Creating a Transatlantic Market

Dario Zuddu1 and Jay T. Chittooran2

The fate of the transatlantic relationship is the paramount challenge facing the European Union
and the United States. While both governments have self-interest, they both have a global
responsibility to work together in this time of economic ambiguity. Each country must respond
to this economic crisis and develop strategies that guarantee sustainable prosperity in the future,
while also rendering future collapses improbable.

This requires a shared transatlantic approach that is supportive of mutual interests and seeks to
enhance the current economic governance structure to allow power to be diffused to all players
in the system more effectively, fairly, and logically.

The global economy needs to be properly managed. Prudent standards in the financial markets,
consumer protection and safety measures in trade in goods, and standardized procedures for
oversight and control need to be mutually recognized by the members of the world economy.

Transatlantic economic cooperation should be enhanced. Creating a stronger and better

integrated transatlantic markets can be traced from the idea that "a „laissez-faire approach' to the
world's single most important economic relationship is neither sustainable nor defensible." While
transatlantic trade would encourage growth, the efforts should go beyond trade liberalization and
the settlement of trade disputes.

While previous efforts have produced little of a tangible nature and lacked actual binding and
formal commitments, the "Framework for Advancing Transatlantic Economic Integration
between the USA and the EU" was a strong move in promoting closer EU-US cooperation; that
is, this agreement actually had the potential to produce significant change in transatlantic
relations. By agreeing to this, the European Commission President Jose Manuel Barroso,
German Chancellor Angela Merkel, and President George W. Bush took an encouraging step.
Not only did this framework provide greater cooperation and integration among the transatlantic
markets, it also established the Transatlantic Economic Council, which is aimed at increasing
harmonization through reduced regulations. This framework brings together the leaders from
both sides of the Atlantic who hold the political power to bring about closer economic ties.
Previous EU-US summits have worked on a variety of topics, including automobile safety,
climate change, and agriculture. In the coming months, discussions will be focused on topics
related to financial regulation, technology, and development (Doha).

The currency crises of the 1990s and the current economic and financial collapse have depicted
the fragility of the current system. With a need to reinforce and stabilize the transatlantic
economy, the work of the TEC and other related organizations, all created under the auspices of
the EU-US agreement, will alleviate problems that currently face not only the transatlantic
countries, but also the global community.

1
Research Fellow, The Streit Council, 2005
2
Research Fellow, The Streit Council, 2009
Based on this reality, making economic cooperation and a common international economic
policy the anchor for closer transatlantic relations is not only feasible, but is also completely
necessary. That is why integration, in this context, is starting with harmonization of technical
standards and regulations along sectoral lines, as delineated in the 2007 Framework (and other
similar documents).

Many experts in this field believe that by 2025, countries, namely Brazil, China, and India, will
gain economic strength as a direct result of increased development, capital stocks, and resources.
Because of this, these countries will demand larger influence in the multilateral institutions. The
transatlantic actors, EU and US included, must adjust to facilitate the integration of developing
countries into the global economic system.

Joseph Quinlan, Transatlantic Fellow at the German Marshall Fund, recommends that the “EU
and the US identify mutual interests with developing countries and step up cooperation, citing
climate change, energy security and aging populations as possible areas where joint
efforts would be beneficial to all parties.”

While critics have argued that increased collaboration will generate wanton bureaucracy, the
structure of the transatlantic economic agreement will be more strategically focused and geared
towards specific goals and economic gains. Many actors, from national to state governments,
multinational to non-profit organizations, and the public on both sides of the Atlantic, are
intrinsically intertwined in the plan for a Transatlantic Market by 2025.

The possible creation of a Transatlantic Free Trade Area (TAFTA) has also received much
attention, but it remains to be seen whether this idea will come to fruition. Critics of this plan
insist that a completely barrier-free market would result in tenuous relationship that would not
allay any fragility or volatility concerns.

Either way, these changes have provided a very promising springboard for the expansion of
transatlantic cooperation in other areas. Continued work and improvement are necessary if
transatlantic economic cooperation is to be expanded.
References:

-Bergsten, Fred, and Caio Koch-Weser. "Restoring the Transatlantic Alliance." The Financial
Times [London] 6 Oct. 2003.

-Cotis, Jean-Philippe. "The Transatlantic Relationship." United States Department of State,

Washington DC. 27 Oct. 2005.

-Frost, Ellen L. "Transatlantic Trade: Towards a North Atlantic Economic Community."

Testimony before the Subcommittee on Trade Committee on Ways and Means. House of
Representatives, Washington. 23 July 1997.

-Hamilton, Daniel, and Joseph Quinlan, eds. Deep Integration: How Transatlantic Markets Are
Leading Globalization. Brussels: Centre for European Policy Studies, 2005.

-Hamilton, Daniel, and Joseph Quinlan. The Transatlantic Economy 2009: Annual Survey of
Jobs, Trade, and Investment between the United States and Europe. Washington DC: Center for
Transatlantic Relations, 2009.

-Posen, Adam S., ed. "The Euro at Five: Ready for a Global Role?" Peterson Institute of
International Economics (2005).

-Seibert, Horst, Rolf J. Langhammar, and Daniel P. Feri. "The Transatlantic Free Trade Area:
Fueling Trade Discrimination or Global Liberalisation?" Journal of World Trade 30.3 (1996).

-Steil, Benn. Building a Transatlantic Securities Market. Rep. Washington: Council on Foreign
Relations, 2002.

-Stokes, Bruce. "Europe Needs America's Help." The National Journal 14 June 2005