Washington D.C., 26 October 2009 - In a speech to the U.S. Chamber of Commerce in Washington D.C., European Commissioner for Trade Catherine Ashton has called on policy makers on both sides of the Atlantic to make common cause in breaking down regulatory barriers to trade. Speaking ahead of the fourth meeting of the Transatlantic Economic Dialogue (TEC), she argues that the two sides should break through a ‘glass ceiling’ that has hindered the relationship from reaching its full potential. She also calls on the two sides to push for an early conclusion of the Doha Round of world trade talks.
Some key points from the speech:
Despite talk of the ‘Pacific Century’, the EU-U.S. relationship still drives the global economy, with the two representing over half the world’s USD 60 trillion GDP and responsible for commercial exchanges of USD 4.4 trillion annually.
Trade frictions and therefore disputes are inevitable, but affect less than 2% of the value of the total commercial trade relationship. Commissioner Ashton says: “Inevitably, some of these disputes grab the headlines. But the simple truth is the vast majority of our trade and investment flows freely, and this is sometimes forgotten.”
The real problems for exporters are not tariffs but regulatory concerns such as product licensing, risk assessment rules and divergent standards.
Looking ahead the TEC has the potential to develop into a genuine strategic instrument focussing on dispute prevention through upstream regulatory cooperation and convergence. The two sides should foster a transatlantic "market for regulation” in order to spot the most efficient regulatory tools.
The two sides should also find ways to solve "legacy" disputes, something Commissioner Ashton and USTR Ron Kirk are working on. However, realism is important, as Ashton puts it: “But no matter how enthusiastic we are, we cannot pull rabbits out of a hat. […] we advocate regulatory evolution, not regulatory revolution.“
Finally, Commissioner Ashton argues that despite a difficult political environment for trade liberalisation, the weak global economic outlook actually strengthens the arguments in favour of concluding the Doha Round of world trade talks, which would offer a boost to developed and developing countries of an estimated USD 220 billion every year, at no extra cost to the taxpayer.
The European Union and United States are each other's most important trade and investment partners, with more than 14 million workers on both sides depending on the relationship. Bilateral trade is worth USD 643 billion in goods alone, and total commercial exchanges across the Atlantic amount to USD 4.4 trillion annually. The total stock of investment in each other’s markets is worth around USD 1.5 trillion each way.