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Meeting of The European Institute with The Honorable Doug Bereuter, Chairman, Subcommittee on Europe, Committee on International Relations

Introductory Riarks by Jacqueline Grapin, President, The European Institute Tuesday, May 20, 2003

Mr. Chairman, Your Excellencies, Distinguished guests:

It is a special pleasure to gather this morning at the invitation of the Chairman of the House International Relations Committee Subcommittee on Europe. This meeting is part of the Special Program on the Renewal of the Transatlantic Relationship that The European Institute has initiated in light of the current tensions in the transatlantic alliance. Our goal this morning is to hear your comments on how you plan to address these tensions and to bring you the perspectives of The European Institute’s members, which include 23 European countries and Canada, and 73 U.S. and European corporations operating on both sides of the Atlantic.

Mr. Chairman, I must tell you that recently I have received many calls from both European and American corporations who are worried about short term attitudes being taken vis-à-vis each other in the U.S. and Europe. Many feel a need for a more fundamental medium-and long-term approach to the current rift, with the dissemination of serious information rather than threats or insults. In particular, there is deep concern that leaders on both sides of the Atlantic are not addressing the link between trade and security properly.

We should not ignore that 60% of the 2 billion dollars that enter the U.S. from abroad daily to finance the American twin deficits comes from Europe, or that there is more European investment in Texas alone than all U.S. investment in Japan. Although transatlantic trade disputes steal the headlines, foreign direct investment has become much more important than trade itself, which accounts for less than 20% of transatlantic commerce (U.S.-EU trade disputes account for less than 2% of transatlantic commerce). 58% of Corporate America's foreign assets are located in Europe, accounting for more than half of U.S. foreign affiliate sales, more than double comparable figures for the entire Asia/Pacific region. European firms have 2/3 of their total foreign assets in the U.S. There is no doubt that the U.S. and Europe are each other’s most important trade and investment partners.

The European Institute inaugurated his Special Program on the Renewal of the Transatlantic Relationship with a meeting at the Residence of the Ambassador of Austria, His Excellency Peter Moser, to discuss the conclusions of a study that will be published in The Institute’s journal European Affairs. Dr. Paul Luif, an Austrian scholar, analyzed the voting pattern in the UN General Assembly reflecting the positions of the members of the European Union over a period of 20 years and the differences among them. He also analyzed the positions of the New Europeans (candidate countries). Then he compared them with U.S. positions.

It appears that the members of the European Union, although they do not agree on everything, are increasingly agreeing on more issues and on nearly everything. The “New Europe” countries are aside from the first group; however their positions are coming closer to those of the EU. As they join, their positions are likely to come even closer. The statistics analyzed on the positions of these 2 groups, EU countries and “New Europe,” show that Europe tends to diverge from the United States. This is confirmed by the fact that, before the war in Iraq, there were 2 different Europes. Not the Old and the New, but the Europe of the people, which was surprised to find itself united, and massively against the war, and the Europe of governments, which was divided.

It is important to have this picture in mind to realize that denying differences will not be enough to manage tensions in the future. We will need new mechanisms to understand each other, to coordinate our actions, and to negotiate deals and compromises.

To prepare today’s meeting, on May 6, The European Institute convened a special meeting of its Boards and Members. If you allow me, Mr. Chairman, I will briefly summarize the conclusions of these discussions:

It was agreed that the transatlantic relationship was experiencing its most serious challenges in several decades. In regards to the question of whether we are facing the risk of a permanent separation or something more temporary, we agreed that the actual situation could be fixed, but only provided that a number of efforts are made on both sides.

One consideration was that the actual situation was reached in part as a result of specific and personal decisions made by various American and European leaders. There was a feeling that, if personal positions could create a rift, then personal positions could also undo the damage to a certain extent, as there are opportunities for President Bush, President Chirac, and all G8 leaders to do so in Evian and at the U.S.-EU summit in June. Congress, as well as the European Parliamentarians, may be able to put their weight behind a positive approach to the preparation of these events. It was recognized, however, that instructions by high sources in the U.S. government to “punish France” would not facilitate the process.

What needs to be done?
  1. Both sides must eliminate an approach that consists of forcing divisions among allies. Europeans should not try to separate the British and the Americans or ask the Central European countries to choose between European identity or American friendship. In the same token, the U.S. should not try to divide Europe. For some of us, it is surprising that a new debate may even be able to surface in Washington on whether it is better for the U.S. to have two Europes or one. A French writer once said, “I love Germany so much that I prefer to have two.” He was a great writer but a poor politician. Likewise, the United States should not say “I love Europe so much that I prefer to have two, or, even better, 25.” The stability of our planet in large part depends upon the unity of Europe and its cooperation with the U.S.

  2. Lessons should be learned from the negative consequences caused by the poor diplomatic process leading to the announcement of the war in Iraq, as well as the failure of EU institutions to come up with common positions.

  3. It was suggested, by both our American and European members, that working together in Iraq will be imperative and that it cannot be a unilateral operation. Lessons from Kosovo and Afghanistan, where Americans and Europeans worked on a cooperative basis, should be learned, not ignored.

  4. Economic growth and solidarity towards developing countries, as well as the War on Terrorism and global issues such as epidemics and environmental protection, require joint action.

  5. Both sides should recognize that the reallocation of NATO troops in Eastern Europe and NATO’s role in the Middle East needs to be discussed, but should not be imposed.

Five main wishes to be considered:
  1. Ethical conduct by companies should be addressed, particularly in the U.S., to facilitate the flow of international capital. When 60% of the 2 billion dollars that the U.S. requires daily to finance its operations comes from Europe, “trust” is the name of the game.

  2. We need to do everything in our power to maintain and, if possible, to increase the flow of trade between Europe and the U.S., and with third countries. This does not only include concluding the Doha Round, but it also implies limiting the use of boycotts and sanctions which often result in their authors shooting themselves in the foot.

  3. Institutional procedures should be defined so that, not only the U.S. is part of the evolution of Europe, but that Europe is consulted during the decision-making process that takes place in the United States government. It should be recognized that there are different opinions in Europe and that they must be taken into consideration, not just ignored or sanctioned.

  4. NATO was built with the concept of a two-way street that never worked. The U.S. Congress can play a major role in facilitating the understanding in America that Europe wants to be as close as possible to America provided its own interests are also taken into consideration. We need to know what we want from each other. A strong partnership with Europe will need to be redefined.

  5. The U.S. Congress and the business community have the financial and political resources to exercise influence on these issues if they chose to. They need the will to define their positions in a positive way, and the will to publicize them.

Finally, many Americans say that they would like to know what kind of Europe the Europeans want and how the U.S. can work with it?

However, Europeans pose a similar question to the U.S. Administration and Congress. What kind of Europe does America want?

The European Institute is particularly interested in the views of the Subcommittee on Europe and its Chairman.

The floor is turned to Representative Dough Bereuter, Chairman of the Subcommittee on Europe.

 

  
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