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It has  become almost a cliché  to say that  something has gone  wrong in the
transatlantic relationship,  that the  EU and  the US have  lost interest  in
each other and  have found  more exciting prospects  elsewhere.   This in  my
view is a gross exaggeration and oversimplification.  It continues to be  the
most important international relationship for both parties, but the  changing
political and economic circumstances  make it essential for us to refocus our
attention on it, finding  the right  policies and mechanisms  to adapt it  to
those changes".  

In  a speech to  the American  Club of  Brussels, Sir Leon  Brittan, European
Commission  Vice-President  responsible  for relations  with  North  America,
attempts to clear some of the fog  obscuring the discussion about how  Europe
should deepen its relationship with the United States.  He proposes a  three-
pronged  strategy:  building from  the  bottom  up on  the  current links  we
already have;  filling in  the gaps  by boosting  parliamentary and  business
contacts;  and preparing  for  a  possible  future  initiative  by  carefully
analysing the pros  and cons  of a number of  ideas which have  recently been
made, such as a Free Trade Area and a new Transatlantic Treaty.  

This new relationship  must involve security, economic relations and American
and European joint involvement in  the rest of the  world.  On security,  Sir
Leon  says "I  detect  an  understandable US  impatience  with the  EU  as it
struggles to develop  coherence in foreign and  security policy to  match its
single voice  in trade matters.  We need  in the coming months to resolve the
question of how the European pillar can relate to the US".  

"It is up to the EU  to find solutions which are internally acceptable.   But
they also  have to be operationally  credible to  our partners.  It  has long
been a myth that the United States is  opposed to the creation of a  European
defence identity.  But as that entity will still be using NATO  logistics and
material when  operating  outside NATO  auspices,  the  US has  a  legitimate
interest in  our ability  to create  a European  pillar which  can take  real
decisions  with the  political,  administrative  and military  structures  to
implement them".  

Sir Leon explains how the economic relationship  will come more to the  fore,
and may in  time come to equal  the old security relationship.  Likewise, the
relationship will be  characterised increasingly by a desire to pursue common
objectives on the world stage: 

"Those who  predict an American  return to the  isolationism of the past  are
wrong.   Europe and America have shown we can work well together in the wider
world.  It is not a question  of ganging up on the rest of  the world so that
other countries fall into line with  some great EU-US plan.  Rather,  we must
use our considerable resources to  make a more effective,  joint contribution
to the most pressing of the world's problems".  

     Where do we go from now? 

We  need to  imbue the  relationship with a  new sense  of purpose  and a new
feeling of momentum, upgrading it to  identify a broader new goal even  if it
takes  several  years  to  bring  everything  fully  to  fruition,  Sir  Leon
explains.  If not, we could be left with a dangerous vacuum in the interim.

Working  from the  bottom  up: "Europe  and  America need  a progress-chasing
mechanism between Summits,  to pursue and monitor issues identified above all
by  the business  community.   We must  consider  whether we  have the  right
institutions  for driving the relationship forward.   For example, we used to
have  meetings at  Cabinet level  between  US Ministers  and  members of  the
European Commission.  This practice has fallen into  disuse.  Surely the time
has  come  to   revive  it.    Perhaps   we  need  some  group   of  personal
representatives on the EU  side to meet with US  representatives regularly to
work through a large common agenda".

Filling in the  gaps: "we also need a  new forum in which  representatives of
the US  Congress, EU national parliaments  and the  European Parliament could
meet to discuss  the transatlantic agenda.   This would not  replace existing
links.   It could adopt  resolutions which would then be  fed back into their
respective national and European policy and law-making mechanisms".  

"Similarly,  we are  planning to  launch a  consultation of business  on both
sides  of  the Atlantic  to  test  reactions to  the  idea  of  setting up  a
Transatlantic Business  Dialogue.   This should  not try  to come  up with  a
negotiating  agenda but should  rather focus  on the  longer term.   It could
include  new areas  of industrial cooperation  over industry,  business rules
and trade and investment in eastern Europe".  

Working on a  new initiative: "among the big  ideas most frequently mentioned
are  a  transatlantic  free  trade   area,  an  economic  space  and   a  new
transatlantic treaty.   I have an open  mind on these ideas.   It is not  too
soon to test those ideas  now and to begin  weighing the pros and cons.   But
we  must not  create false  expectations, nor  get carried away  by seductive
ideas which cannot be translated into reality".  

"In the coming months,  the Commission will look seriously at the feasibility
of an EU-US Free Trade Area.  We  have just come through an ambitious tariff-
cutting negotiation,  and need to see  whether there  are realistic prospects
for further  cuts.  A  free trade area  would have to be  compatible with the
WTO,  which requires them to cover 'substantially all trade'.  Agriculture is
sensitive to both sides and  certain other sectors like textiles  continue to
enjoy high tariffs in the US.  I do not see  the EU agreeing to eliminate all
tariffs on  its agricultural trade with the  US for the sake  of a free trade
agreement.    Any   such  arrangement  would  need  to  provide  for  certain
exceptions which would in turn need to be compatible with the WTO".  

"Would  we want a free trade area just with the US, or would an EU-NAFTA area
be preferable?   The latter would  bring further  economic possibilities, but
it is politically  more difficult to  negotiate with  three governments  than
with one."  

"The  idea of going beyond tariff reduction  towards the elimination of other
barriers and obstacles to business development is an  attractive one.  An EU-
US  economic space  would go further  than just free  trade, including mutual
recognition  of standards,  as well  as increased  cooperation in competition
policy and other areas."  

"Finally,  we need  to look seriously  at the  idea of  an EU-US Treaty.   It
could  provide  a way  of  integrating  all  the various  components  of  our
relationship  which  I  have  considered  today  -  security,  political  and
economic.  Nonetheless,  until the EU has  the IGC  behind it and until  NATO
and the EU  have worked out  the new  European security architecture  neither
the EU nor the US  are likely to be in  a position to negotiate  a full-scale
Treaty to  govern future Transatlantic relations.   When that has  been done,
we  will  be  better placed  to  see  whether  its incorporation  into  other
elements of the relationship in a new Treaty is the right way forward".  

"The  immediate target is that, by the  end of the Spanish Presidency, I hope
we can announce  our ultimate objective, at  least in general terms.   In the
meantime there is much work to do".


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