Opinion of the Economic and Social Committee on the 'Transatlantic Economic Partnership` (98/C 407/45)

On 26 March 1998 the Economic and Social Committee, acting under Rule 23(3) of its Rules of Procedure, decided to draw up an opinion on the 'Transatlantic Economic Partnership`.

The Section for External Relations, Trade and Development Policy, which was responsible for preparing the Committee's work on the subject, set up a study group and appointed Ms Davison as rapporteur.

At its 357th plenary session (meeting of 10 September 1998) the Economic and Social Committee decided to change the title of the Opinion to The Transatlantic Economic Partnership and appointed Ms Davison as rapporteur-general. The Committee adopted the following Opinion by 55 votes to eight, with two abstentions:

1. Background and origins

1.1. The current proposals are the latest in a series of initiatives. In 1990 the US and EU considered a new treaty to provide the basis for continued sound transatlantic relations in the post-Cold War era. At the time a more pragmatic approach was favoured, in the shape of the Transatlantic Declaration (TAD) of November 1990. The TAD essentially codified existing cooperation arrangements between the EU and US, such as the bi-annual EU-US summits, and called for cooperation in the economic and commercial as well as political fields. In 1994, a concern that the US might drift into a more isolationist position led a number of European political leaders to propose a strengthening of commercial relations in the shape of a Transatlantic Free Trade Area (TAFTA). The US trade unions AFL-CIO also called for a TAFTA as an alternative to the North American Free Trade Agreement. A cool US response and concern that a formal agreement might undermine the credibility of the new WTO resulted again in a more pragmatic informal approach. This took the form of the New Transatlantic Agenda and the associated Joint EU-US Action Plan adopted in Madrid in December 1995 which covered political as well as trade relations. At the same time the Transatlantic Business Dialogue was established to ensure the involvement of the business community in the transatlantic dialogue.

1.2. Since 1995 there has been some progress in bilateral cooperation on trade. An EU-US Mutual Recognition Agreement (MRA) has been signed covering a limited number of sectors, with the strong prompting of the TABD, and cooperation in other areas, such as science and labour policy, has been strengthened. There has been a useful agreement to act on problems concerning competition in each other's markets. Joint EU-US efforts have also helped bring about the successful conclusion of multilateral negotiations, such as the Information Technology Agreement (ITA) and sectoral agreements in basic telecommunications and financial services in the GATS. But there have also been some serious bilateral trade tensions such as over the Helms-Burton and D'Amato Acts and over food safety issues.

1.3. In March 1998 the European Commission came forward with proposals on how to redouble efforts at strengthening EU-US relations. This focused on trade and took the form of a Communication to the Council, European Parliament and Economic and Social Committee on a New Transatlantic Marketplace Agreement.

1.4. The motivation behind the Commission proposals was three-fold:

- to consolidate EU-US political relations by providing a positive focus for bilateral trade relations that might otherwise be dominated by resolving disputes;

- to benefit from the economic gains to be had from deepening commercial relations, also for consumers, whilst ensuring that the EU's environmental, health and safety policies are preserved;

- to provide an impetus for multilateral liberalisation in the shape of a new WTO round, by demonstrating how further liberalization might occur and by providing a model for wider agreements.

1.5. While the ESC was considering this Communication, agreement was reached at the May EU-US Summit on, among other things, a Transatlantic Economic Partnership (TEP). This later agreement supersedes the Commission's proposals. This Opinion therefore concentrates on the elements included in the EU-US Agreement.

1.6. Compared to the proposals included in the Commission's Communication on a New Transatlantic Marketplace Agreement (NTMA) the statement on a Transatlantic Economic Partnership (TEP), adopted in May 1998, represents a continuation of the ad hoc approach to transatlantic commercial policy pursued in recent years. The TEP retains a number of key elements of the Commission's NTMA proposals, such as the focus on regulatory barriers to market access. But in contrast to the NTMA, the TEP is not a global agreement to be implemented in all its parts. Implementation will depend upon the plan of action still to be decided between the EU and US. This more ad hoc approach will provide each party to the agreement with an opportunity to exclude or give lower priority to 'sensitive` issues. As a result, the impact of the TEP could well be more selective in its impact.

1.7. The most radical element of the Commission's proposals, the negotiation of a free trade agreement in services between the EU and US has been dropped in the TEP approach, as has any suggestion of the establishment of a bilateral dispute settlement arrangement between the EU and US.

1.8. Compared to the NTMA proposals, the TEP places greater emphasis on multilateral solutions to problems of market access or multilateral approaches to agreement on regulatory policy issues.

2. The EU-US trade relationship

2.1. The EU and US are each other's most important sources and destination for foreign direct investment. The economic relationship is balanced as well as important. Each account for around 19 % of each other's total trade in goods. The service sector accounts for over 66 % of the total value added in the EU economies and over 70 % in the US. In 1996, EU investment in the US was valued at 372 bn $ and US investment in the EU at 348 bn $ ().

2.2. Three million jobs in the US depend directly on European investment in the US, through direct employment by European owned firms. Three million more depend indirectly on such investment. US exports to Europe are estimated to support an additional one million US jobs. A similar number of jobs in Europe depend on US investment in Europe and European exports to the US ()

3. General response

3.1. Support for a proactive role for the European Union

The Economic and Social Committee welcomes the initiative taken by the Commission in raising the issue of EU-US relations, although it regrets the focus on trade alone. Recent WTO decisions suggest that strict economics and science are being given priority over legitimate social, environmental and consumer concerns. Questions of a similar nature are bound to be raised over the proposed EU-US trade deal also.

Whilst the EU has much to gain by presenting to the US the areas where US reductions on barriers would benefit our exporters, this should be accompanied by an effort to encourage understanding of the EU's socio-environmental model. For example, the US has successfully created new jobs, but there are questionmarks over job security, the real rates of pay and the social safety net. Furthermore, the US commitment to international environmental action has been disappointing and it has opposed the EU stand on the precautionary principle especially where food safety is concerned.

The initiative taken by the Commission in seeking to deepen the EU-US trade relationship is welcome as long as it is accompanied by an effort to deepen our understanding on the above issues also.

The Committee would like to see a fuller estimate of the impact on jobs and on restructuring sector-by-sector. However, it supports the effort to address some long-standing areas of difficulty for EU exporters and shares the objective of promoting transatlantic economic co-operation in so far as it is consistent with multilateral principles as set out in the GATT and other multilateral agreements.

3.2. The Committee feels that there is a growing need for the European Union to play a leading role in setting the agenda in bilateral and multilateral commercial policy negotiations, not least because some important WTO decisions have not gone our way. Recent developments in the United States illustrate that whilst the United States is not slipping into isolationism, as some of those who proposed the original TAFTA in 1994 feared, it is less able and willing to provide leadership in international commercial diplomacy than it has been in the past. The President suffers from lack of support in Congress for trade initiatives. This is reflected, for example, in the difficulties the US administration has faced gaining fast track negotiating authority. Further, a number of barriers to trade, outlined in the Commission's Report on United States' barriers to trade and investment 1997, remain to be addressed. It was therefore both in the European Union's interest and in the interests of transatlantic relations for the EU to come forward with proposals. The Committee also supports the proactive position of the Commission and the Council in pressing for a new WTO round of multilateral negotiations.

3.3. The Committee endorses the more proactive approach to international commercial policy reflected in the Transatlantic Economic Partnership agreement.

3.3.1. The current proposals concerning closer transatlantic cooperation contained in the TEP do not have as their objective the creation of a transatlantic common market. They represent a means of responding to the changing nature of trade relations and barriers to market access. The focus of negotiations on market access is now on regulatory barriers. In the United States there remain important regulatory barriers to market access at both federal, but more importantly sub-federal (i.e. state) levels. These barriers to market access affect European suppliers and have been documented in the European Commission's Report on United States Barriers to Trade and Investment. They include, for example, regulation of telecommunications services which restrict access to radio communications and mobile and satellite services for EU suppliers.

Sub-federal barriers to market access are equally important. It is no longer acceptable for the United States to expect the EU to retain open markets, whilst it excludes large areas of regulatory policy which restrict market access simply because this regulation occurs at the sub-federal level.

The Economic and Social Committee believes that the aim of the Transatlantic Partnership should not be the creation of a common market, but a measured response to the changing nature of commercial policy, which requires in particular the inclusion of sub-federal level barriers in the United States that have been systematically excluded from multilateral agreements. It should be accompanied by agreement on social, environmental and consumer issues.

3.4. Implementation

In its 1996 Opinion on Relations between the European Union and the United States (CES 701/96) the Committee supported the pragmatic approach of the TMP, as opposed to the conclusion of any formal transatlantic free trade agreement, because it was concerned that a TAFTA would be against the spirit of multilateralism reflected in the establishment of the WTO. A clear disadvantage of a sector-by-sector pragmatic approach is that when difficulties are faced in a sector there is no cross sector dynamic to help promote agreement. In the absence of such cross sector dynamic, progress will depend on the ability of the parties to find common solutions and on political will. On the other hand, the equivocal attitude to any new trade agreement in the United States means that visible early achievements will be needed. A solution would be sector-by-sector progress combined with the discipline of clear target dates. In its 1996 Opinion the Committee expressed some concern that the TMP did not provide for any formal or regular review procedure to help ensure that sector negotiations made progress. As a result progress in achieving the aims of the TMP has been slow, with the result that new initiative has been necessary.

3.5. The Committee holds to the view that any formal agreement in transatlantic commercial relations which presented a fait accompli to the rest of the world would undermine the spirit of the WTO and should therefore be avoided, but it remains concerned that once again pragmatism could mean lack of progress. The TEP also lacks for the time being any target date that might help focus the minds of those negotiating sector issues. Unless implemented by mid-2000 the initiative may fail.

3.6. The Committee asks that the Plan to be established as mentioned at the end of the TEP set clear target dates and asks the European Commission to formally report to the European Parliament and Economic and Social Committee on progress in achieving both the aims of the TEP and its socio-environmental agenda.

3.7. Bilateralism versus multilateralism

The TEP sets out ten shared objectives for multilateral negotiations. Subject to detailed comments the Committee broadly supports these shared objectives. The Committee notes that the focus of the TEP compared to the Communication gives shared objectives in multilateral negotiations a more prominent role. The Committee welcomes this shift in emphasis.

3.8. The Commission's Communication goes out of its way to ensure that the proposals for deepening transatlantic commercial relations are compatible with the EU's support for multilateral solutions. It must be recognised, however, that even informal agreement between the European Union and the United States will set a precedent for future multilateral negotiations in the WTO. The TEP agreement of 18 May 1998 specifically refers to how 'reinforced partnership can be instrumental in setting the agenda for a more open and accessible world trading system`. For such a trading system to be multilateral, the support of other WTO members will also be needed especially if a new WTO round of negotiations is to be successful. Support from other members of the WTO is, however, unlikely to be forthcoming if agreement between the EU and US is presented as a fait accompli. The call for the 'adoption of common positions` on the further improvement of the Agreement on Trade Related Intellectual property Rights (TRIPs) included in the TEP risks being seen as just such a fait accompli by other WTO members.

3.9. In order to avoid bilateral negotiations between the EU and US undermining multilateral efforts, it will be necessary for work to proceed in parallel with negotiations within the WTO. Given the WTO's work programme established at the 1996 WTO Ministerial in Singapore and the commitment to preparing for a new round shown at the Geneva Ministerial to mark the 50th anniversary of the GATT in May 1998, there is hardly any policy area covered by the TEP which cannot be worked upon within the WTO framework.

3.10. The Committee urges the European Commission and Council of Ministers to ensure that work in the EU-US bilateral negotiations is paralleled by preparatory work in the WTO on the next round of multilateral negotiations.

3.11. The question arises whether negotiating the TEP could divert resources from the more important forthcoming WTO Round. The Committees find the proposals sufficiently realistic and well received by business on both sides of the Atlantic to be worthwhile. In some cases they can also play a pathfinder role for WTO negotiations, especially if accompanied by an understanding on socio-environmental aspects.

3.12. Following up its commitment to the development of the world's poorer countries, the Committee endorses the objectives set out in section 8 of the TEP Statement on shared EU and US objectives in multilateral negotiations. It would, however, like to stress the following points:

3.13. The Committee welcomes the commitment in the Statement to cooperate in helping to ensure that the least developed countries benefit from the multilateral trading system. This requires an across the board improvement in EU and US trade, debt and aid policies, especially for Africa. The Committee welcomes increased co-operation in this area following its prioritizing in the previous Opinion and looks now for significant results.

3.14. The Committee hopes that the use of the word partnership implies a greater commitment to cooperation in the wider arena - overseas aid, environment, labour and consumer standards, monetary affairs and relations with the rest of the world. Unless legitimate labour, environment and consumer concerns are recognized in the trade debate, there is a risk of public support for any trade initiatives ebbing away.

4. The Issue of Extraterritoriality

Libertad (Helms-Burton) and ILSA (D'Amato) Acts

4.1. The 18 May EU-US summit appeared to find at least partial solutions to the problems created by the US Libertad and ILSA Acts, in which efforts by the US to apply its laws extraterritorially to the EU have created serious tensions in transatlantic relations. There was in effect a three part package.

4.2. The US Administration has agreed to waive action under ILSA against a number of EU companies investing in the Iranian energy sector. It has also agreed to seek Congressional approval for an amendment to Title IV of the Libertad Act that would provide scope for an indefinite waiver by the US for the EU. The US Administration is also willing to 'take soundings of Congressional opinion and consult with Congress` with a view to obtaining a waiver from Title III provisions.

4.3. In return for this US position the EU has agreed to an Understanding with Respect to Disciplines for the Strengthening of Investment Protection. This is a political arrangement but the two sides have also agreed to submit it jointly to the WTO with a view to establishing stronger plurilateral protection against expropriation. EU support is conditional upon US implementation.

4.4. The third part of the agreement was a statement on Transatlantic Partnership on Political Cooperation which seeks to avoid conflicts such as those created by the two US Acts in the future. This part of the agreement sets out the principles to be followed in applying economic sanctions. It states that preference should be given to multilaterally agreed sanctions, preferably endorsed by the UN Security Council. The statement leaves each side free to adopt sanctions if it is not possible to obtain multilateral support, but the statement obliges the EU and US 'not to seek or propose, and [to] resist, the passage of new economic sanctions legislation` seeking extraterritorial reach. In other words the US Administration is now obliged to resist Congressional legislation of the Helms-Burton/D'Amato type.

4.5. This is a clear expression of the will of the Administration, but there is no way of ensuring that the US Administration will be successful in resisting Congressional legislation. Indeed there is no certainty that the Hamilton-Crane-Luger Bill, which would create sanctions waivers and give more scope to the President, will pass. Although US business widely supports the Bill it is failing to convince a Congress with its eye on forthcoming elections (3 November). Pressure from ex-Cubans and other interest groups is more vocal.

In return the 'partner not imposing sanctions` is obliged to pursue the common political objectives, such as political reform in a target country, but 'in its own way`. In other words this means the EU will have scope to pursue a policy of critical engagement as it has vis-à-vis Iran.

4.6. The Committee repeats its condemnation of US extraterritorial legislation and demands prompt US action.

4.7. The Committee welcomes what progress has been made in resolving the tensions in transatlantic relations created by the inappropriate US attempt to apply its laws extraterritorially and calls for progress in the implementation, by the US Congress, of the political arrangement reached at the May 1998 EU-US Summit.

- The Committee welcomes closer EU-US cooperation in the fight against terrorism, the rise in organized crime and drugs trafficking.

International cooperation should give high priority to these issues.

- The Committee has also welcomed and supported proposals for rewarding the observance of human rights and basic social rights under the new GSP.

- There is a need for greater EU-US cooperation in trade-related foreign policy issues, including extension of the principles of the EU code of conduct for arms exports.

5. Technical Barriers to Trade

5.1. The reduction and or elimination of technical barriers to trade was one of the central objectives of the Commission's Communication and has been carried over into the TEP statement. The TEP statement calls for efforts to build on the existing success in negotiating mutual recognition agreements in conformance assessment, which were signed during the EU-US summit of 18 May in London. In this area the TEP also goes into somewhat more detail of how this objective is to be achieved. The approach to be adopted is essentially a European approach to the removal of technical barriers to trade, namely efforts to develop mutual confidence in each other's procedures and practices and where possible convergence. This would enable not just mutual recognition of test results but also the acceptance that regulation and certification in the other party is equivalent. The TEP also calls for an intensification of the dialogue between scientific and other expert advisors, standards setting bodies and regulatory agencies. The Committee considers that some modification of the terms of reference of regulatory bodies will be needed to encourage them seriously to engage in the trade debate. Furthermore, consumer and environmental interests need to be consulted on any amendments in standards relevant to them.

5.2. The Committee endorses, as it did in its opinion of 1996, the extension of such efforts to remove technical barriers to trade provided that relevant non-business interests are fully involved. It also endorses the selection of telecommunications, chemicals and motor vehicles made in the Commission's proposals as sectors in which work towards mutual recognition should be redoubled.

5.3. The TEP Statement points out that the WTO Agreement on TBTs (in Article 6) provides for and indeed encourages, recognition agreements between WTO members. Any mutual recognition agreement would therefore be compatible with the WTO rules. By concluding bilateral recognition agreements the EU and US can therefore fulfil a pathfinder role in the WTO as envisaged in the TEP. It would also be in line with the TBT Agreement to provide information to third parties on the work of the EU and US in this field.

5.4. The Committee urges the Commission and Council in developing work on mutual recognition in the framework of the TEP to provide the WTO with information on its work programme and to afford third country participation at the earliest stage possible.

5.5. The TEP calls for strengthening regulatory cooperation in the field of human, plant and animal health, including biotechnology and recognises that this is controversial. In the Commission's Communication it states that in such cooperation, standards 'should maintain at least our existing level of protection`. Although the TEP states that 'high standards of safety and protection for health, consumers and the environment` will be maintained, there is no mention in the TEP of the safeguard clause. Given there is still a fundamental distinction between the EU approach, which uses the precautionary principle and the more science-based US approach, convergence must raise some questions concerning one or other approach.

5.6. In its 1996 Opinion, the Committee called for inclusion of economic and social interests in the trade debate since they have the power both to help create and help defuse trade tensions. Mention of dialogue with consumer and farmer representatives is missing.

5.7. In the EU proposals for the implementation of the TEP the Committee would like to see guarantees that EU standards of health and environmental regulation will not be weakened as a result of regulatory cooperation with the United States. In particular it requests clarification of whether there will be a safeguard built into any agreement with the US to ensure EU standards are not weakened.

5.8. The Committee calls on the new consumer dialogue and the farmers' dialogue to discuss the overlap between food standards and trade issues as soon as possible.

6. Industrial Tariffs

6.1. The Committee would support a target date of 2010 for the MFN elimination of all industrial tariffs on the condition that a critical mass of other WTO members were willing to sign up to this agreement. This approach follows the pattern of the Information Technology Agreement (ITA) of 1996. The Committee regrets the weak wording of the TEP and the absence of a target date.

6.2. The Committee urges the Commission and Council to seek to establish a target date for the elimination of all industrial tariffs, on the basis of a critical mass [equivalent to that used in the ITA].

7. Agriculture

7.1. The Committee firmly supports the exclusion of agriculture from the bilateral TEP agreement. The TEP envisages any further liberalization of agriculture to occur instead within the context of multilateral negotiations. The only element of agricultural policy referred to in the TEP is work on regulatory cooperation such as in the field of food and health standards.

7.2. In its previous opinion on transatlantic relations in 1996 the Committee recognized the link between CAP reform and further liberalization of market access in the agricultural sector. In 1996 the Committee was of the opinion that there were other sectors in which more rapid progress could be made than agriculture, but that CAP reform would be needed in order to enable the European Union to adopt a credible position in the new round of negotiations on agriculture scheduled to start in 1999.

7.3. The Committee, as noted above, supports the early definition of a clear EU position in the multilateral negotiations that are likely to begin in 1999/2000. Such a line would be in the interests of the EU and of international trade. But the EU will only take the offensive if it has a credible negotiating position. The Committee is of the opinion that such a credibility requires further reform in agriculture and in the CAP in particular along the lines of the Agenda 2000 proposals.

7.4. The Committee endorses an approach to the coverage of agriculture which places negotiation within a multilateral context. The Committee is of the opinion that the EU must establish a credible position on further negotiations regarding the continuation of the negotiation process as stipulated by Art. 20 of the WTO Agricultural Agreement.

8. Services

8.1. The TEP adopts the aim of 'substantially improving market access`, but excludes audio-visual and maritime transport. The Committee would support the targeting of specific sectors rather than across-the-board negotiation.

8.2. Certainly a number of issues make the inclusion of audio-visual inappropriate. Besides the important questions of language and culture, there is the lack of agreed international standards, for example on violence. This latter area should be given careful attention in the context of the dialogues.

8.3. There is considerable scope (for example, the US mobile phone system is incompatible with that of the rest of the world) for enhanced market access in the US in financial services and telecommunications. Any liberalization in transatlantic or multilateral services must provide clear exceptions to ensure effective prudential control and to protect consumers such as those living in sparsely populated areas. It should be made clear that social security schemes and workers' cooperation in mutual insurance schemes are excluded. The Committee would not want to see such co-operative schemes which encourage the better-off to subsidize the worse-off undermined.

8.4. Transatlantic negotiations could, however, address market barriers caused by home state regulatory control and the plethora of different rules in the US at State level. The EU banking sector is relatively open, for example. Regulatory requirements are the same for US banks sited in the EU as for EU banks. However, the lack of integration of the US banking market makes it difficult for EU banks to penetrate the various state markets. This is an area where progress is important since the EU has a strong financial services sector.

8.5. The Committee favours a cautious approach giving priority to progress in banking services and to opening markets in the US protected by state-level regulation and by the lack of integration in the US regulatory system.

8.6. With regard to rule-making the in-built agenda includes a number of sensitive issues such as rules on 'origin` and safeguards under the GATS. The Committee believes that such rule-making should be negotiated within the multilateral setting rather than in bilateral talks.

8.7. The Committee welcomes the progress being made in the mutual recognition of qualifications.

8.8. The Committee believes, however, that 'rule-making` in the service sector should be negotiated multilaterally.

9. Investment, competition, public procurement and environment

9.1. The TEP refers to the objective of developing common approaches in appropriate multilateral fora on these issues.

9.2. Investment

9.2.1. Negotiations have been taking place on investment within the context of the MAI (Multilateral Agreement on Investment). Many of the difficulties in the MAI have resulted from EU-US differences. However, in the area of investment, unlike competition and public procurement, there are important developing country interests at stake. It is therefore important that developing countries are not presented with a fait accompli in the WTO.

9.2.2. A major problem the MAI negotiations have again raised is the failure to establish a link between investment on the one hand and core labour and other standards of business behaviour on the other. As noted above, the Committee supports the position that any agreement on investment should be linked to the inclusion in an appropriate way of the OECD guidelines on multinational companies.

9.2.3. The Committee has already made clear its position on investment, which includes the view that any multilateral agreement must incorporate the OECD guidelines on multinational companies in an appropriate way. It hopes that the labour, environment and consumer dialogues will be able to encourage EU and US government support for these principles.

9.3. Competition Policy

9.3.1. The TEP states that both sides will seek to further strengthen cooperation in competition policy. The EU and US have already added a 'positive comity` provision to the bilateral cooperation between them on competition policy. This provides that when one party finds that anti-competitive practices in the other party's territory affects its own market, it may request the competition authorities in the other party to act against such practices.

9.3.2. The European Union has sought to get competition policy onto the multilateral agenda of the WTO. At the Singapore Ministerial Meeting in 1996 a Working Group on International Competition Policy was established within the WTO, which is due to report at the end of 1998. In the work of this Working Group the EU has led calls for the establishment of multilateral principles covering competition within the WTO. The US has argued that a multilateral approach is not possible or necessary and that bilateral cooperation can resolve all problems.

9.3.3. An agreement on competition policy would help to provide a model for developing countries and to answer criticisms of the power of some multinationals, for example, selling seeds.

9.3.4. The Committee believes that work on multilateral principles for competition should continue within the WTO. Work within the WTO should be promoted with equal vigour to that in bilateral talks between the EU and US.

9.4. Public Procurement

9.4.1. There is a general reference in the TEP to the need to 'increase and facilitate access to public procurement markets` (in other words government/state purchases). Increased access to procurement markets in the US is important because of a number of 'buy US` schemes. Access to markets could be facilitated through the wider use of electronic information on tenders and the use of electronic processes in tendering itself.

9.4.2. At present there is no multilateral agreement on public purchasing, but only a plurilateral agreement which is broadly based on the EU-US agreement reached in 1994 as part of the Uruguay Round process. Bilateral progress would not therefore clash with any multilateral approach. One of the reasons, however, that the WTO Government Purchasing Agreement has only been signed by a limited number of countries is its complexity and thus the high costs of compliance relative to the potential gains for smaller or developing country members of the WTO. A simplification of the GPA would therefore contribute towards its wider use without it being imposed on developing countries.

9.4.3. The Committee urges the Commission to continue to press for improved coverage of US public purchasing, especially at the state level.

9.4.4. The Committee urges the EU and US to use bilateral talks on public purchasing as an opportunity of exploring how the complex nature of the existing plurilateral agreement might be simplified, with a view to gaining more signatories.

10. Extending the Transatlantic Dialogue

10.1. The TEP Statement also includes reference to the desire of both sides to promote a wider participation in the Transatlantic Dialogue. This is an objective the Committee stressed in its 1996 Opinion on Transatlantic Relations. It therefore welcomes this broad aim, but is concerned that progress in a number of areas has not been great. Whilst the Transatlantic Business Dialogue has been successful and now includes the Small Business Dialogue, other elements of the Dialogue have made little or no progress.

10.2. The Environmental Dialogue will be launched in Vienna in the Autumn at a high profile conference but, disappointingly, the Consumer Dialogue, which was due to begin this summer has had to be delayed. As funding is a key issue it is important that these dialogues include the presence of foundations. The Labour Dialogue has made limited progress and, although it has met on an informal basis, has yet to develop a focused agenda. The Farmers' Dialogue is still informal in nature. Inclusion of government representatives in the dialogues at a senior level would help to raise their profile.

10.3. The Dialogue on education and training has been successful, with a high profile conference in Akron Ohio in early 1998 on workforce training and a follow-up seminar in London in May on access to work for the disadvantaged. A number of transatlantic partnerships are expected to grow out of these conferences.

10.4. One problem has been the lack of links between these Dialogues. The Transatlantic Civil Society Dialogue which might have served as an umbrella is playing the more focused role of a Transatlantic Donors' Dialogue. The idea for example coming out of the Akron conference, and from a Committee Opinion, for a transatlantic prize for businesses bringing the disadvantaged into training or work will only succeed if there is cooperation with the Business Dialogue. The Committee intends to encourage this.

10.5. One issue in the area of people-to-people links which has not been addressed is the red tape faced by transatlantic visitors.

10.6. The Committee is concerned that TABD's achievements may soon become limited by the lack of consensus in the US on the benefits of international trade. In order to address the criticisms from some labour, environment and consumer interests, the Committee recommends that TABD interact more with these interests. This could also be achieved through a more formal overarching transatlantic economic and social dialogue. It also hopes that US business will make more effort to convince US public opinion of the advantages of international engagement.

10.7. The Committee would therefore like to see more emphasis in the implementation of the TEP on reinforcing people-to-people links. This means supporting and encouraging the existing and proposed transatlantic dialogues and creating a forum for communication and cooperation between them. The Committee proposes to organise an annual meeting with all EU economic and social interest groups representatives involved in Transatlantic dialogues and representatives from EU Institutions to review progress made and discuss the work programme for the year to come. This would increase transparency, facilitate the adoption of a common EU approach and provide the basis for an overarching transatlantic economic and social dialogue, which the Committee could help to organize.

Summary/Conclusions

The Committee welcomes the efforts of the Commission to strengthen and deepen the EU-US relationship. It prefers the more limited trade agenda set by the Transatlantic Economic Partnership (with the proposed amendments) to the wider trade proposals of the New Transatlantic Marketplace.

Nonetheless, the Committee is disappointed by the focus on trade issues alone, as well as by the still lacking contribution from labour, environmental and consumer stakeholders in the trade debate. This dissatisfaction is reflected by our partner organizations in the US also. The Committee would like to see a renewed effort in the areas it suggested in its Opinion of 30 May 1996 ().

Firstly, there would be more confidence in EU-US trade co-operation if it were underpinned by a fruitful discussion on the creation of stable jobs with adequate social protection. Job creation is, after all, a major aim of the TEP.

Secondly, despite increased EU-USA consultation on environmental issues, there was failure to agree sufficient action against global warning at the Kyoto conference in November 1997. Renewed efforts need to be made to help the US find a method acceptable to its electorate to meet these important international obligations.

Thirdly, the Committee awaits progress in the area of overseas aid, preferably in consultation with Japan also, in order that the needs especially of Africa can be given the high political priority required.

Fourthly, the new transatlantic dialogues need to be properly resourced and heeded at senior political level, so that they can make their own input into the EU-US trade relationship.

Brussels, 10 September 1998.

The President of the Economic and Social Committee

Tom JENKINS

() The New Transatlantic Marketplace, 11.3.1998 - EU Commission.

() The new Transatlantic Marketplace: Analysis of economic impact, 15.4.1998.

() CES 706/96, OJ C 212, 22.7.1996.