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Background EU-US relations have been on a somewhat bumpy ride in recent years with disagreements over issues ranging from the Iraq war to the Kyoto climate treaty and the International Criminal Court. With the election of Barack Obama as US president, the EU thought EU-US relations would take a different turn. But a recent series of events have shaken EU-US relations even further. Brussels was disappointed when the US administration announced reform of its banking system, unilaterally undercutting discussions within the G20 Financial Stability Board on coordinating regulation on financial services. To make matters worse, Obama decided not to attend the annual EU-US summit in Madrid in May as he had more urgent matters to deal with at home. Convergence seems weak on issues related to combating terrorism. In February, the European Parliament rejected the SWIFT agreement on banking data transfers to the US. http://euractiv.com/en/foreign-affairs/eu-us-iron-out-differences-november-summit-news-496924
Background, cont. November 20, 2010 with European Commission President José Manuel DurãoBarroso and European Council President Herman Van Rompuy. In October 2008, at the peak of the financial crisis, world financial leaders agreed to take “exceptional action” to stabilize the global financial system. The United States and major EU countries went on to cut interest rates, provide financial assistance to major banks, and stimulate their economies with public funds. These actions not only averted a more severe downturn, but also demonstrated the capacity for trans-Atlantic cooperation under duress, economists say. “The point of a convoy is to get all the ships in the flotilla to their destinations safely, and our economies are not yet fully out of the dangerous open waters,” - Adam Posen of the Peterson Institute and Jean Pisani-Ferry of the Brussels-based Bruegel research group The U.S.-EU “convoy” should at a minimum coordinate a few key objectives, including not intervening to depreciate their currencies and planning “exit strategies” from fiscal stimulus plans in the medium term.
EU27 trade in goods with USA(in millions of euro) “Put simply, we are each other’s closest partners. Neither Europe nor the United States can confront the challenges of our time without the other. These summits are thus an opportunity to deepen our cooperation even further and to ensure that NATO — the most successful alliance in human history — remains as relevant in this century as it was in the last. That is why we have a comprehensive agenda at Lisbon.”- Obama “We are united in our effort to protect our people and promote global security by combating terrorism and preventing the proliferation of weapons of mass destruction,” read the White House release. “Together we advance the ideals of democracy and human rights that are essential in free societies.” EU-US Relation http://europa.eu/rapid/pressReleasesAction.do?reference=STAT/10/174&format=HTML&aged=0&language=EN&guiLanguage=en
Some of the Issues Discussed Internet privacy Genetically modified food products Financial regulation Boeing and Airbus The most critical area for EU-U.S. economic coordination is the longstanding issue of China’s undervaluation of its currency, according to Bergsten.
Barriers to Trade Tariffs Food products Textiles Footwear Leather goods Ceramics Glass Railway cars Wood, paper, and pulp Non-Tariff Barriers Regulatory Divergences Registration, Documentation, Customs Procedures Import Prohibitions Levies, Charges and Import Duties Sanitary and PhytosanitaryMeasures Public Procurement Trade Defense Instruments Subsidies Intellectual Property Rights
Joint Statement Today we focused our discussions on three key areas of cooperation that are of vital interest to our citizens: first, how to ensure strong, balanced and sustainable economic growth and how to create jobs, including in new, emerging fields; second, how to meet global challenges such as climate change and international development; and third, how to strengthen the security of our citizens. Economy Contribution the European Union and the United States can make to securing a sustainable and balanced recovery Fiscal consolidation Creating jobs through structural and financial market reform. Reject protectionism We reiterated our strong commitment to direct our negotiators to engage in across-the-board negotiations to promptly bring the Doha Development Agenda to a successful, ambitious, comprehensive and balanced conclusion. We also agreed to coordinate efforts to encourage emerging economies to assume responsibilities and adopt policies commensurate with their growing economic strength and role in areas such as trade, protection of intellectual property, regulation, and investment policy. Global Security Terrorism, Israel and Palestine, Sudan Energy Security Climate Change Copenhagen reduce greenhouse gas emissions. Cancun conference mitigation, transparency, finance, adaptation, Technology Forests Emissions reduction by all major economies Development and Aid
Obama’s Statement First, we agreed to take a series of steps to increase trade and investment, which already amounts to a $4.4 trillion relationship and supports millions of jobs on both sides of the Atlantic. We directed our Transatlantic Economic Council to focus on streamlining regulations, encouraging innovation, eliminating barriers that hamper trade and investment. And building on the progress of the G20 summit in Seoul, we reaffirmed the need for currencies that are market driven and for countries with large surpluses to boost domestic demand. Second, we reviewed our close security cooperation. We saw, with the recent security alerts in Europe as well as the plot that was disrupted to detonate explosives in cargo flights, that we have to work every day to keep our citizens safe, and we will continue to do so. Finally, we’re coordinating on a series of global issues. With regard to climate change, we directed our U.S.-EU Energy Council to find ways to bring clean energy technologies to market faster, and we’re standing by our Copenhagen commitments to reduce emissions as we work towards Cancun.
Proposals Proposal One Non-Tariff Measures in EU-US Trade and Investment For the EU, removing all actionable NTMs would translate into an increase in GDP (€122billion per year) and exports (+2.1%). EU Benefits Motor vehicles Chemicals Pharmaceuticals Food Electrical machinery For the US, benefits from removing actionable NTMs are estimated at €41 billion per year for GDP and 6.1% for exports. US Benefits Electrical machinery Chemicals Pharmaceuticals Financial services Insurance sectors The US gains more in exports and the EU more in income. Cons: The study weakens the argument for a Transatlantic Free Trade Addressing regulatory issues instead of cutting tariffs in EU-US trade relations. Proposal Two Lower Tariffs on goods traded between the US and EU Pros Ease trade between EU and US Cons Loss of income http://trade.ec.europa.eu/doclib/docs/2009/december/tradoc_145612.pdf
References Baker, L. (n.d.). EU-U.S. to hold summit in Portugal in November | Reuters . Business & Financial News, Breaking US & International News | Reuters.com. Retrieved November 21, 2010, from http://www.reuters.com/article/idUSTRE67G30P20100817 Comenetz, J. (2010, October 18). Economists: U.S.-EU Economic Cooperation Must Continue. America - Engaging the World - America.gov. Retrieved November 29, 2010, from http://www.america.gov/st/business-english/2010/October/20101018162622bocaj0.7578394.html Comments by President Van Rompuy and President Barroso on the eve of the EU-US Summit. (n.d.). Europa. Retrieved November 21, 2010, from www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/117887.pdf EU Calendar - EU-US Summit. (n.d.). EUROPA Ã¢Â€Â“ The official website of the European Union. Retrieved November 21, 2010, from http://europa.eu/eucalendar/event/id/2656-euus-summit/mode/standalone EU-US Summit Lisbon 20 November 2010 Joint Statement. (2010, November 20). Europa. Retrieved November 21, 2010, from www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/117897.pdf EU-US to iron out differences at November summit | EurActiv. (n.d.). EurActiv | European Union Information Website (EU and Europe). Retrieved November 29, 2010, from http://euractiv.com/en/foreign-affairs/eu-us-iron-out-differences-november-summit-news-496924 EUROPEAN UNION ~BACKGROUND. (n.d.). ConsiliumEuropa. Retrieved November 21, 2010, from www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/er/117785.pdf European Commission : Trade : United States (Bilateral relations). (n.d.). EUROPA - European Commission - Homepage. Retrieved November 21, 2010, from http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/countries/united-states/index_en.htm Commission. (n.d.). USA Barrier to Trade and investment report 2008. Europa Trade. Retrieved November 29, 2010, from trade.ec.europa.eu/doclib/docs/2009/july/tradoc_144160.pdf NTMs in EU-US Trade and Investment- An Economic Analysis- Highlights of the Study. (2010, December 18). Europa Trade. Retrieved November 29, 2010, from trade.ec.europa.eu/doclib/docs/2009/december/tradoc_145612.pdf Newsvine - EU wants tighter online privacy. (n.d.). Newsvine - Get Smarter Here. Retrieved November 21, 2010, from http://www.newsvine.com/_news/2010/11/04/5408575-eu-wants-tighter-online-privacy President Obama on Ã¢Â€ÂœEurope and America, Aligned for the FutureÃ¢Â€Â. (n.d.). America - Engaging the World - America.gov. Retrieved November 29, 2010, from http://www.america.gov/st/texttrans-english/2010/November/20101119093346su0.1445996.html Statement by President Obama After EU-U.S. Summit in Lisbon. (n.d.). America - Engaging the World - America.gov. Retrieved November 29, 2010, from http://www.america.gov/st/texttrans-english/2010/November/20101120175047su0.6640981.html ROMPUY, H. V. (2010, November 20). Remarks by Herman VAN ROMPUY, President of the European Council, following the EU-US Summit. Europa. Retrieved November 21, 2010, from www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/117896.pdf