On January 25, GMF in cooperation with Bruegel, a Brussels based think tank, hosted an event on Capitol Hill titled, "The New European Commission - A Renewal of the Transatlantic Economic Partnership?" This half-day conference, which featured panelists from international institutions, multinational corporations, think tanks, and the media, focused on the future of the transatlantic economic relationship in light of the global financial crisis; changes to the European Union's architecture; and recent shifts in global governance from the G-8 to the G-20. Afternoon panel discussions highlighted the state of the transatlantic and global trade agenda, as well as the challenges that policymakers face in attempting to coordinate national regulatory priorities on financial services at the global level . Robert Hormats, Undersecretary of State for Economic, Energy, and Agricultural Affairs at the U.S. Department of State , delivered a keynote address on the state of the transatlantic economic partnership and the future of the Transatlantic Economic Council (TEC). Belgian Ambassador to the United States, Jan Matthysen, responded by offering his perspectives on the implications of structural changes to the EU for the transatlantic agenda.
During his remarks, Undersecretary Hormats stressed the deep economic linkages between the United States and Europe. He explained that not only are European companies the largest foreign "job source" for Americans, but most foreign workers in Europe are Americans. Despite the strength of the existing transatlantic relationship, Hormats noted that trade and investment links have to be further deepened in order to spur additional job growth and to sustain economic competitiveness. According to Hormats, important policy opportunities for collaboration include the Doha Development Round and the G20 process. In addition, he listed a number of policy items that will be addressed under the umbrella of the TEC and other bilateral policy issues, including energy policy, intellectual property rights, and liberalization efforts in the aviation sector. In order to maximize the potential benefits of the TEC, Hormats stressed the importance of focusing efforts particularly on the policy areas which have not yet been highly regulated and whose liberalization would bring significant economic benefits to companies in the United States and Europe.
To listen to the complete remarks of Undersecretary Hormats, please click here.
In his response, Ambassador Matthysen briefly described the structural changes taking place within EU institutions and noted that policymakers in the United States will have new interlocutors with whom they can discuss policy agendas, including Lady Ashton, the new high representative for the EU, and Herman van Rompuy, the new president of the European Council. The Ambassador then underlined that while the United States and Europe are competitors in various markets, they share similar goals and need to work together in order to maintain global leadership.
The comments by Undersecretary Hormats and Ambassador Matthysen were followed by a Q&A session with participants, many of whom highlighted the need to strengthen political support for the TEC and discussed the role of the G-20 versus the agenda of the G-7/8.
The conference's first panel, which was moderated by the Financial Times' world trade editor, Alan Beattie, focused on the state of the transatlantic relationship in the wake of the global financial crisis and the need for policymakers to define the transatlantic partnership within the context of global challenges, and its relationship to Third World countries. In focusing on-- and strengthening - common transatlantic policies related to macroeconomic surveillance, and regulatory policy dialogue within the TEC and pre-summit meetings, the EU and United States will be able to leverage their partnership in an ever more interwoven international arena. Panel discussants included: Marek Belka (IMF), Jim Kolbe (GMF), Dan Price (former US G-20 sherpa; Sidley Austin), and Jean Pisani-Ferry (Bruegel).
The second panel was moderated by Joseph Quinlan, GMF fellow and Chief Market Strategist at Bank of America. The discussion focused on financial services within a new regulatory environment. The speakers included Nicolas Véron (Bruegel), Clay Lowery (the Glover Park Group), Paul Wright (the Institute of International Finance), and Dan Price (Sidley Austin LLP). The panel emphasized that regulatory fragmentation presents the main risk to the financial regulatory reform process. Discussants highlighted that while regulatory reform has a pronounced transatlantic dimension, policymakers need to keep in mind that it remains a global issue. Meanwhile, in light of domestic political pressures, convergence of national regulatory agendas at the global level, within the context of the G-20 and the Financial Stability Board, will remain a challenging endeavor. In this context, some of the panelists argued that the reform processes risk leading to the fragmentation of rules and a "de-globalization" of finance. As one of the participants noted, today's challenge is to "re-regulate" without "re-fragmenting." At this critical juncture, transatlantic dialogue needs to be intensified to prevent regulatory overdrive and the divergence of rules. Furthermore, the United States and Europe, as well as other global players, need to initiate policies to ensure effective cross-border crisis resolutions. One of the participants contended that the EU-U.S. dialogue is an essential prerequisite to increasing the role of the emerging surplus economies in global finance. Two panelists emphasized that elaborate linkages between trade, finance, and foreign direct investment have deepened the impact of the financial crisis on the global trading system. The discussants also cautioned that the global financial crisis has not entirely dissipated as, for example, Spain and Greece continue to face significant monetary and fiscal challenges.
The conference's third panel entitled "Transatlantic and Global Trade Agenda", featured former United States Trade Representative negotiator Dorothy Dwoskin (Microsoft), Jennifer Hillman (WTO Appellate Body, GMF fellow), Hiddo Houben (EU Delegation to the U.S.), and Andre Sapir (Bruegel). The discussion, which was moderated by Bruce Stokes (National Journal, GMF fellow) and touched upon a wide range of contemporary trade issues.
While panelists shared a broad consensus related to the fact that the Doha Development Round negotiations are currently stalled due to an unfavorable political environment, they disagreed on viable means to conclude the negotiations. The agenda of the negotiations was deemed outdated, as it addresses classic market access interests rather than the various linkage issues between trade and other policy areas, such as the environment. Some panelists suggested that it is imperative that the Round be concluded in order to facilitate transitioning talks to current trade policy challenges. To strike a final deal, the panelists expressed the need for additional industrial market access concessions, particularly on the side of emerging economies, but also on in relation to the U.S. based agricultural sector. On the other hand, one participant argued that the deadlock presented an opportunity for policy makers to update the agenda and include pressing issues, such as climate change, investment, competition policy, and government procurement. Although including additional policy areas would prolong the negotiations, the final agreement would reflect a more comprehensive deal.
Finally, the panel covered e recent EU institutional developments in light of the EU's Lisbon Treaty ratification at the end of last year. The Treaty will increase the European Parliament's powers with regard to trade policymaking, providing it with the right to approve or reject negotiated trade agreements. While the discussants agreed that the newly acquired responsibilities of the parliament would complicate and politicize the so far executive-driven and technocratic trade policy process in the EU, several panelists deemed this as an opportunity to communicate trade policy benefits to broader constituencies by means of strengthened parliamentary involvement. Overall, changes stemming from the Lisbon treaty will have a profound impact on the way EU trade policy is formulated as the new process will demonstrate a clear resemblance to U.S policymaking, where the legislative branch traditionally has a strong role.