Working Group on International Trade

von Denis Schrey

"The New Transatlantic Economic Partnership"


The working group on international trade which took place in the European Office of the Konrad-Adenauer-Stiftung on March 22nd 2007 featured Gary Litman, Vice President for Europe and Asia at the International Division of the US Chamber of Commerce in Washington.

Mr. Gary Litman shortly introduced the US Chamber of Commerce with a 4 million dollars budget as the world’s largest business federation representing more than 3 million companies of all sizes, sectors, and regions. It includes hundreds of associations, thousands of local chambers, and over 100 American Chambers of Commerce in 91 countries.

According to Mr. Litman, Europeans and American share basic common economic values and a common understanding of the functioning of effective markets. By covering 50 % of the American Integrated Market the European Union is an indispensable regulator for the US.

He underlined his scepticism about the role of governments in building markets and strongly believes in the power of consumers to influence and drive investment decisions. Concerning Chancellor Merkel’s proposal he generally supports the initiative but fears especially after the discussions in the last couple of days that the German administration was bustled with new suggestions and complex proposals which would strain the original initiative and is perceived by US administrations officials more as an attempt to export the European Social Model.

He clearly expressed his fear that the prepared declaration of the German presidency for the EU-US summit at the end of April would not lead to any action.

Therefore he clearly favours a “Negotiating towards outcome approach” and would prefer a summit document which comprehends a clear mandate for the negotiators to commit themselves to a clear ratified binding, legal framework agreement. The agreement should build transatlantic cooperation directly into the mandates of regulatory agencies. This could be achieved through modification of their rules of procedure or legal remit. Up to now it is difficult to point to concrete achievements from efforts by governments on both sides to strengthen the relationship. Since the establishment of the New Transatlantic Agenda in 1995, a series of initiatives have sought to remove barriers – the Positive Economic Agenda, Transatlantic Economic Partnership and most recently the 2005 Transatlantic Economic Initiative. These initiatives Litman stated “did not bring any substantial progress”.

As long as the European Union and the US have no legally negotiable instrument, Litman stays rather reluctant to any new political initiative which does not bring the counterparts around the table. When being asked what first concrete step should be taken in this respect he suggested picking one area which would affect a lot of people, for example quality issues. Through identifying a shared methodology and taking commonly accepted scientific standards, comparing joint implementation methods, both sides would start to gain control over the process.

Litman also judged other initiatives like the Transatlantic Business Dialogue as limited in their scope and coverage as the adopted documents and strategies are not binding. An EU-US free trade agreement would be the most efficient way of dealing with tariff barriers between our economies.

Being asked on his ideas about an EU-US Free Trade Agreement, he underlined that American Companies rather hesitate to support this initiative as long as the juridical face of Europe is still unclear. A lot of companies fear increasing complexities more bureaucratic hurdles, increasing management time coming along with such an agreement and don’t realize the positive long time economic spill over effects.

The transatlantic economic partnership Litman concluded is at a crucial point. A lot of political courage is needed to further improve the partnership.

Europe could provide some positive incentives to the US and keep pressure on the American government as long as it puts a clear, coherent, feasible and a pragmatic legal framework agreement on the “summit” table.