- 16 Feb 2015 8:00 AM
I understand it is quite rare to have both the U.S. Ambassador to Hungary and the Hungarian Ambassador to the U.S. in the same room – hopefully Réka and I are setting a new trend. I hope we are able to give you an insight into how each of us intends to pursue our respective goals to promote commercial relationships between our countries that strengthen the economies of both.
For me, the commercial relationship between Hungary and the U.S. is critical. As many of you know, since 1989, over $9 billion worth of U.S. investment has come to Hungary. I was fortunate to attend a ceremony celebrating the expansion of the Alcoa plant in Székesfehérvár a couple of weeks ago.
This and other expansions by U.S. manufacturers here testify that the investment climate in Hungary has great potential. Alcoa found a local community that could provide the skilled labor force needed to meet its manufacturing needs, and Székesfehérvár found an investor committed to playing a positive role in their community, both as an employer and a neighbor.
The U.S. Department of Commerce has just released trade figures for Fiscal Year 2014. Our two-way trade was up 35%, with 7% growth in U.S. exports to Hungary, and 28% growth in Hungarian exports to the U.S.! Total two-way trade is now over $7 billion. This is indeed impressive. But I think we can do better.
The U.S. provides Hungary with just slightly over 2% of its imports; likewise, Hungary only sends about 2% of its exports to the United States. Working with our Commercial and Economic sections at the Embassy, I will work hard to boost this two-way trade in the coming years. And with Ambassador Szemerkenyi in Washington, I know that I will have a partner in these efforts who sees, as I do, the opportunities before us.
New American investors typically know very little about Hungary and what it has to offer potential investors. Getting the word out about Hungary will be part of Ambassador Szemerkényi’s job in the United States, and I’m sure she will tell you about her plans in a few minutes.
But based on my own experience as an international businessperson --attracting investment is all about transparency and predictability. Companies need to be secure in the knowledge that when they set their business goals, plan how to reach them and make an investment - all under the rules today, those rules won’t be arbitrarily changed tomorrow. This is the number one thing that potential investors look for in any country.
In a globally competitive world, companies will compare one country to another when making decisions about where to invest, and typically, they will chose the candidates that have the most transparent rules, regulations, and tax regimes. Laws, rules and regulations of course sometimes need to change and adapt to new circumstances, but consultation with stakeholders is an important part of this process and without it, potential investors will go elsewhere.
I really believe that our commercial relationship has the potential to improve significantly if impediments and disincentives to doing business can be removed. Both Hungary and the U.S. have ambassadors who want to promote this relationship, and so you as businesspeople and your governments have energetic allies in this enterprise.
One opportunity that would help boost trade between the United States and Hungary is the Transatlantic Trade and Investment, or “TTIP”. You know, there’s been some misinformation in the Hungarian press recently about TTIP. The biggest misconception is that the Hungarian constitutional prohibition on genetically modified organisms would somehow be affected.
Well, I’m here to tell you: this has never been on the U.S. agenda. The United States and Hungary may have different views about GMOs, but we respect that Hungary has written GMO language into its constitution. Period. We’ve said this before, but it bears repeating: the treaty that the EU and the United States are working on must ultimately be approved by legislatures on both sides of the Atlantic. Neither side is interested in throwing away years of work crafting a treaty that would not ultimately be ratified.
The other bit of misinformation is that such trade agreements primarily benefit the United States. Nothing can be further from the truth –Americans understand that you can’t have sustainable trade relationships unless both sides see clear benefits. Let’s look at NAFTA for instance.
In the 20 years since NAFTA’s inception, trilateral trade has grown from $290 billion in 1993 to $1.1 trillion in 2013. Mexican agricultural exports to the U.S. have tripled over the last 20 years, and Canada has added 4.7 million new jobs. There are endless statistics that show NAFTA has not been a one-sided benefit to the United States, but a total win-win-win for all three countries.
We believe the same will be true if TTIP becomes a reality, and Hungarian businesses stand poised to benefit.
Ladies and gentlemen, let’s work together to expand and enhance the bilateral commercial relationship between our two countries to enhance our mutual prosperity. AmCham can play a crucial role in facilitating this cooperation, and that’s why I have been honored to address this forum today. Thank you so much for the invitation, and I look forward to working with you in the months and years to come.
Source: U.S. Embassy Budapest
Photo: Ambassador Bell delivers her remarks. (Embassy photo by Attila Németh)