AMBASSADOR'S CORNER
WEEKLY
MESSAGE FROM AMBASSADOR JOHN BRUTON
October 19, 2005
On Tuesday, we had European Commission President
Barroso and his wife Margarida in
Washington. Finola and I accompanied them to a
very enjoyable lunch in the White House as the
guests of President and Mrs. Bush. Also at the
lunch were Vice President Cheney, EU
External Relations Commissioner
Benita Ferrero-Waldner, Secretary of State
Condoleezza Rice, National Security Advisor
Stephen Hadley and US Trade Representative Rob
Portman.
It was a most impressive occasion. Both
President Barroso and President Bush have a
great mastery of their briefs and the discussion
moved swiftly and concisely from topic to topic.
High on the agenda was getting a successful
outcome to the
World Trade Organisation Meeting in Hong
Kong. If we can get an agreement to open up
world markets for more exchanges in services,
manufactured goods and agriculture there will be
a big boost to business confidence in the entire
world. Not only that, the poorest countries in
the world will benefit most from the
dismantlement of barriers because they suffer
most from them at the moment.
It will be a difficult negotiation. Moving
towards freer trade in
agriculture would bring big benefits but
could involve severe short-term losses for
individuals, and those who are likely to lose
are more vocal than those who would gain (many
of whom are not even aware that they would
benefit!) from freer trade.
It is important to take credit for the advances
that Europe has already made in opening up its
agricultural market and in reducing agricultural
protectionism. Whereas market support and export
subsidies amounted to more than 80% of the aid
given by the EU to European farmers in 1993,
they correspond to only 20% of that aid today.
When the
CAP [Common Agricultural Policy] reform
agreed in 2003 is fully implemented, only about
10% of direct payments to farmers will be coupled to
production, i.e., about 90% will be
non-trade-distorting. All other countries
subsidizing agriculture, including the United
States, should move away from trade-distorting
support, for the benefit of developing
countries.
The other big topic for discussion between the
two Presidents was how to deepen the profitable
economic relationship between the United
States and the European Union. Even though
European companies provide 75% of all foreign
direct investment in the United States, and half
of all the foreign profits made by US companies
in the entire world are generated in Europe, we
still have far too many barriers that cost us
jobs and money. We could do a great deal more.
While 7 million US jobs depend on European
investment in the United States, that figure
could be increased to 10 million or more. And
the same could happen in Europe.
How can this be done?
-
If we could remove the requirement on companies
listed on both sides of the Atlantic to convert
their accounts into the standards of the other,
we could cut the cost for each company by
between 5-10 million dollars per annum. That's
big chips even for the blue chips! That money
could be reinvested in research and development.
-
If we could have a genuine
Open Aviation agreement between the United
States and the European Union, our airlines
could fly and invest freely within the entire
transatlantic area, and consumers would gain
approximately €5.2 billion per year.
We are very fortunate that the personal
relationship between José Manuel Barroso and
George Bush is so good. It is a relationship
that can and will be transformed into major
economic gains for both the United States and
the European Union. Making this happen is one of
my main tasks here in Washington.
Please send me your
comments about this or any of my weekly
messages, or other EU matters. I look forward to
hearing from you!
John Bruton
European
Commission President Barroso (2nd from right)
Meets with US President Bush (far right) at the
White House, October 18, 2005.
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