Euro Brash: Why George W. Bush Takes Orders from Pascal Lamy

By Kulish, Nicholas | The Washington Monthly, April 2004 | Go to article overview

Euro Brash: Why George W. Bush Takes Orders from Pascal Lamy


Kulish, Nicholas, The Washington Monthly


Pascal Lamy, the European Union Trade Commissioner, is a 57-year-old Frenchman, a graduate of Paris' elite Ecole Nationale d'Administration, and a longtime member of the French Socialist Party. He smokes cheroots, works tirelessly on behalf of France and Europe, and his aggressive some would say ruthless--personal style has earned him the nickname "Exocet," after a French-built missile. He is not exactly George W. Bush's or Tom DeLay's kind of guy.

In late February, Lamy paid a visit to Washington to meet with senior members of Congress and delivered an audacious demand: If Congress did not eliminate a large tax break for American exporters by March 1, the European Union would slap $4 billion in retaliatory trade sanctions against the United States. When it comes to taxes, President Bush hasn't been swayed by angry Democrats, a burgeoning federal deficit, worried economists, a stagnant job market, or moderates of his own party. But faced with Lamy's threat, he caved. A few days after the Exocet's visit, the president called upon Congress to quickly bring America's tax code in line with the E.U. Commissioner's demands. House Speaker Dennis Hastert summed up his reaction to the pressured legislative changes at an earlier news conference: "My gut feeling about this is we fought a revolution 230 years ago to stop Europeans from telling us how we have to tax in this country, and it puts the hair up on the back of my neck that we have to consider this at all. But we have to do it."

Conservative columnist Jonah Goldberg has popularized the phrase "cheese-eating surrender monkeys" to deride the French, but on one economic issue after another, it has been the United States that has raised the white flag. In December 2003, the Bush administration lifted tariffs on imported steel after Lamy threatened $2 billion in retaliatory tariffs on U.S. exports, targeting especially those produced in critical election states, such as oranges from Florida. Early this year, the administration had to back away from its unilateral demand for armed sky marshals on flights from Europe after strong resistance from E.U. member states.

Increasingly, decisions made in Washington are being overturned by bureaucrats in Brussels. Three years ago, the U.S. Department of Justice approved the merger of U.S.-based G.E. and Honeywell, only to watch the E.U.'s competition commissioner effectively block the deal. The E.U. claimed jurisdiction because the combined business sold more than $225 million annually in Europe. The trustbusters argued that if the businesses combined, the new company would potentially dominate some sectors of the global aerospace industry, which would have hurt European competitors. Now the European Commission is at it again. In late March, it was expected to levy a fine and require Microsoft to do something that the U.S. government couldn't, or wouldn't: force the company to change its dominant Windows operating system. Where the United States ultimately failed to get Microsoft to give its customers equal access to non-Microsoft browser software, the European Union reportedly wants a version of Windows that gives customers access to competitors of the company's Media Player software.

The war in Iraq taught a clear lesson: Unilateral foreign policy, especially one that ignores Europe, doesn't work. In the run-up to the invasion, the Bush administration gambled that it could isolate Dance and Germany and garner the support of the rest of the U.N. Security Council. Instead, "Old Europe" won the support of most of the other members, and America found itself fighting a bloody guerrilla war in Iraq largely alone. The same lesson now increasingly applies in the economic realm. More than previous administrations, the Bush White House has tried to make economic policy unilaterally, as if the only powers it need worry about are American opinion polls and Beltway trade groups. Yet from trade to taxation, antitrust to safety rules, the Europeans are proving to be powerful competitors who can work against our interests if we ignore theirs.

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