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| OLD FRIENDS, NEW PROBLEMS | |
 June 1, 2000  |
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President Clinton is touring Europe in what may be his last visit to the continent as president. After a background report, Margaret Warner leads a panel discussion of the close, but often contentious relations that exist between the U.S. and its European allies.
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 MARGARET
WARNER: For more on the changing relationship between Europe and the United
States we're joined by John Richardson, deputy head of the European Union's
delegation to the U.S.; David Aaron, former Undersecretary of Commerce
for International Trade in the Clinton administration -- he's now a senior
international adviser at the Washington office of Dorsey & Whitney,
a Minneapolis law firm; Stephan Richter, the German-born publisher of
the TheGlobalist.com, an Internet magazine that covers the global economy;
and Ellen Frost, visiting fellow at the Institute for International Economics,
a Washington research group; she's also the author of Transatlantic
Trade: A Strategic Agenda.
Welcome all of you. |
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| Allies but also competitors | ||||||||||||||||||||
| MARGARET WARNER: David Aaron, how do you see this U.S.-European
relationship? How different is it really over - than it was in the last
decade, over the last decade?
MARGARET WARNER: Is it the end of the Cold War that has in a way given the U.S. the luxury to have these disputes?
MARGARET WARNER: How do you see it, Ellen Frost?
MARGARET WARNER: But what do you think is at the root of these new disputes? Some of them are kind of old types - trade -- but some are different. ELLEN FROST: Well, as David Aaron says, the integration of the two economies brings domestic issues into focus, but then there are domestic social values that do differ. The death penalty is a good example. I think there's a tendency in Europe to think of Americans as violent, trigger rather simpleminded people, who are very quick to impose sanctions, even at the risk of hurting European companies and, generally, to lack a more subtle approach to solving human problems. The converse of that of course is that Europe has had to live with dangerous situations, geographically, for a long time, has many more centuries really of diplomacy, and so there's been a difference in style, which has accentuated really the problems here. I don't think they're at the breaking point, but I think they're worrisome. MARGARET WARNER: How do you see it?
MARGARET WARNER: Which was discussed today at the meeting.
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| Cultural differences as the root of confrontation | ||||||||||||||||||||
| MARGARET WARNER: Do you agree with some of your fellow panelists
here that there are cultural differences that underline these trade differences
or differences on something like data privacy?
MARGARET WARNER: You were trying to get in here.
MARGARET WARNER: We litigate it to death. |
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| Working together to solve global problems | ||||||||||||||||||||
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ELLEN FROST: But the problem is it impedes us from acting as partners in the rest of the world, the global economy, the World Trade Organization, this degree of quarreling precludes us from… you know.
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| Europe's complex decision-making process | ||||||||||||||||||||
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MARGARET WARNER: How much do you think this reflects the fact that what was sort of a big brother/little brother relationship for the entire post war period has to have changed, and we're both adjusting to that?
JOHN RICHARDSON: It is different, and It is as complex as the situation here in Washington.
MARGARET WARNER: And on that good news word, we're going to end it. Thank you all four very much. |
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DAVID
AARON: Well, I think you're seeing two basic changes. One is that the
rationale that the Europeans told themselves as to why they are trying
to get together and build a wider Europe, is increasingly changing from
concerns about domestic affairs to concerns about competing with the
United States. And in that lies the obvious danger that that competition
could actually become, actually a very difficult one. The second is
that our relationship is so intense, it is so close, we're like finely
meshed gears, our economy, and these issues keep dropping into it like
grains of sand and creating an enormous amount of noise, but also could
be very destructive at the same time. 
JOHN
RICHARDSON: I think there's a lot in that. During the Cold War we had
to pull together on everything because we were trying to shelter the
rest of the world, in particular to the Soviet Union, a particularly
way of running our societies and our economies, and we did that successfully.
We now have the luxury of being slightly different in how we do that.
But I think you can exaggerate this. What I've seen over the last decade
since the end of the Cold War is European and American values basically
moving together. Europe is deregulated, America has got more interested
in the social aspects of a social market economy. We've come closer,
rather than further apart. 
ELLEN
FROST: I basically agree with John Richardson, but there's an element
of resentment of the big power in Europe. Americans have a tendency
to be a bit triumphalist about their economic successes, and it's only
natural for people in Europe to want to, sort of, poke holes in our
image and focus on the social negatives. At the same time, we do have
serious social problems ask we don't think of them traditionally as
having an impact on foreign policy, so it's a good lesson to us, I think,
look inward and strengthen ourselves as a nation, then we can be a better
partner with Europe in our common agenda. 
STEPHAN
RICHTER: I think it's very simple. If you've been married for 20 years,
you know, it gets tough sometimes and you know each other too well.
And it's not just, you know, he/she, but, you know every in and out,
and that's fortunately where the transatlantic relationship stands.
I mean, Germany was reeducated in the direction of American democracy.
Everybody is shaped by the new economy from the United States, and so
on. But there's something much larger that I think we need to be aware
of and I think Secretary Aaron is very much involved in that. Most of
the conflicts that Europe and the United States now has are really agent
warfares where Europe and the United States look at the global agenda.
If you take at an issue such as data privacy, which is pivotal, where
in my view - 
STEPHAN
RICHTER: -- where in my view in America we have a pretty rotten deal.
We have companies like Microstrategy and so on that is collecting all
the data and there's no guideline how individuals are protected. The
Europeans take exactly the opposite viewpoint. Here we have industry
self- regulation; in Europe we say these companies can do anything to
anybody, let's have some guidelines to protect citizens. That's a failure
of checks and balances as it's laid down in the American Constitution.
You don't have that debate very much domestically. Europe, John Richardson's
European Union and communities actually steps in as an opposition, you
know, as a check and balance on the majority opinion in the United States,
and I think that is a very fascinating development for the other nations
around the world. Yes, we battle heads on all these issues, but we're
also clarifying a lot of hyper-complex issues on the global integration
agenda.
DAVID
AARON: Oh, yes. There's no question about it. I mean, for example, the
death penalty and the question of privacy, there's a lot of guilty consciences
in Europe, and so there's a lot of effort today to show that "no,
we're not going to do that anymore, and not only are we not going to
do it anymore, you shouldn't do it anymore either." I think that
one of the keys here is the fact that technology is also passing up
entirely new questions. The privacy issue is a good example of it. And
when i was negotiating this agreement with the Europeans, it was very
interesting how we had to take some rather antiquated ideas about how
you deal with the privacy issue and apply it to the most modern information
economy in the world which is the United States. And I think we've reached
a pretty good balance here and I think it will help the privacy debate
in America, which is very intense. But we have to take that approach
now. I don't think we can treat these issues like old-fashioned trade
issues where we split the difference, or I bargain here, and you bargain
there, because we're dealing with human health. We're dealing with privacy.
We're dealing with the environment. Each of these issues we have to
take an approach which is essentially problem solving. We both have
a problem, we both have to solve it. 
JOHN
RICHARDSON: I think it's absolutely right what David has said. But I'd
like to come back to the question of differences in culture and indeed
democracy. One of the values we've been selling around the world is
the value of democracy. We have separate democratic systems with different
histories, different traditions, and different values, different cultures.
And there are different ways of looking at things. Different ways of
looking at the death penalty is one example, but also different ways
of looking at privacy, and what you have to reconcile, David, in your
discussions with John Maug in Europe, was two different starting points
on a subject which has to be by definition global, and I think you did
very well in reconciling that. And that's the direction we need to take
in these discussions, while respecting the values which are two different
democracies.
ELLEN
FROST: If I could build on the last two remarks, one of the problems
here is that we tend to channel all of these new issues immediately
into the hands of trade lawyers. No offense. Lawyer culture, as I've
come to call, is a way of thinking of memorizing a brief, going for
the jugular, reaching a deal and then going on to the next case. And
it's an adversarial process. And what David is talking about and John
too is really standing together with Europe and looking at these new
issues and not in a confrontational way, but our U.S. government, in
particular, in the last ten/twenty years or so has seen more and more
and more lawyers come into these positions.
STEPHAN
RICHTER: If we need to be a thorn in each other's side, I hate to come
back to my long term marriage thing, which hopefully we're all engaged
in, but the key thing is really we learn from each other. It is painful.
Imagine how you change a domestic society, there are all these vested
interests. We've had a fascinating situation with the Clinton administration
on a variety of issues, whether it was genetically-modified foods or
whatever. They have said through the FDA that we domestically here in
the United States need to make certain changes in anticipation of agreements
that one day we will have to consume with the Europeans, where there
is no law case, no trade lawyer, nothing. Charlene Barshefsky can't
help you. It is about the future of the world, about allowing technology
to benefit human beings and so on. And that's something in the well
of
the parliament when you have to change a society, do you spend on this
or do you pass the privacy directive or something -- you have to have
the Americans as a pain in every European parliament, so that the finance
minister, or somebody, the chancellor or prime minister can say, we've
got to do it, we've finally agreed on it, that's the only way -- the
same thing here. In that sense all the strife is very good and necessary,
and inevitable if we want to get ahead -- because otherwise those domestic
factions that are always for the status quote will always win, and I
don't think anybody is interested in that. 
JOHN
RICHARDSON: I think there are two points which are important here. One
is I agree with Stephan, we need a lively debate. We accept that nationally.
Why shouldn't we accept it internationally? A lot of what we're talking
about is precisely that, it's debate about things where we disagree.
But to come back to Ellen's point, I don't think that structure has
been cooperating together, we've been enormously successful in the last
decade, which has allowed us to do far more in the world agenda. Think
of Kosovo on the political side, think of the WTO, the passing of the
Uruguay Round and the subsequent agreements on the economic side. 
DAVID
AARON: Well, I think that's part of it. But I think it's also important
to recognize that we have more disputes this year than we had last year,
and we have more disputes last year than the year before. There are
some 36 economic disputes. Yes, we worked together in Kosovo, but one
of the outcomes was European resentment and the desire now to build
their own rapid reaction military force because they felt so left out.
I think we do have to recognize the fact that Europe is not yet a country.
And so when we come to some of these issues, we don't have an FDA that
we can talk to. We don't have an SEC that we can talk to. We don't have
an FCC. In other words, we have some institutional problems, and the
decision-making in Europe is enormously complex. We have a parliament,
we have the member states, we have a commission. And they're all difficult
independent, almost independent centers of power.
STEPHAN
RICHTER: And what's getting lost in all that is somebody recently did
a calculation, all these problems that we have, all these trade disputes,
what do they amount to -- 0.5 percent of the entire trade relationship
of the value of everything that flows back and forth. We have a situation
where millions of Americans all of a sudden can travel to Europe because
the dollar is so strong and everybody wants to see Italy before it burns
or whatever. And at the same time, it is wonderful to see that everybody
can get into it, but the newspapers have a terrible problem. They only
report on the trade disputes, because newspapers never focus on the
good news story. And that's the tragedy of the transatlantic relationship
and why we have to deal with some of the questions here today.