A stronger economic and political partnership for the 21st century
The European Commission is putting forward proposals with a view to drawing up a common strategy on relations between the European Union and the United States, starting with the economic aspects of the partnership. The overall objective is to boost transatlantic trade and investment, and economic growth. The main aim of these proposals is to strengthen existing cooperation within the transatlantic economic partnership of 1998 and provide new impetus to it in order to deepen the partnership further by launching new initiatives.
Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee of 18 May 2005: A stronger EU-US partnership and a more open market for the 21st century [COM(2005) 196 - Not published in the Official Journal]
The European Commission wants to give new quality to the economic partnership between the European Union (EU) and the United States. In this initial stage of reviewing a global partnership, which is designed to include a barrier-free market, the proposals in question focus mainly on trade and investment, the highest volume of which worldwide is generated as a result of the relationship between the EU and the United States. In 2003, trade in goods and services came to almost EUR 600 billion and related principally to foreign direct investment (FDI).
The Commission's proposals form the basis for boosting growth and employment while respecting sustainable development and removing the barriers to trade and investment. They also seek to provide a new framework which can be used to meet common challenges such as international competition.
Improving the functioning of the transatlantic partnership
The Commission is proposing a number of initiatives in order to improve the functioning of the transatlantic partnership in three areas: regulation, knowledge and innovation, and border control.
The initiatives relating to regulation are based principally on policy cooperation, which is to be extended to a greater number of sectors in order to promote the transatlantic market. Policy cooperation within a well-defined regulatory framework is designed to guarantee fair competition in a situation in which the volume of trade is high, and forms part of the efforts to ensure a high level of consumer protection.
However, a certain degree of flexibility is needed in view of the difficulty of using the same model for all the sectors concerned. Cooperation can also vary in intensity, ranging from the exchange of information to the adoption of binding standards and including the establishment of ties on a formal or informal basis.
Other regulatory initiatives to strengthen cooperation between the two parties should also be envisaged in order to eliminate barriers to trade and thus promote competitiveness. They include the following:
- facilitation of investment, in particular by eliminating ownership restrictions in the United States;
- competition policy for those concerned based on the coordination of enforcement activities and the exchange of non-confidential information in an appropriate framework;
- the opening-up of procurement markets between the United States and the EU despite the barriers which EU companies still face when trying to access the American market; this calls for the deepening of relations between the two partners at bilateral level and the definition of a clear framework at multilateral level, such as within the World Trade Organization (WTO);
- the negotiation of a comprehensive agreement on aviation services between the EU and the United States, which are currently confined within a regulatory framework reflecting the political and technological landscape of the 1940s; an agreement of this kind would provide a sound economic and legal basis for transatlantic air services;
- maritime transport, which carries 90 % of all international trade: cooperation in this field should be strengthened and could include issues such as the law of the sea, data exchange, maritime security and environmental protection;
- financial markets: access to capital is fundamental to investment and innovation, which is why functional equivalence should be encouraged in various financial areas, such as accounting standards and insurance, and should be promoted and strengthened in order to achieve true integration of the European and US financial markets;
- the free movement of persons is essential: it has not been fully achieved for nationals of certain Member States or for companies and their affiliates; the possibility of granting affiliates the special status of "trusted persons" should be examined in order to facilitate international movement of travellers while bearing in mind security procedures;
- the mutual recognition of professional qualifications should be encouraged, particularly in economic sectors.
Initiatives relating to knowledge and innovation will contribute fully to the growth and integration of the European and US economies. They relate to the following:
- new technologies. as regards information and communication technologies (ICT) between the EU and the United States, coordination of the regulators, going beyond EU-US dialogue on the information society, should be strengthened in order to prevent the emergence of new obstacles in a rapidly evolving area; with regard to space, a structured dialogue should take place covering key areas such as Galileo and GPS, and the elimination of barriers to the creation of a properly functioning transatlantic market for the space industry;
- the protection of intellectual property rights as a fundamental economic objective shared by both the EU and the US: the strengthening of cooperation in this area involves efforts at domestic and international level to combat counterfeiting and piracy; it also involves observance of the standards established by the WTO;
- research and development: as these are key elements of the renewed Lisbon programme and generate growth, they will be the subject of greater cooperation between the two partners under the 7th framework programme for research and development (7th FPRD) in areas such as industrial materials, fuel cells and biotechnology;
- energy: the EU and the US should work together more closely by means of policy dialogues in order to face new challenges and find alternatives to traditional energy sources, such as by developing clean technologies and renewable energies;
- higher education and vocational training: as the current agreement on higher education and vocational training expires at the end of 2005, it should be renewed and reinforced in order to promote exchanges of university teachers, researchers and students and develop measures on issues concerning the quality and compatibility of education and training systems.
New security measures for border controls were imposed in the aftermath of the attacks of 11 September 2001. The Commission feels that the right balance must be struck between heightened security requirements and the continuation of open and secure trade and passenger transport.
While reconciling trade and security requirements, the transatlantic market will be based mainly on the principles of reciprocity and mutual recognition. These principles will apply to the following areas:
- implementing the agreement on enhanced customs cooperation in the area of transport security, for example with regard to the concept of single points of access and e-customs;
- exchanging best practice in order to achieve equivalence between the European concept of "authorised economic operator" (AEO) and the US Customs-Trade Partnership Against Terrorism (C-TPAT);
- avoiding duplications of controls which arise from the application of parallel sets of - sometimes contradictory - existing standards;
- reducing the risk of trade barriers associated with the implementation of the new US law to combat bioterrorism;
- developing global security standards, notably by promoting the security standards agreed between the EU and the US through the World Customs Organization (WCO), the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO);
- combating corporate fraud, money laundering, tax evasion, corruption and the financing of terrorism.
Political involvement essential
The New Transatlantic Agenda (NTA), which was established in 1995, should be renewed. Its most important goals have been achieved regarding the intensity of exchanges between the EU and the United States on a vast range of subjects. Regular dialogue has been established between interlocutors who previously had very little contact. There has also been increased cooperation on foreign policy issues.
However, economic cooperation has had a limited impact, particularly with regard to the legislative and regulatory involvement of the stakeholders. In the same way, the EU-US dialogue has suffered from a relative lack of political commitment, with the EU sometimes being poorly understood.
This is why none of the economic initiatives presented in this communication can be successful without real political intent translated into practical action. This could include the following, for example:
- a high-level regulatory cooperation forum, which would meet before EU-US Summits and submit an annual roadmap with appropriate objectives and priorities;
- a dialogue between European and US legislators on the priorities for regulatory cooperation;
- cooperation to address joint concerns regarding international policy or even to advance bilateral proposals in international fora;
- the conclusion of binding sectoral agreements.
For them to have a full impact on dialogue, transatlantic relations should be more strategic and effective in order to realise a shared vision of a more democratic, peaceful and prosperous international order. A new transatlantic declaration could be drawn up underlining the values and developing the priorities of joint action based on the recognition of the economic interdependence of the United States and the EU.
This communication is in line with the "EU-US Declaration on Strengthening our Economic Partnership" (PDF), which was adopted at the EU-US Summit at Dromoland Castle (Ireland) in 2004, during which the parties concerned put forward ideas on how to strengthen transatlantic economic integration. Reviewing and strengthening the partnership in this way can lend new impetus to relations between the EU and the United States.
The Commission is proposing that an economic declaration be adopted and that political oversight be put in place to ensure that these commitments are effective, particularly through the adoption of binding agreements.
Moreover, prior to the drawing up of a joint economic declaration, a public consultation was launched by the Commission in 2004 in order to identify the areas with which the present communication deals.
EU-US Declaration, of 20 June 2005, at the Washington Summit: "Initiative to Enhance Transatlantic Economic Integration and Growth"
The EU and the United States declared that they wished to remove the impediments to trade and investment and enhance growth and innovation with a view to making further progress towards integration of the transatlantic market and providing more opportunities for businesses.
In the Declaration, the two partners listed ten points covering areas in which action should be taken and which are dealt with in greater detail in the Initiative annexed to the Declaration:
- promoting regulatory cooperation and standards by identifying cooperation and coordination mechanisms in order to improve regulatory quality and reduce divergences; exchanges of experience and the sharing of knowledge are encouraged through a high-level dialogue in accordance with the roadmap for EU-US regulatory cooperation (PDF) and through a high-level forum bringing together regulators representing both partners;
- stimulation of open and competitive capital markets in order to ensure that transatlantic financial markets operate seamlessly; the main areas for action include efforts to combat financial fraud and money laundering, the reform of financial markets and the improvement of dialogue on macroeconomic and structural issues of common interest;
- spurring innovation and technological development, which are a source of growth and prosperity, by promoting cooperation, for example, in basic research, space research, nanotechnologies, transport, cyber-security and IT; the initiatives would affect sectors relating to higher education and vocational training, commerce, information and even medicine;
- enhancing trade, development and security by strengthening customs cooperation in order to ensure the security of persons and goods in transit; in this regard, the WCO already offers a framework of standards on the security of world trade; cooperation between the two partners should also be strengthened by adopting security standards, particularly as regards air cargo traffic, improved cooperation in research and development of security-related technologies, better compatibility of the EU's Authorised Economic Operator concept and the US Customs-Trade Partnership Against Terrorism (C-TPAT), measures to facilitate business and tourist travel ("trusted persons" initiative) and a policy of reciprocal visa exempt travel for short-term stays;
- promoting energy efficiency, energy security, renewable energies and economic development and encouraging new clean energy technologies for sustainable and coordinated policies; the two partners also stated that they would support developing countries in this area;
- protecting intellectual property rights by actively combating piracy and counterfeiting, applying international standards and ensuring the efficient application of standards on patents;
- facilitating investment by providing efficient, comprehensive and easily accessible information on investment regimes and policies and by removing existing obstacles;
- improving coordination on competition policy and the enforcement of competition rules, in particular by exploring ways of exchanging confidential information, which does not currently take place;
- strengthening coordination and cooperation on procurement;
- encouraging cooperation in the field of services, in particular with regard to aviation services and the mutual recognition of professional qualifications.
Responsibility for implementing these initiatives and establishing the work programmes lies with the senior levels of EU and US government, with progress to be reviewed at the EU-US Summits. At the same time, cooperation between legislators and stakeholder consultation will also be encouraged in order to help strengthen the partnership.
Last updated: 19.06.2006