TCS Daily


Transatlantic Trade-Off

By Craig Winneker - June 23, 2006 12:00 AM

BRUSSELS -- Not surprisingly, press coverage of this week's visit by US President George W. Bush to Vienna for a summit meeting with EU leaders focused on what divides Europe and America -- especially the effort by European governments to convince Bush to close the military detention facility in Guantanamo Bay, Cuba. Other disputes, over agricultural subsidies and airline passenger data privacy, also made the headlines. And, of course, television news programs made sure to show the hundreds upon hundreds of protesters who always welcome the US President to European soil. Friction sells papers, or so they say, and makes CNN look sexier. To the casual viewer, it would seem that America and Europe have some kind of serious rift-mending to do. The differences seem irreconcilable.

But here's what was missing from the headlines: Relations between the US and the EU are strong, getting stronger, and, with a few smart policy moves, could become really, really strong. The benefits would accrue not just to the governments in Washington and Brussels, but to the rest of the planet.

The stakes are high. It's been said often before but bears repeating: the US and EU are the most important trading partnership in the world. Their combined gross domestic product was an estimated $25 trillion in 2005. That's 12 percent of the world's population accounting for more than half of global GDP. People talk about the looming China and India economic giants, but that doesn't mean American businesses have given up on Europe. The old continent is still the number one geographical location for US overseas investment, accounting for nearly 56 percent of total US foreign direct investment. US investment in the Netherlands is roughly ten times the total US investment in China.

The money flows both ways. Investment by the European Union in the United States accounted for more than 60 percent of the $1.5 trillion in total foreign direct investment in the United States in 2004. Would you like an order of freedom fries with that?

Accordingly, not everyone was fretting the US-EU relationship this week in Vienna. "Ninety-nine percent of trade relations between the USA and the European Union are totally unproblematic, and we want to clear away the problems with the remaining one percent," said Martin Bartenstein, the Austrian economics minister, at a press conference on the margins of the summit. And Alexander Graf Lambsdorff, a Member of the European Parliament from Germany, considered the summit productive, despite the Gitmo flap. The meeting, he said, "focused on pragmatic cooperation rather than on vacuous rhetoric. Citizens on both sides of the Atlantic will profit from the renewed commitment to make the transatlantic market place work more effectively. Millions of jobs in America and Europe depend on the EU-US trade and investment relationship."

On the eve of the Vienna meeting, the Transatlantic Business Dialogue (TABD), a group of business leaders from 30 of the world's largest corporations on both sides of the pond, called for more progress on eliminating trade barriers. A new report released by the group makes a strong case for creating a transatlantic free trade area. It calculates nearly $500 billion in merchandise trade between the two sides in 2005, and notes that US investment in Europe and European investment in the United States directly supported some 12 to 14 million jobs on both sides of the Atlantic.

Specifically, the group of business leaders want to enhance regulatory cooperation to remove barriers to trade and investment (to avoid another REACH debacle); smooth the passage of goods and people while maintaining high security levels (to make it easier, for example, for executives to work abroad); enforce intellectual property rights (to safeguard and promote innovation); and converge transatlantic capital markets (to boost cross-border investment).

"If the summit also succeeds in giving a new impetus to drive the WTO to an agreement in the Doha Round, it would have struck a decisive blow for free and open trade and investment," said the TABD's co-chairman, Citigroup CEO Charles Prince. That may be wishful thinking, but it raises an interesting possibility: with all the hand-wringing over the fate of the Doha agreement, why shouldn't the two partners in the world's biggest trading relationship simply strengthen their hand by reducing their own barriers. In this case, would a good bilateral deal be better than a jerry-rigged global one?

If the obstructionists in the WTO continue to hold Doha hostage, perhaps it would be better to let Washington and Brussels get down to business -- even if no one else notices.

Craig Winneker is the Europe editor of TCS Daily.

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13 Comments

Only one direction to go...
I am delighted to hear that the United States relationship with the EU is improving. But let's face it: the current administration's (and therefore the US of A's) relationship was so far in the gutter in the EU based on the 'go it alone'/'don't give a damn' foreign policy attitude that the only direction it could go was up.

However one should keep in mind that as far as most of the people in the EU are concerned, the US government's reputation remains in the gutter.

That said, it is important to note that the administration is finally starting to recognize that its previous methods of diplomacy were a complete failure.

Now if only they can address monetary policy, the remainder of its foreign policy, energy, economics, pollution, ridding us of big government (the size of the US government has grown astronomically over the past 5 years), getting their massive spending under control, and ending corporate welfare (amongst many other areas of failure) we'll be in much better shape.

Here's something else that's missing
...from your account of the Vienna trip. Check out this backgrounder, from TomDispatch, on how Bush was delivered to Vienna in his own portable Green Zone:

"Here, then, is a description of Vienna as he entered it by Charles Bremner , a British reporter who has covered summits all the way back to Jimmy Carter's administration and finds the present security arrangements to have reached "absurd proportions." He writes:

"The centre of Vienna has been locked down since Bush's arrival on Air Force One last night. Streets are closed to traffic and parks and squares are locked shut. Bomb disposal squads are checking suitcases. The unusual quiet makes it feel like a prettier version of Soviet Moscow on the morning of the old November parades. Military helicopters are hovering over the Hofburg, the old Imperial Palaceā€¦ We are working alongside in the usual vast press centre inside a cordon of about 2,000 police. To enter means penetrating three cordons, with the right credentials. At two of them, they searched all my bags and asked me to show that my computer and mobile phone were real. Dogs then sniffed them, along with the laundry in my overnight bag."

Oh, and while humanity is cleared from the general area, the dogs are usually flown in from the U.S. along with snipers, hordes of security personal, a bevy of escort cars, masses of aides, even cooks."

Also noted is the fact that according to the latest Pew poll, 2/3 of Austrians now have a negative view of the United States. And in fact 36% of all Europeans view the US as being the greatest threat to global stability, while only 30% say that about the Iranians.

http://www.tomdispatch.com/index.mhtml?pid=95863

So what?
I don't see why protecting the President, the world's most desired assassination target, means anything.

As for the polls: well, you can either believe them or you can believe where Europeans put their money. EU/US trade is healthy and getting healthier. If they truly thought we were a threat I doubt they would invest in our partnership.

A "negative view" is obviously cast aside when you wish to invest and do business. They have the same view of Americans as I do of lawyers: I don't like them and I don't like a majority of what they do but I love them when I need them.

Please boys!
Trade with the US is just fine, mainly because all the important people in business remain rather untouched by the group hate campaign piled up in our news outlets. The business elite inform themselves through much more sophisticated channels and are hence much less prone to anti-americanism. The larger populace read the big evening newspapers and watch the major channels, and are hence more prone to group thinking and group hatred.

Don't blame the US for the fact that european journalism have left the enlightment behind.

So what indeed?
I see you would rather read puff pieces appearing in the media (aka the dreadful MSM) describing how swimmingly the president's trip went and how well he is loved by the peaceful peoples of Europe. If the results of a poll disagree with what you think the results should be, obviously it's the poll that is in error.

Do you think Pew is so backward they don't know how to conduct a poll? Or do you think it's a negligible issue when two out of three Austrians say they have a negative view of the United States?

The plain fact is that the views of business and the views of the general public are two different things. And if one has US dollars in his pocket he is highly likely to look for investment opportunities in the US rather than elsewhere. I don't think that translates to the scenario where all is rosy between us.

The gist of the article, by the way, was that in Europe as in the US, the president is insulated from public opinion so he can't see any test of the popularity of his programs. We acknowledge that any time he appears in public he must be protected from bullets. But we find it worthy of comment when he must also be protected from any hint of adverse opinion.

The group hate campaign
I'm intrigued. I assume when you say "our news outlets" you mean the American press and broadcast media? Or do you instead mean the European media?

In either case I'm not quite with you. Is there a "group hate campaign" directed against American business? Any help you might give me on the nature of this campaign would be useful.

How to be friends
When you come down to it there is really no intrinsic dispute between the 2 continents. America doesn't really want to run Europe (unlike some other parts of the world) so long as it is broadly capitalist. Europe doesn't really want to run America (though since it is more economicaly successful because more capitalist, Europe would quite like to saddle the US with Kyoto). So long as both sides restrain the urge to lecture each other & reject counter lectures we are perfectly capable of trading each other into increased wealth.

You talkin' to me?
>"I see you would rather read puff pieces appearing in the media (aka the dreadful MSM) describing how swimmingly the president's trip went and how well he is loved by the peaceful peoples of Europe. If the results of a poll disagree with what you think the results should be, obviously it's the poll that is in error."

Boy. Did you even read what I wrote?

I can't read "puff pieces" because the MSM does not write them about Bush. Even if they did, once again, who cares? Polls whether they are done here or done over there are worthless.

What is not worthless is the economics and wealth creation that is occuring between Europe and the US. If you wish to live by the illusion of polls you go for it. Illusions seem to be your preferred environment.

>"The plain fact is that the views of business and the views of the general public are two different things. And if one has US dollars in his pocket he is highly likely to look for investment opportunities in the US rather than elsewhere. I don't think that translates to the scenario where all is rosy between us."

Business and economics move people even if they don't wish to be moved. The public is business and business is public. The fact that Europeans do not have a high opinion of us means so very little when they are approving of the way we do business together.

I didn't say it was rosy. I said it was business and you don't do so much business with those you consider a threat or those you believe are untrustworthy.

Europeans bash us. Big deal. We bash the Europeans. Once again, big deal. At the end of the day we get together and make money for each other. Tell me Roy, do you like your boss? Any coworkers you dislike? Do you still work with them? If I have a successful team at work it doesn't matter to me that I would never go on vacation with them.

>"The gist of the article, by the way, was that in Europe as in the US, the president is insulated from public opinion so he can't see any test of the popularity of his programs. We acknowledge that any time he appears in public he must be protected from bullets. But we find it worthy of comment when he must also be protected from any hint of adverse opinion."

That is the gist of the article? That is what you got out of it? When you read you should read the actual words and not read into it what you desire to see as you seem to have done in this case. Bush knows what the polls say. He just doesn't care and shouldn't care. The election is the only poll a politician should care about. The days of government by poll watching (Clinton) are thankfully over.

Life according to Roy
Roy doesn't see bias in the media (unless it is rightwing).

Roy doesn't see liberal indoctrination in colleges (liberals are smarter anyway).

Roy doesn't see anti-Americanism in European media (abusing Americans is quite justified).

Once again, anti-American sentiment is popular culture abroad, and over here as well, but when they vote with their Euros they put them on the US.

roy objects to this president being protected at all
...

As you prefer
No need for petulance, we're just talking about two different subjects. I thought we were discussing the President's trip, as in how joyous his reception in Europe was. You're dwelling on how much wealth is being created, which I think is quite a separate issue.

And yes, the press was full of puffery over how he was cheered by the joyful peasants there.

"I didn't say it was rosy. I said it was business and you don't do so much business with those you consider a threat or those you believe are untrustworthy."

I couldn't begin to put this comment into the context of our conversation. I do business in the United States. Those I do business with are not threatening to me, nor are they untrustworthy. If they were I'd take my business across the street.

For what it's worth, I'm now retired. But when I was employed I always had bosses who understood me to be headstrong and not responsive to close instruction. That worked okay for a number of years. Then I turned to self-employment, which also worked well. I'm not much of a team player.

Roy's opinions
"Roy doesn't see bias in the media (unless it is rightwing)."

There's a lot of bias in the media. Everything they put out addresses what they see as the concerns and the mentality of Mr and Mrs Average American. This tends to assure that we'll be getting a bland presentation with a lot of fluff and very little analysis. They assume we're not too bright, easily swayed by sentiment and averse to thinking about anything that casts us in a negative light.

"Roy doesn't see liberal indoctrination in colleges (liberals are smarter anyway)."

Roy has'nt been inside a university classroom in forty years, but I do understand there's a lot of indoctrination going on. As for liberals being smarter, perhaps that was a poor choice of word. Let's say "less bone headed".

"Roy doesn't see anti-Americanism in European media (abusing Americans is quite justified)."

Roy doesn't read the European press much. But if you listen to the BBC you notice they're not above skewering politicans anywhere who blunder through their careers making things worse. Compared to the American media Roy thinks that's refreshing.

BTW, why is it that you like to refer to Roy in the third person. Aren't you addressing Roy? Or is your head actually turned to some hidden audience?

re
Hi,

our is europe, I'm european.

There is decidedly a group hate campaign directed against america and americans, in major european news outlets.

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