European Affairs

It is natural at this historic juncture to highlight the extremely positive elements of NATO's contribution to European and world security, as well as the positive elements of the U.S. relationship with the European Union and, equally importantly, with EU member states. On both accounts, our shared heritage over several centuries, and the extensive relationships between our peoples, represent a timeless foundation for the relationships of the future.

It is also appropriate to recognize that Europe stood with the United States after the tragic attacks of last September, through NATO in the first instance. European cooperation in the war on terrorism has been impressive, and demonstrates the shared conviction that we must confront, and in fact are confronting, this very real and serious threat together.

Trade and investment, of course, are equally important. The U.S.-EU economic relationship is the world's largest. The United States has 22 percent of world GDP, the European Union 21 percent. Trade between the European Union and the United States totals $2 trillion a year. Total direct investment both ways is more than $1 trillion.

This economic dynamism, of course, underpins our strong support for European integration over the decades. Since the time of the post-war Marshall Plan, European integration has been a central U.S. foreign policy goal. The basic tenet is that economic stability is crucial to long-term political stability and is a fundamental restraint on conflict.

Today, this concept remains as compelling as ever. Pursuit of the dream of EU and NATO membership has clearly accelerated and reinforced the transition to market economies and democracy in Central and Eastern Europe and the Baltic countries.

President Bush believes in NATO membership for "all of Europe's democracies that seek it and are ready to share the responsibilities that NATO brings." A robust enlargement would bring us closer to completing the vision of a Europe whole, free and at peace, and the Prague summit will reaffirm the strength, unity and vitality of the Euro-Atlantic alliance.

Our NATO agenda focuses on three critical challenges: new capabilities, new members and new relationships. It is vital that

NATO develops and maintains the means to meet these challenges in the future, as it has done over more than five decades. We shall focus on these priorities with our allies both before and after the Prague summit.

As for EU enlargement, the United States sees the aspirant countries' adherence to EU rules and regulations as important for a number of reasons. It will promote the development of stable institutions ensuring democracy, human rights, respect for and protection of minorities, and the rule of law. It will sustain functioning market economies, capable of withstanding competitive pressures. It will improve the business climate, which will expand demand for U.S. goods and services.

Equally, we think it will increase opportunities for closer joint law enforcement efforts and strengthen cooperation in fighting terrorism and transnational crime. So, the overall impact of enlargement is very positive for U.S. interests.

Some Europeans mistakenly believe that competition will overshadow collaboration in U.S.-EU relations. Many of these critics choose to focus on headlines about U.S.-EU disputes over bananas, steel, agriculture and so on, without acknowledging the larger productive picture of world-class, mutually beneficial, market-driven trade and investment.

EU enlargement will clearly involve adjustments. Difficult trade issues are inevitable, but they will also be resolvable. It will be vital to identify problems early and to conduct open exchanges between Brussels, Washington and the candidate countries. Aspirant countries, for example, often provide EU partners with advantageous trade tariff treatment, in violation of the principle of non-discrimination.

These discriminatory tariffs sometimes appear to be aimed at ensuring monopoly positions for individual EU suppliers. Luckily, these situations will recede once the new members join the European Union and adopt the common external tariff. This will allow most U.S. companies a fairer opportunity to compete in the new member states' markets.

We believe that successful EU aspirants, as new member states, should not allow the complex and very daunting agenda of EU accession to overshadow the critical benefit that they, as individual sovereign states, can generate for their economies by seeking out trade and investment opportunities with the United States, which remains the world's largest and most dynamic economy.

Similarly, on some issues of interest to the United States, it appears that there is an ongoing struggle - much akin to the national debates we have had over the years in the United States - whereby European Commission officials are seeking to establish their primacy in matters of policy and regulations at the expense of the prerogatives of individual member states. The United States hopes, and expects, to be able to deal with member states in a number of areas where they retain, at least for the time being, primacy of voice and decision.

Put simply, the United States has a strong relationship with the European Union, with individual member states and with the aspirant countries. We expect these relationships to continue and to flourish. We believe that for the aspirant countries, EU membership is not a choice between the United States and Europe. Rather, it anchors the aspirants to the West and to the Atlantic Alliance, and reinforces the security and stability of all.

Another challenge facing the United States, NATO and the European Union is the critical need to remain engaged with those countries that are not invited to join NATO and the European Union this year. NATO, of course, will continue to have an "open door" for new members and will pursue the membership action plan program for candidates not invited to join at the Prague summit in November. Washington, for its part, will continue to do everything possible to strengthen its bilateral economic relationships with successful EU aspirants and, equally important, with those that will have to wait some years for EU entry.

Turkey is a very important case. Its Western orientation is a fundamental building block for regional stability. We need to give strong signals to Turkey that the United States and the European Union are committed to its integration into European structures and to encourage continued reform. We consider political reforms passed by the Turkish parliament in August to be groundbreaking, and we await their active implementation.

Through these reforms, Turkey and the Turkish people have declared their firm desire to move toward Europe. The U.S. government feels that the European Union should recognize these important steps.

Russia is also central to the vision of Europe whole and free. The European Union's relationship with Russia is likely to change as a result of enlargement. The United States and the European Union must work together to see that Russia continues on the path of political and economic reform. We must also work harder to reassure Moscow that enlargement is not a threat but that Russia will actually benefit from it.

The coming years offer tremendous opportunities for the United States to advance Transatlantic peace and prosperity jointly with the European Union as a group, and individually with EU member states. The remarkable level of U.S.-EU economic activity should continue to grow.

U.S. trade and investment with the successful aspirants should register gains similar to those that resulted from the entry of Spain and Portugal into the European Union in the 1980s. These gains will be more pronounced if the aspirants embrace and implement the elements of

EU rules and regulations that will measurably improve their business and investment climates, enhance effective governance and reduce corruption.

Moreover, the economic benefits will be greater if successful aspirants ensure that their government bureaucracies contribute to finding dynamic solutions to the many challenges and do not become constraints on economic and societal responsiveness.

Without a doubt, the year ahead will be significant. It will challenge the European Union and EU member states and the United States to work together to ensure that EU enlargement proceeds smoothly and with the greatest possible prospect for success. Simultaneously, we shall be meeting a similar challenge as NATO welcomes new members.

The United States has long demonstrated its support for the European Union and will do so clearly and often in the coming year when the accession process moves to the critical phase of referendums and ratification.


This article was published in European Affairs: Volume number III, Issue number IV in the Fall of 2002.