administration. Well, what a difference two years makes. The 2016 election changed all of that. And Katrina Perry is here, and I always give Katrina for more to give her the credit, which you can read about in her book. But she was one of the first people who said to me in the run-up to that election, I think Donald Trump will win. And that was very much against the run of opinion at that time. It was very perspicacious of her to have spotted that from her travels around. And this was indeed a very big shock to the establishment in Washington, certainly, frankly, to most of the diplomatic corps who had confidently predicted the alternative outcome. And of course, since then, the big question has been, what does what will this mean in terms of a change of administration? Is this just another change of administration from Democrat to Republican? Or is this something more dramatic or a more radical shift in policy? The question was, would President Trump be the same as candidate Trump? And for, I think, the last year or so, you know, there's been backwards and forwards on the extent to which there would be a fairly consistent message from the president. But now I think we see very clearly that, in fact, the president has been remarkably consistent with what he says as a candidate. He has withdrawn from the Trans-Pacific Partnership. That was one of the first things he did, signalling already his sort of skepticism about multilateral trade deals. He withdrew from the Paris climate change agreement. He moved the embassy to Jerusalem. He has withdrawn from the Iran nuclear deal. And we are now engaged in a fairly robust conflict over trade. I wouldn't yet call it a trade war, but it's getting there. It's a skirmish, I would say, for the moment, but it has the potential, unfortunately, to escalate. And I think what is perhaps slightly more worrying from a European perspective is that the president has also developed in the last few weeks a fairly consistent narrative of which is fairly critical of Europe. Basically drawing on the standard U.S. criticism, which is that we don't do enough to shoulder our responsibilities for our own security, specifically the defense spending, the 2 percent commitment of NATO members, but more generally the sense that somehow America is being taken advantage of by Europe in this context. And he now links this also to the trade narrative because he sort of says, well, actually, the Europeans had the benefit of the American security umbrella. This enabled them to develop social welfare systems, healthcare systems, and develop a big market behind barriers which were unfair for American exports. I mean, I'm slightly summarizing it, but that's basically the gist of the message. And I think this is, of course, deeply worrying from a European perspective. I mean, as always, some of this criticism is justified. I think on the security spending, we would say, yes, indeed, there is an issue there. I mean, it's a bit more complicated than the way it's sometimes put. But yes, we do not spend as much, or at least we don't get as much value. And Michel Barnier, before he became Mr. Brexit, when he was working as an advisor to Jean-Claude Juncker on defense matters, he produced an excellent paper on European defense, which showed that in fact we are the second largest defense, if you put the 28 budgets together, we're the second largest defense budget in the world. And we've something like 1.4 million people in uniform. The problem is that the output from that expenditure is a fraction of what it is in the United States, about 10 or 15 percent. Our ability to actually put boots on the ground in any given situation is much less than the expenditure would imply, which by the way is, I think, an important response what we're doing through the European Union initiatives in defense and security. So I think there's more sympathy for what is said about the defense expenditure, rather less, I think, on the trade and economic side, because frankly, I don't think that it can be said that the trade deficit, which undoubtedly America has in goods with the European Union, is the result of unfair trading practices. The European Union is one of the most open, one of the low tariff, rule of law economies in the world, as is the United States. There are certainly things which can be criticized about our trading policy, and equally, we find things that we could criticize about the United States. But none of this criticism would lead me to conclude that we're anything other than open and fair traders who benefit a lot from the exchanges we have. So I think that's a rather more complex narrative to discuss, but we have to accept that this is the narrative that's there. This is what the president feels is deeply the case, and this is what's led him to address the issue of steel and aluminium tariffs, and we are now facing something which could be a potentially major escalation, which would be using the national security provision to put tariffs on car and car part imports. Now there will be a very lively debate in the United States about these issues, particularly I think about the auto parts. If you look, for those of you interested, the submission of the U.S. Chamber of General Motors and others, many of them have introduced submissions which are highly critical, saying this would actually be counterproductive, this would be damaging to the U.S. economy. I don't know how this is gonna play out, we will see in the next months. President Yonker will be in Washington on the 25th of July as a follow-up to a first discussion which was held at the G7. I'm sure he will come with Cecilia Mellstrom in a constructive mood, trying to see if there are solutions we can find. We've proposed various options at various stages, a limited trade deal on industrial products only and government procurement. There may be other ideas there about some plurilateral negotiations, but I don't know whether this is going to, at this point, encourage the president to take a different view. I think we certainly engage as constructively as we can, but I do observe also that it's the factual debate. This is not a debate always driven by economic facts and figures, it's also driven by perceptions and by sentiment which we have to, I think, take into account. And I think one of the things that we need to think about in the implications for the transatlantic relationship is whether this is a temporary phenomenon, this is something, you know, President Trump has been elected, he has these views, maybe his views will evolve, maybe he will be a one-term or a two-term president, we don't know. I think it would be a mistake on the European side to think this is only about President Trump and his personality. It is also, there are changing opinions in the United States, a changing view of America's role in the world. Now, this is not necessarily that new, we've had this before if you go back to the post-World War I period when America went through a period of relative isolationism which only changed dramatically with the Second World War and then the embracing of the multilateral trading and finance system which America helped to create. So it's not necessarily something which we haven't seen before but I think there is some shifting of the tectonic plates and I think those of us who are committed to this relationship and who care about the relationship between Europe and the United States, we have to make an effort to try and understand that, not to the point of making concessions that we think are not justified or that are not domestically acceptable to us but I think we have to try and understand that there is a shifting perception that maybe the international system has not always worked to America's benefit. Now, many people in this room I think would say, no, that's clearly not the case. But we have to understand that this is felt by many Americans and they feel that somehow the globalization has left them behind, that the system has not worked very well to their benefit and they appreciate a president who says, I'm going to take a more robust position and I'm going to stand up for America first. Of course, I would argue that even the most forensic assessment of America's national self-interest would show you that Europe is an important partner, an important partner in security and an important partner economically and I think when you look at the numbers and Mark Redmond from the US Chamber is here, I mean, the numbers are mind blowing. The 70% of foreign direct investment in America comes from the European Union. The European Union is the biggest export destination for 45 out of 50 US States and American companies invested in Europe make 100 billion more than the equivalent European companies invested in the United States. So we have a very vibrant and I think actually relatively balanced economic relationship which it would be a shame to put in jeopardy. But having said that, we have to understand that something is happening. There's a shift. We don't yet know and it's far too soon to tell whether this will be a permanent shift in the US perception of the relationship with Europe. The ultimate test will be electoral. It will be the midterm elections. It'll be 2020 when the American people and they're the ones who count in this discussion will make their judgment as to whether they think the policies pursued by President Trump have delivered what they hoped for or whether they take a contrary view and it's probably too soon to tell. What is clear is the president is benefiting from a hugely positive economic situation in the United States and this is, if you like, cushioning to a certain extent people's maybe fear of a trade war because the economy is booming. We'll have to see how this plays out over time and whether that changes. So I think, frankly, we are in for a bumpy year or two in transatlantic relations. I think we have to accept that to be frank as I go through this sort of agenda. I see, as Peter says, not the pessimism but I see more of the problems than I see the solutions and I'm sure we will get to solutions at some point. On the climate change, I'm relatively optimistic because I think America Inc. has bought into the climate change agenda. When I travel around, I talk to governors, I talk to mayors in cities, I talk to business, they've got it. I think the kind of climate change agenda is almost irreversible. The business case is almost irreversible and I think that will continue. America could even exceed its Paris objectives, notwithstanding the fact that they have withdrawn from it. On Iran, I think we're heading into a much more difficult situation and I think particularly the issue of secondary sanctions and how this impacts on Europe's ability to live up to what it believes to be. Its commitments under the Iran deal will be something for further discussion and of course the trade issue is hugely complex and difficult. So I think we need a degree of strategic patience in this. Above all, I think we need to try and maintain a united European front. This is not always easy as we know in the European Union, the best of times and I say that not in any sense of oh we have to be united against but I just think where we are sure of our position and the rightness of what we're doing, we need to stick to it, we need to keep explaining and where we can find compromises, where we can find ways forward, we should be willing to do that and we should be creative about that as I'm sure President Junker and Cecilia Maelstrom will be. But above all else we have to understand that our greatest strength in this discussion is our unity and the fact that we are actually the largest single market in the world. We're a very important trading partner and our views need to be taken into account in a fair way. I nonetheless remain optimistic even if I worry a lot because I do think we have to go back to basics. The transatlantic relationship is absolutely fundamental. I've mentioned the economic and commercial side. I think you can say the same about the security and I know the President feels that Europe is not doing enough but frankly, Europe's security is America's security. America's security is Europe's security and that's just a fact. The only time Article 5 of the NATO Treaty has been invoked was when the Europeans invoked it and the Canadians invoked it after 9-11 and that sense of solidarity was shown then I believe would be shown in other circumstances. European soldiers have fought in Afghanistan and fought in Iraq so it is not as if we have not been a good ally of the United States and for most of our member states, the NATO Alliance is absolutely the cornerstone of their territorial defense strategy and I don't think that's gonna change but I think America also understands that the security of Europe is a vital element in their own security. And we still have the values agenda, democracy, human rights, okay, human rights, America's just left the human rights council in the UN so yeah, maybe we don't quite agree on some human rights issues at the moment but I still think when you travel around America and you talk with the good American people, we do share a huge amount in common in terms of values. So I think and I remain convinced that what unites us is much more important than what divides us but I do think we have to prepare for a fairly difficult period in which that thesis is gonna be tested and tested severely in coming weeks and months over the issues I've described. I think however my overall conclusion is that America is a very diverse country, very divided at the moment. This is part of the issue, I think, very polarized. We need to understand that and above all else, my last word, Peter, has got nothing to do with any of the things I've been talking about but I hope that we can keep the people to people channel of communication open. I worry a little about the fact that also with visas and everything else, people in Europe travel a bit less to the United States, people in Americans come a bit less to Europe. We need always to reinvent this relationship for each successive generation and that requires an effort of will, if I may say so. I mean, this doesn't happen, the Fulbright scholarship, the other achievements which move people across the Atlantic, we need to redouble and increase those efforts to avoid that all of these tensions which are there turn into a greater divide including on the values agenda which I think then we would be in deep trouble. So that's all I want to say by way of introductory remarks but thank you all very much for coming here and this warm indeed sultry afternoon and as I say, like Madeleine Albright, I worry a lot but I remain optimistic. Thank you. Thank you.