Bilateral trade disputes between the United States and the European
Union receive a great deal of publicity, but U.S.-EU cooperation
in liberalizing the global trading system is much more
important. Although several other countries played important
roles, the Doha Round would not have been launched in 2001
without the leadership of the United States and Europe. Similarly,
it would not have been possible to get the floundering talks back
on track in July 2004 without the efforts of the United States and
the European Union.
Most countries, in fact, including some that do not always
agree with us, now recognize that the European Union and the United States will have
to work together if the world is to move toward freer trade. That means that we have
an enormous amount of work to do. Fortunately, while we have our differences, the
United States and the European Union share many of the same fundamental goals for
the Doha negotiations.
The United States considers market
access, broadly defined, to be at the heart
of the negotiations. First and foremost,
we must deal with agriculture, for which
we have now established a negotiating
framework. To oversimplify somewhat,
the fundamental issues for the agricultural
negotiations could be defined as
follows: We have to agree on formulas
for reducing and eliminating tariffs and
for reducing domestic support for agriculture,
as well as on the timescale for
phasing out export subsidies. In all these
areas, we have to work out how the
poorer developing countries are to be
treated.
The United States obviously has its
differences with Europe, but we both
agree that there will have to be a package
that addresses these issues adequately.
The European Union has begun to rationalize
its farm policy by reforming the
Common Agricultural Policy. That is an
essential first step. But we now have to
see how those reforms will apply in the
Doha negotiations.
A big priority for both Europe and
the United States will be to improve
access for our farm products to key markets,
particularly in the advanced developing
countries. We share the same
objective for non-agricultural products -
manufactured, industrial and consumer
goods.
We need to address four elements
of market access in non-agricultural
markets:
- The formula for reducing tariffs.
- Sectoral agreements leading to the
complete elimination of tariffs. (These
are not universally embraced, particularly
by developing countries, but they
will be an essential part of the package
for the United State and the European
Union.)
- Reduction and/or elimination of
non-tariff barriers.
- Provisions for developing countries.
There should be some flexibility for
developing countries, particularly for the
poorest. That, however, will be extremely
difficult to achieve because not all developing
countries are the same. The more
advanced developing countries continue
to resist the idea of making distinctions
among developing countries.
We must also open up market access
for services, which represent the major
part of Gross Domestic Product in many
countries. In the United States, for example,
services account for about twothirds
of GDP and over 80 percent of
non-agricultural employment. The services
negotiations need to move forward
in tandem with those covering agricultural
and industrial products, and to aim
at equally ambitious goals. So far, however,
progress in the services sector has
been insufficient.
Finally, we must use the negotiations
to improve market access in the field of
trade facilitation. Even if tariffs and nontariff
barriers are dismantled, the entry
of goods into a market can be frustrated,
for instance, by customs procedures that
are opaque, arbitrary or tainted with
corruption.
There are other important issues
that will have to be included in the final
package. But Washington and Brussels
agree that the main focus should be on
these four major areas of market access –
agricultural and non-agricultural products,
services and trade facilitation.
These will be the core issues of the Doha
Development Agenda.
“There should be
some flexibility for
developing countries,
although it will be very
difficult to achieve”
The need for U.S.-European cooperation
in the Doha negotiations should
not, however, lead us to overlook the importance
of Transatlantic trade relations.
The expansion of the European Union to
25 members in May 2004 made the
Union the second largest U.S. export
market after Canada last year. The 25-
nation European Union is the largest
supplier of U.S. imports.
The scale of investment in both directions
across the Atlantic is stunning,
as are sales by affiliates of European and
U.S. companies in each other’s markets.
Sales by affiliates of European companies
in the United States amount to $2.8 trillion
a year, or six times the total value of
Transatlantic trade.We should make the
American public much more aware of
the huge number of jobs created by European-
owned companies in the United
States and of the enormous sales by the
affiliates of U.S. companies in Europe.
“We should improve the
management of our
relationship and seek
ways to deepen
Transatlantic
integration”
The high degree of integration of the
Transatlantic economy is the lynchpin of
our prosperity on both sides of the Atlantic,
and it means that we should work
harder on two broad aspects of our relations.
We should improve the management
of our relationship, and we should
seek ways to deepen integration further.
In addition to managing our approaches
to global negotiations, we should also
handle our bilateral disputes better. Although
these disputes concern only a
very small proportion of our overall
trade, they can still have an important
impact on Transatlantic relations. It is
extremely important that we are both
seen to be complying with WTO obligations,
and the United States has made
strenuous efforts to do so in a number
of cases.
Looking ahead, we need to consider
how to strengthen our ties. The U.S.-EU
summit meeting in Ireland in June 2004
agreed to conduct a dialogue with the
private sector as a way to generate an
agenda for the future. In the United
States, we have held intensive consultations
with the business community, from
which a number of ideas have emerged.
The European Commission and some
EU member states are engaged in a similar
process.We hope to put together proposals
for the next U.S.-EU summit
meeting later this year.
The main American aim in this regard
is to coordinate U.S. and European
regulatory regimes more closely. There is
a fair amount of anxiety in the United
States about over-regulation in Europe
in certain instances, chemicals for example.
Another problem, of course, is the
very complicated subject of trade and security
- how to find the right balance between
ensuring security and allowing
commerce to flow freely.
Nevertheless, I remain very optimistic
that the European Union and the
United States will work together over the
coming years at the global level, and that
we will manage our bilateral relationship
in a way that leads to greater prosperity
and improved competitiveness on both
sides of the Atlantic.We are really going
to need close Transatlantic cooperation
to tackle the global problems that we
shall be facing in the years ahead.
Peter F. Allgeier is the Deputy U.S. Trade Representative, responsible for supervising trade relations
with Europe, the Middle East,Mexico, Canada, Latin America and the Caribbean, and negotiations
in the World Trade Organization. He joined U.S. Trade Representative’s office in June
1980 as an international economist dealing with Asia, and has served in various positions under
seven U.S. Trade Representatives.
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