Business Increases Its Share in US-European Relations Spain Meeting Will Seek Ways to Tighten Market Links

Article excerpt

THE search for ways to maintain close US-European ties after the cold war is leading out of diplomatic corridors and into corporate board rooms. US and European business leaders are now in a stronger position than they ever have been to shape the transatlantic relationship.

The immediate opportunity for the private sector arises from an invitation by the Clinton administration and the European Union to nearly 100 executives to meet in Seville, Spain, Nov. 10-11. Their mandate is to map out a practical strategy that will link the US and European markets more tightly.

At a deeper level, the upcoming business dialogue reverses two longtime patterns in US-European relations.

First, trade and investment have begun to displace alliance ties as the main cohesive force binding the United States and Europe together. This sea change was unthinkable during the cold war, when close military and diplomatic links were relied upon to keep US-European conflict in check. Trade negotiators hammered each other for decades with full knowledge that the strategic imperative of Atlantic unity would take precedence over economic disputes. The increased fragility of the security pillar in recent years, however, has shifted weight to the economic foundation of long-term Atlantic partnership.

Second, government officials have shown a newfound willingness to yield the initiative to business leaders. This turnaround is clearly a step in the right direction. While years of pitched trade battles have left a bitter legacy at the official level, US and European firms have invested more than half a trillion dollars in one anothers' markets. Two-way trade exceeds $200 billion per year. Business has a much keener sense than government of what can be done to create new trade and investment opportunities.

Inflated expectations

To be sure, a brief retreat of senior corporate executives is not going to work miracles overnight. Expectations are too high that the business dialogue in Seville will pave the way for the early removal of all barriers between the US and European markets. As a practical matter, a Transatlantic Free-Trade Area is not within reach in the near or midterm - especially in light of the European Union's own daunting agenda for enlargement and monetary union.

In addition, the private sector is not going to turn contentious US-European trade negotiations into a love feast. Business cannot be expected to sacrifice the bottom line for the political objective of Atlantic cooperation.

The most serious complication is the overall imbalance between US and European competitiveness. …