 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
Economic and trade relations between the U.S. and Europe have not been at their most harmonious lately, as the media has copiously documented. We are at odds over a number of issues, from bananas to beef to aircraft engines to privacy. So our two perspectives need reconciling -- and that ' s not always an easy task. Early in the century, French Prime Minister Georges Clemenceau said, A America is the only nation in history which miraculously has gone directly from barbarism to degeneration without the usual interval of civilization. " A few years later, the great American humorist Will Rogers was uncharacteristically acerbic in his assessment of Europe . A That ' s one good thing about European nations, " he said, A They can ' t hate you so bad they wouldn ' t use you. " Will Rogers offered another, more balanced comment on the relationship, writing, A Headlines in papers say: > Europe criticizes U.S. ' If memory serves, we haven ' t complimented them lately ourselves. " That was in 1924! And those are far from the worst verbal assaults aimed across the Atlantic from either side, since Europeans first settled over here. Yet, here we are standing shoulder to shoulder in Kosovo, as we did during 40 years of Cold War. The recent actions of NATO in Kosovo -- and NATO ' s upcoming 50th anniversary -- underscore the commonality of our interests, and the critical importance of our continued bonds. For many decades, security cooperation has been seen as the bedrock of our relationship with Europe . But our economic ties are no less fundamental.Look what we have built together just since World War Two. The World Bank, the IMF, and GATT -- now the WTO -- are overwhelmingly U.S. and European creations. Tariffs between the U.S. and Europe have fallen by 90 percent over the past half-century. Together, we have set standards of market access, intellectual property rights and dispute resolution that have spread around the world, and formed the basis for today ' s bounty of international commerce. The U.S. and Europe have been the twin pillars of a post-war prosperity that has seen world trade grow 15-fold, production quadruple and average per capita income around the globe double. Today, the U.S.-EU commercial relationship is the largest in the world, by far. Counting two-way export and corporate affiliate sales, it ' s about one-and-a-quarter trillion dollars. Europe is twice as large a market for U.S. companies as Canada and Japan combined. American companies in Europe , if aggregated, would represent the fourth largest economy on the continent. Nine million Europeans work for U.S. firms. And the scale of European investment in America is just as great -- $145 billion, connected to $900 billion in annual sales. One out of every 12 U.S. factory workers is now employed by a European-owned firm. The EU market remains the most important one for U.S. firms. That is particularly true in light of the global economic crisis -- and even as the slowdown hits Europe . Size matters. If the EU grows by only 2 percent this year, its market will still expand by something like $150 billion. But this slowdown has been a source of concern. It has given Europe a competitive advantage in the pricing of their exports, which concerns me. Over the past twenty years, our trade flows with Europe have been extraordinarily well balanced, evening out over time. But we now have a growing trade deficit with Europe . The deficit in the 15 EU countries grew a whopping 80 percent last year, exceeding $26 billion -- compared to a $16 billion surplus in 1991.That ' s why we welcome the recent reductions in European interest rates. They signal that Europe intends to grow by encouraging domestic demand and not just through exports, which would only aggravate the deficit. The fact is, the U.S. and Europe are united -- bonded -- both by a shared cultural heritage and profoundly similar political and economic interests. We share so much, and agree so often, that our disagreements are often magnified. It is like a healthy marriage. We each are so confident of the basic good will of the other that we never hesitate to air our grievances and squabbles. In that spirit, I would like to examine some of our differences, the reasons for them, and what we are doing about them. Importantly for this conference, these differences often involve regulatory issues. Our economies have grown so close together that I sometimes visualize them as finely meshed gears. Even small issues, like grains of sand in a gearbox, can cause terrible noise and threaten to wreck the machinery. And increasingly the sand in the gears is regulatory. There are two reasons for this. First, tariffs and quotas between the U.S. and Europe have declined dramatically. As a result, the trade barriers are more likely to be standards and regulations. Second, as the nations of Europe try to build a single market, they are increasingly taking unilateral regulatory actions that -- deliberately or not -- can adversely affect other countries. And undermine international bodies such as WTO, ICAO and ITU.
|