Transatlantic Economic Council Works Behind the Scenes to Unleash the Potential of the Transatlantic Economy
Improving the world’s largest and most dynamic economic relationship through removal of non-tariff and regulatory impediments is the goal for the council.
by Lee Zachos
The economic relationship between the European Union (EU) and the United States is the largest and most dynamic in the world. Their joint gross domestic product (GDP) accounts for more than $25 trillion (roughly 50 percent of global GDP), and their services account for more than 750 million consumers. Commercial ties between the two economies generate roughly $3 trillion per year and 14 million jobs. Those strong trade links are reinforced by the deepest foreign investment flows in the world market. Europe accounts for more than 75 percent of foreign direct investment in the United States, while 57 percent of American investment is in Europe.
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|Carlos M. Gutierrez, secretary of commerce, and Günter Verhaugen, vice president of the European Commission, met recently in Washington, D.C., to discuss how the Transatlantic Economic Council can enhance the U.S.–EU economic relationship and benefit both economies. (U.S. Department of Commerce photo)
Today, the United States and the EU face a markedly different world market than the one they benefited from during the past 50 years. Globalization has ushered in a new host of economic players, most notably China and India. Those countries continue to threaten the competitive primacy of the transatlantic economy. To address the unprecedented economic challenges, President George W. Bush, German Chancellor Angela Merkel, and European Commission President José Manuel Barroso signed the Framework for Advancing Transatlantic Economic Integration during the 2007 U.S.–EU Summit.
Transatlantic Economic Council Launched
The framework’s central tenet is that the transatlantic economy could become even more competitive and dynamic if various non-tariff and regulatory impediments were removed, which would allow for greater cooperation across a broad range of sectors. The framework tasked policy-makers to find mutual areas of convergence and created a high-level Transatlantic Economic Council (TEC) to oversee the effort.
“The U.S. and EU economic relationship continues to be the largest and most successful bilateral trade and investment relationship in the world,” said Carlos M. Gutierrez, secretary of commerce. “However, we also recognize the need to continue to focus on the burdensome regulations that slow down economic growth, promote enforcement of intellectual property rights, and identify ways to collaborate on innovation efforts.”
Eliminating Inefficiencies Could Save Billions
The TEC serves to enhance cooperation for new areas of regulation and to resolve regulatory problems that presently create inefficiencies in the transatlantic relationship. According to the U.S. Chamber of Commerce and Business Europe, achieving existing TEC goals could generate $10 billion in saved costs and potential growth for the transatlantic economy. Moreover, the Center for Transatlantic Relations estimates that further integration could have an even greater substantial payoff—the equivalent of giving every European and American an entire year’s extra salary during their working lifetimes.
The Department of Commerce, through the International Trade Administration’s Market Access and Compliance unit, is one of the core U.S. government agencies of the TEC. The Department of Commerce has helped secure new levels of transatlantic economic cooperation in some key areas, including intellectual property rights, patent harmonization, innovation, and investment.
Building Momentum for the Future
The TEC has now held three face-to-face meetings: November 2007 in Washington, D.C.; May 2008 in Brussels; and December 2008 in Washington, D.C. In that time, the TEC has helped align EU and U.S. policies on investment, accounting standards, import safety, supply chain security, automobile standards, and renewable energy. All of those policies will directly benefit transatlantic businesses and consumers. The leaders of the TEC process are confident that the positive momentum generated during the year will help secure the TEC for the next U.S. administration and EU Commission in 2009.
For more information about the TEC, visit www.tabd.com.
Lee Zachos is an international trade specialist with the International Trade Administration’s Market Access and Compliance unit.