July-December 2006

Opening Transatlantic Markets
by Daniel Hamilton and Joseph Quinlan
Frankfurter Allgemeine Zeitung
Nov. 30, 2006
German Chancellor Angela Merkel is reviving talk of a Transatlantic Free Trade Area. As leader of the world's number one export nation, she is looking to liberalize trade despite the stalemated Doha round. She also wants to reinvigorate transatlantic ties and boost European competitiveness on the eve of Germany 's Presidency of both the European Union and the G8 in January. Her impulse is right. Doha is floundering and the US and the EU muddle through their annual summits with liberalizing rhetoric and few results. The answer against this backdrop, however, is not another bilateral trade deal but a transatlantic version of the EU's Single Market.
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EU and US united in efforts to strengthen economic integration and boost jobs, growth and competitiveness
November 10, 2006
The US Government hosted the second informal US-EU economic ministerial meeting to discuss transatlantic economic integration and shared economic challenges on 9 November. European Union Commission Vice President Verheugen and Finnish Minister for Trade and Industry Mauri Pekkarinen met Commerce Secretary Carlos M. Gutierrez and Energy Secretary Samuel W. Bodman to review joint progress , in the most significant areas of the transatlantic economy, including innovation, intellectual property rights (IPR), and regulatory cooperation.
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A NATO for the World Economy: An Argument for a Trans-Atlantic Free Trade Zone
By Gabor Steingart
October 20, 2006
Der Spiegel online - Asian businessmen are probably the friendliest conquerors the world has ever seen. But despite the politeness and the smiles, Western governments must act quickly to combat the rise of China and Asia . The West should discuss an ambitious project: a European-American free-trade zone. For 50 years it was a highly controversial institution. Today, though, every schoolchild knows that without the North Atlantic Treaty Organization, free Europe wouldn't exist. If the Western alliance hadn't ostentatiously demonstrated its power -- with its fighter jets, tank divisions and continually updated weaponry -- Soviet communism would have expanded westward instead of imploding as it did. By the end of the Cold War, even NATO's fiercest critics had learned their lesson: The dove of peace could only survive because the hawk was ready on his perch. The world war for wealth calls for a different, but every bit as contradictory, solution. Alas, once again many lack the imagination to see that the aims of our economic opponents are far from peaceful. Yet what sets this situation apart from what we usually call a conflict -- what paralyzes the West -- is how quietly the enemy is advancing.
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Merkel for EU Agreement with US
October 2, 2006
With the Doha Round of trade talks threatening to come to naught, German Chancellor Angela Merkel has come up with a plan B: a free-trade zone with the US . Such a zone would encompass 60 percent of the global economy.
The World Trade Organization has set a difficult task for itself. Since the Doha Round of negotiations began in November 2001, the WTO has been trying to come up with tariffs and trade agreement that all members can agree on. Success depends on satisfying the 149 countries participating -- which is far from an easy task. The talks collapsed most recently in late July of this year.
German Chancellor Angela Merkel, though, has a backup plan. Should the Doha talks ultimately prove untenable, she is open to the idea of forming a trans-Atlantic free-trade zone between the European Union and the United States.
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EU-US free trade agreement mooted in Berlin
September 20
Centre-right members of the German government are in favour of closer economic ties between the EU and the US , possibly resulting in a free trade agreement.
According to a report in Germany 's Bild newspaper, top CDU politicians - whose party is part of the ruling government coalition - are increasingly calling for a transatlantic free trade zone.According to Matthias Wissman, head of the Europe committee in the German parliament, a free trade zone would be "a great project for Europe and the German presidency."
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The European Union and Energy Looking to the Future
September 2006
The EU has recently released the Energy Policy Outlook. Energy policy is definitely a most challenging issue in world politics. Occasionally it proved a divisive one in transatlantic relations. The expected "end of oil" and the rise of countries such as China and India with escalating energy demands pose new problems and potential threats. Addressing energy policy issues timely is thus fundamental, as it may result in preventing possible conflicts. In the words of European Commission's President Barroso:" Together, the European Union and the United States can help shape the post-petroleum world of the 21st century. With shared values and common interests, Europe and America can lead the way and help build an energy economy that is secure, protective of the environment, and conducive to economic growth and prosperity around the globe."
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Regulatory Reform on Both Sides of the Atlantic
John Graham
Washington Post
August 15, 2006
Global trade is increasingly connecting the world, bringing consumers lower prices and a wider selection of goods, and creating jobs. But when government regulations vary enormously from one nation to the next, they become roadblocks to the smooth flow of international commerce, and hurt both consumers and workers.Lessening the differences in regulations between the United States and the European Union can benefit both the American and European economies. Both sides should be receptive to the concepts and practices employed by the other, and the two continents should recognize that redundant testing and certification processes are squandering resources on both sides of the Atlantic .[...] As the EU-U.S. dialogue on regulation progresses, there are plenty of areas where the United States can reasonably ask Europeans to consider changes. [...] Yet it is equally important for U.S. officials to acknowledge that there are lots of warts in the American regulatory system, including many specific areas where some U.S. movement toward the European position would be worthwhile.
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U.S.-EU Cooperation on International Financial Reporting Standards
Mario Sina
Business Updated
August 3, 2006
Charlie McCreevy, European Commissioner for Internal Market and Services, has welcomed the publication of a Work Plan between the Committee of European Securities Regulators (CESR) and the United States Securities Exchange Commission (SEC) that outlines concrete measures to facilitate transatlantic financial activity within a sound and protective framework.
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See Also

G8 Countries Agree on Energy Security Rules
The Energy Market
The heads of the foreign offices of the G8 countries, meeting in Moscow yesterday, agreed on a document for the summit in St. Petersburg next month. The document is expected to be a foundation for dependable fuel supplies to the world market. In spite of the disagreement over the subject, Russia seems to have convinced the other countries at least to take a common approach to the problem, that of reducing market influences on world oil prices. Russian Foreign Minister Sergey Ivanov announced yesterday that a "solid and all-encompassing" document on energy security was almost ready. According to Lavrov, the document, initiated by Russia , supports "identical market rules of the game on the energy market for all." U.S. Secretary of State Condoleezza Rice said the document contained "common sense."
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Center For Transatlantic Relations annual report underscores greater economic exchange across the Atlantic
November 21, 2006
Although recent years have been among the worst of times for transatlantic political relations, they have been the best of times for the transatlantic economy.
Since hitting a cyclical bottom in 2001/02 due to the bursting of the U.S. technology bubble and the subsequent U.S. recession, transatlantic trade, investment and corporate profits have soared in recent years, with the United States and Europe each leveraging off each other's strengths.
Transatlantic economy continues to generate roughly $3 trillion in total commercial sales a year and employs up to 14 million workers in mutually 'insourced' jobs on both sides of the Atlantic who enjoy high wages, high labor and environmental standards, and open, largely nondiscriminatory access to each others' markets.
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EU and US united in efforts to strengthen economic integration and boost jobs, growth and competitiveness
November 10, 2006
The US Government hosted the second informal US-EU economic ministerial meeting to discuss transatlantic economic integration and shared economic challenges on 9 November. European Union Commission Vice President Verheugen and Finnish Minister for Trade and Industry Mauri Pekkarinen met Commerce Secretary Carlos M. Gutierrez and Energy Secretary Samuel W. Bodman to review joint progress , in the most significant areas of the transatlantic economy, including innovation, intellectual property rights (IPR), and regulatory cooperation.
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Company chiefs urge cut in transatlantic trade barrier
September 26, 2006
DUBLIN - The head of a group of European and American corporate bosses called yesterday for transatlantic trade barriers to be torn down urgently to counter the threat of rising protectionism.
The European Union and the United States must remain committed, both politically and economically, to world trade rules, said British Airways chairman Martin Broughton, head of the TransAtlantic Business Dialogue (TABD). "The WTO Doha round has got itself truly stuck, and is in desperate need for leadership from the EU and US to get it back on track," he said, referring to World Trade Organization (WTO) negotiations on a new set of world trade rules.
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EU-US free trade agreement mooted in Berlin
September 20, 2006
Centre-right members of the German government are in favour of closer economic ties between the EU and the US, possibly resulting in a free trade agreement. According to a report in Germany's Bild newspaper, top CDU politicians - whose party is part of the ruling government coalition - are increasingly calling for a transatlantic free trade zone.According to Matthias Wissman, head of the Europe committee in the German parliament, a free trade zone would be "a great project for Europe and the German presidency."
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Germany Eyes Free Trade Zone to Rival China
By Bernard Benoit
September 15, 2006 - Spurred by concern about China 's growing economic might, Germany is considering a plan for a free-trade zone between Europe and the US . A senior aide to Angela Merkel said the chancellor was "interested" in promoting the idea as long as such a zone did not create "a fortress" but rather "a tool" to encourage free trade globally, "which she is persuaded is a condition of Germany 's future prosperity". As German perceptions of China have grown more American, Washington 's approach has shifted too. Speaking before his first trip to Beijing, Hank Paulson, US Treasury secretary, this week outlined a more balanced policy mixing traditional US criticism with praise for China's reforms.
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A coming housing crash?
August 25, 2006
A new alarming trend is affecting the US economy. Recent figures from the real estate market seem to substantiate a fear that few economists have been willing to face. The housing bubble in the US may be about to burst. New and preexisting home sales have declined by 10% from their peak in 2005. Mortgage applications have plummeted by 20%. Additionally home construction rates keep outpacing population growth in the US, resulting in excessive home supply and further downward pressure on real esate prices. These and other factors strongly suggest that the housing bubble may deflate rapidly. Why does it matter to the world economy and thus to transatlantic economy as well? It does, because Americans have been able to sustain their huge consumption rate, thus of imported goods as well, mostly beacause of the housing wealth effect. Anytime housing market value soared, households refinanced mortgages for a higher amount and then cashed out the difference. If real estate prices fall, as it is very likely to happen soon, American households will no longer be able to do so. On the contrary they might have serious problems with paying off their debt. Acknowledging this risk may be the first step to take the appropriate countermeasures. More on the real estate bubble: Krugman P., Housing Gets Ugly; Center for Economic and Policy Research, Is the Housing Bubble Collapsing?10 Economic Indicators to Watch

U.S.-EU Cooperation on International Financial Reporting Standards

Mario Sina, Business Updated

August 3, 2006

Charlie McCreevy, European Commissioner for Internal Market and Services, has 
welcomed the publication of a Work Plan between the Committee of European Securities 
Regulators (CESR) and the United States Securities Exchange Commission (SEC) that outlines concrete measures to facilitate transatlantic financial activity within a sound andprotective framework. 
(Read More)

Study sheds light on European and American social and economic models
August 2006
The welfare state and labor markets policies are often quoted as a leading source of divergences across the Atlantic. European welfare state and rigid labor market policies are often blamed for high unemployment and lower economic mobility across Europe .
A recent, comprehensive study from the Washington based Center for Economic and Policy Research addresses these issues into details. The findings, rigorously based on official statistics and empirical observations, are thought provoking and occasionally surprising. While the paper confirms that the US performs quite well in terms of standard employment rates relatively to large European economies such as Germany , France and Italy , it also finds that "smaller" European countries with greater labor rigidity and a stronger welfare state widely outperform the US . The study also finds that according to other indicators such as economic and social mobility, income inequality, relative poverty rates, the US falls short of expectations comparing to European counterparts. The study is not expected to say the last word on this topic. Nevertheless, it offers a fundamental chance of reflections for policymakers on both sides of the Atlantic.
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The WTO reccomends the suspension of Doha talks
July 28, 2006
The General Council, at its meeting on 27-28 July 2006, supported a recommendation by Director-General Pascal Lamy to suspend the Doha negotiations. The Task Force on Aid for Trade submitted its report and recommendations aimed at helping developing countries increase exports of goods and services.
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2006 U.S.-EU Summit Progress Report on the Economic Initiative
Following the commitment at the 2004 Dromoland Summit to further transatlantic economic integration, the June 2005 U.S.-EU Summit launched the "Initiative to Enhance Transatlantic Economic Integration and Growth." This covers regulatory and standards cooperation; open and competitive capital markets; innovation and the development of technology; trade, travel and security; energy efficiency; protection of intellectual property rights; investment; competition policy and enforcement; procurement; and services. A joint U.S.-EU Work Program to implement the Initiative was welcomed at the informal U.S.-EU Economic Ministerial in November 2005. This report notes areas of progress made in the past seven months to implement this multi-annual program under the Economic Initiative and in other areas of transatlantic cooperation.
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