[Congressional Record Volume 145, Number 90 (Wednesday, June 23, 1999)]
[Extensions of Remarks]
[Pages E1374-E1375]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


UNDER SECRETARY OF STATE STUART EIZENSTAT DISCUSSES RELATIONS WITH THE 
                             EUROPEAN UNION

                                 ______
                                 

                            HON. TOM LANTOS

                             of california

                    in the house of representatives

                        Wednesday, June 23, 1999

  Mr. LANTOS. Mr. Speaker, last week the Committee on International 
Relations held an excellent and timely hearing on the United States 
relationship with Europe and the European Union. This hearing was 
particularly timely as it was held on the eve of the G-7 Summit in 
Bonn, Germany, at which United States representatives, including our 
President, held critical discussions with our European allies and the 
European Union. This hearing was the first in a series of planned 
committee hearings on the transatlantic relationship and its importance 
to United States political, economic, and security interests.
  Mr. Speaker, with total trade and investment between the United 
States and the European Union now in excess of $1 trillion annually, 
the EU is already our largest single trading and investment partner. 
The EU is also the world's largest single market, and with the 
establishment of the new single European currency--the euro--this 
market will continue to be the most important market for American firms 
and the most important external market for the economic health of our 
nation.
  While we tend to give greater attention to the economic and trade 
aspects of our relationship with the European Union, we must not ignore 
the growing importance of the political dimension of our relationship. 
The European Union is moving toward greater political involvement and 
it plays a key role in the coordination of member foreign policies, Mr. 
Speaker. The EU will play a critical role in the reconstruction of 
Southeastern Europe, it plays a vital role in encouraging the 
development of democratic political institutions, a civil society and a 
market economy in Central and Eastern Europe and in Russia. 
Furthermore, the EU has been a partner with us in encouraging political 
stability and economic prosperity in North Africa and the Middle East.
  The principal administration witness at this important hearing of the 
Committee on International Relations, Mr. Speaker, was Under Secretary 
of State Stuart Eizenstat. He is the quintessential outstanding and 
extraordinary public servant in this city, who has demonstrated his 
commitment to the highest quality of public service in a variety of 
most important capacities as our ambassador to the European Union and 
in key sub-cabinet posts in three departments--the Department of 
Commerce, the Department of State, and now the President has nominated 
him to serve as Deputy Secretary of Treasury.
  Mr. Speaker, I ask that a summary of the opening statement made by 
Secretary Eizenstat at our recent hearing be placed in the Record. This 
excellent statement reflects the best current American thinking about 
the issues of concern regarding the United States and our relationship 
with Europe and the European Union.

Statement of Under Secretary of State Stuart Eizenstat to the Committee 
               on International Relations, June 15, 1999

       Mr. Chairman, I very much appreciate the statements that 
     have been made by the members of the Committee. It is an 
     honor to be here with my good friend David Aaron, the 
     Undersecretary for Trade at the Department of Commerce.
       With the European Union, we share a commitment to the 
     promotion of security, prosperity and democracy--not only in 
     the Euro-Atlantic area but beyond it as well. It is no 
     hyperbole to suggest that the relationship between the U.S. 
     and the European Union may be the most important, influential 
     and prosperous bilateral relationship of modern times. Two-
     way trade and investment flows are now some $1 trillion 
     annually, supporting more than 6 million jobs on both sides 
     of the Atlantic. One in 12 industrial jobs in the United 
     States is in a European owned factory, and European countries 
     are the biggest foreign investors in 41 of our 50 U.S. 
     states.
       We have launched the Trans-Atlantic Economic Partnership, 
     covering 10 broad areas to reduce existing trade barriers, 
     improve regulatory cooperation, and establish a bilateral 
     dialogue on multilateral trade issues in the WTO. We've 
     agreed with the EU that the WTO should begin a new broad-
     based round of trade negotiations, following a structure that 
     will yield results expeditiously in agriculture services and 
     other areas. We've also agreed to seek permanent commitments 
     by WTO members not to impose duties on electronic commerce 
     transactions, an area where Secretary Aaron has had a 
     particular impact.


                     Rebuilding southeastern Europe

       There is no more vivid example of our common values and 
     goals than the work we are doing with the EU right now in the 
     post-conflict reconstruction of Southeastern Europe. As the 
     confrontation in Kosovo comes to an end, together we have a 
     big job before us. Our joint aim is to build a solid 
     foundation for a new era of peace and stability, helping a 
     region that has been one of the continent's most violent, 
     become instead part of the European mainstream.
       We forged a new stability pact for the region. And we 
     believe that just as we have born the lion's share of the 
     military expenditures, it is only right that the European 
     Union bear the lion's share of the reconstruction. And this 
     is something that they themselves have indicated they wish to 
     do.


                   Enlargement of the European union

       The 15 member EU is now about to undertake its largest 
     enlargement ever. It will be one of the most important 
     challenges facing Europe in the 21st Century. I would say to 
     my dear friend, Congressman Lantos, that when he talks about 
     great enterprises, this expansion will be a historic 
     opportunity to further the peaceful integration of the 
     continent, if it is done right.
       The EU plans to spend, on its new members, between 2000 and 
     2006, the equivalent in 1999 dollars of what we spent on 
     Western Europe through the Marshall plan. It will encourage 
     cooperation, reinforce democracy, and reduce nationalistic 
     and ethnic tensions. And if in the end it is successful, the 
     European Union will be the largest single market in the 
     world, with over 500 million citizens in an economy 
     significantly larger than our own.
       Thirteen countries have applied for EU membership so far. 
     And the European Commission is in the middle of negotiations, 
     with six of those 13, and another five are going through 
     initial screening. The year 2003 is the likely earliest date 
     for excision of the first wave of candidates, and frankly the 
     balance of writs are for a later rather than an earlier date 
     for enlargement.
       Enlargement should be a net-plus for U.S. goods and 
     services, to help the countries of Eastern and Central 
     Europe. Nonetheless, we will insure that our commercial and 
     economic interests are not disadvantaged.
       We are working both with the EU and its candidate states to 
     prevent the erection of new barriers to trade as part of the 
     enlargement process. The main problem concerns the interim 
     period between now and ultimate excision. Because at 
     excision, they will take the common external tariff of the 
     European Union which is generally quite low. But in the 
     interim, as tariff levels from EU products drop to zero in 
     the candidate countries, they remain at higher levels for 
     U.S. products to our disadvantage. We're working with the 
     candidate countries to find suitable remedies. We're 
     encouraging them to adopt the lower EU tariff schedules as 
     soon as possible. Slovenia, for example, has begun to do 
     this. The European Commission has agreed with our strategy, 
     and excision candidates are beginning to respond.
       Certainly we will be economic competitors, but with our 
     combined strength together, we'll also be able to set a 
     global agenda supporting democracy and open markets. We 
     share, if I may say so, more values with Europe than we do 
     with any other region.
       Enlargement of the EU requires the candidate counties to 
     conform their laws and practices to EU norms. It would almost 
     be like saying that a new state coming into the United States 
     has to conform of every page of the code of federal 
     regulations. It is a mammoth job. It requires change not only 
     in the candidate countries, but also on the part of the 
     current member states as well.


                       common agricultural policy

       The largest step is the reform of the Common Agricultural 
     Policy, or the CAP. The EU has now agreed to put a ceiling on 
     total expenditures over the next several years. But this 
     cannot be done without reforming its agricultural subsidies.
       Almost half of the EU's overall budget, over $50 billion, 
     is earmarked for agricultural subsidies. The European 
     Commission's modest CAP reforms are inadequate to do the job. 
     They will complicate the process of enlargement, and they do 
     not go nearly far enough in terms of reducing the distorting 
     effects of the CAP on the world trading system. Other 
     countries, including developing countries will continue to be 
     forced to pay for European farm inefficiencies by losing 
     sales at home and in third markets.


              the amsterdam treaty/a common foreign policy

       Historically, every enlargement of the EU has been preceded 
     by a deepening of the level of internal cooperation. They are 
     already slow in many cases to respond to a crisis. This will 
     be further complicated when they expand to 21 members. With 
     the advent of the Amsterdam Treaty on May 1, we're witnessing 
     a dramatic shift in power. The European Parliament now has a 
     greatly enhanced role in EU decision-making, and will enjoy 
     equal say or co-decision with the council administrators on 
     more than two-thirds of all EU legislation.
       The Amsterdam Treaty will also result, Mr. Chairman and 
     members of the committee, in major changes in ways the EU 
     conducts its foreign policy. A new high representative for 
     its common, foreign and security policy will give the EU 
     greater visibility on the international scene. They have 
     selected NATO Secretary General Javier Solana as the first 
     High Representative for their common foreign and security 
     policy. He has been an extraordinary Secretary General of 
     NATO and we believe he will perform equally well at the EU 
     and we look forward to working with him.
       An EU with an effective foreign and security policy would 
     be a power with shared values, and strong transatlantic ties 
     with which

[[Page E1375]]

     we could work globally to solve problems. The EU has also 
     chosen former Italian Prime Minister Prodi as the next 
     president of the European Commission. We have worked well 
     with him before, and we have great confidence in him as well.


                          current trade issues

       We often let the immediacy of our current trade disputes 
     blind us to the very real benefits that we both enjoy from 
     access to each other's markets. But obviously there is a 
     tough road ahead. And yet we can't allow our relationship to 
     be defined solely by these disputes.
       All too often, nevertheless, the EU takes actions, such as 
     its unilateral hush kits regulation where Ambassador Aaron 
     did such a fabulous job of at least temporarily diverting a 
     problem. Or it's counterproductive response to the previous 
     WTO panels on bananas and beef from exacerbating trade 
     tensions. It's for that reason that we have suggested an 
     early warning system to identify such problems before they 
     burst into full-scale disputes.
       We are indeed facing a tough set of trade disagreements, 
     and we continue to hammer home the principle of fair and 
     transparent trade rules: of the need for the EU to respect 
     international commitments and WTO rulings, of abiding by 
     scientific principles and not politics in making health, 
     safety, and environmental decisions.
       The need for a clear and rational trading principle may be 
     greatest in the need of biotechnology. Within a few years, 
     virtually 100 percent of our agricultural commodity exports 
     will either be genetically modified organisms (GMO) or mixed 
     with GMO products. And our trade in these products must be 
     based on a framework based on fair and transparent 
     procedures, which address safety on a scientific and not a 
     political basis.
       We, since 1994 approve some 20 GMO agricultural products. 
     Since 1998, Europe has not approved any. There is no 
     scientifically based governmental system to approve GMO 
     products, therefore the European public is susceptible to 
     ill-informed scare tactics. The EU approval process for GMOs 
     is not transparent, not predictable, not based on scientific 
     principles, and all too often susceptible to political 
     interference.
       We've been working to break this pattern of confrontation 
     and indeed there are leaders in Europe who recognize that an 
     EU regulatory system drawn up in accordance with its own 
     international trade obligations would be a boon to both 
     business and consumers. We have a new biotech-working group 
     to address GMO issues.
       The same can be said for beef hormones; where the European 
     public is subjected to daily scare tactics which try to 
     portray the hormone issue as a health and safety issue, when 
     indeed there is broad scientific evidence that beef hormones 
     are completely safe. There is no reason why American beef 
     producers should pay the price for internal political 
     calculations in Europe inconsistent with WTO principles.
       To conclude, as we look toward the future, our goal is to 
     work together to promote our goals of security, prosperity 
     and democracy. Together we can accomplish more than either 
     the U.S. or the EU can by acting alone.


                   we must work together with europe

       We want to work more effectively to deal with past breaking 
     crises, to find ways of managing our disagreements before 
     they get out of hand, and to expand areas of joint action and 
     cooperation.
       We are working on just that and the hopes that we can 
     articulate a new vision at the June 21 U.S.-EU summit in Bonn 
     through a new Bonn declaration. This would fit in with our 
     larger goal of using 1999 for a series of summits, NATO, OSCE 
     and the U.S.-EU summit to strengthen the abiding European-
     Atlantic partnership which has been so important to maintain 
     stability in Europe for the 20th Century, and to make sure it 
     does the same for the 21st.

     

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