HISTORIC PRESS RELEASE : Brown – Outwood-looking EU stands to gain €100 billion through transatlantic trade liberalisation [May 2003]

The press release issued by HM Treasury on 29 May 2003.

Britain, Europe and the US stand to gain substantially from transatlantic trade liberalisation, two studies published today show. The studies, commissioned jointly with the Dutch Ministry of Finance, suggest that the EU could gain over €100 billion per annum through liberalisation of the EU-US trade relationship. The gains for the US could be as much as $75 billion per year.

The studies also highlight the new challenges to transatlantic trade – in particular, arguing that the EU and US should consider strengthening regulatory dialogue and cooperation, to help prevent  ‘non-tariff’ barriers, such as domestic regulation, becoming an increasing source of trade disputes.

Commenting on the studies Chancellor Gordon Brown said:

“The new debate about Europe’s future is no longer – as it was in the 1980s – how a single trade bloc organises its internal markets, independent of the rest of the world, but how all of Europe, thinking globally, can be outward looking, meet global competition and reform to do so – and thus benefit from global change.

“In the last ten years, Europe’s trade with the rest of the world has increased faster than output. During that time European investment in America has increased 10-fold to around $250 billion. In recent years, more European capital has been invested annually in America than US capital in Europe.”
“The transatlantic economic relationship accounts for up to $2.5 trillion of commercial transactions each year, including $500 billions of foreign trade, and provides employment to over 12 million people.   We should not allow trade disputes to continue interfering with such vital parts of our economies.”

“Instead, Europe and America should patch up their trade differences, move beyond the day-to-day issues and make a greater effort to tackle the barriers to a fully open trading and investment relationship, strengthen joint arrangements to tackle competition issues and engage in dialogue about the approach to financial services regulation.”

“As a first step I believe the US administration and the EU Commission should work with the UK and other Member States to produce a detailed analysis of the benefits of greater trade and investment liberalisation.”

“But the scope for bilateral cooperation should be additional to, not a substitute for, multilateralism. I welcome the progress made by Commissioner Lamy.  Europe and the US must demonstrate the political will to make urgent progress in the Doha trade discussions.  In response to the challenges of globalisation, we must lead in the World Trade Organisation. A joint commitment to ensure the success of the multilateral trade agenda should be an integral element of progressively greater economic cooperation between the EU and the US.

“I call on the US administration, the European Commission and Greece, as holders of the EU Presidency, to use this summer’s EU-US summit to make a significant commitment to the success of this year’s WTO meeting in Cancun.

“The prize of being partners rather than fortress Europe versus fortress NAFTA is that each of us stand to gain much more from globalisation.

“The US-EU studies we are publishing today show it is not a choice between Europe and America, rather each needs the other for economic prosperity, and Britain will continue to work with others as leaders in Europe in securing the full benefits of globalisation. The more Europe and America work closely together the better it is for Britain, Europe and the world.“

Based on the recommendations of these studies, the UK believes that:

• There should be detailed analysis of the potential gains from liberalisation to provide a framework for bilateral efforts, identifying existing barriers to trade, and areas for priority action;
• There should be improved regulatory dialogue between the EU and US authorities on financial services to catch early those regulatory issues affecting each other’s jurisdictions;
• The EU and US should renew their commitment to the Transatlantic Business Dialogue –  to help move forward with liberalisation;
• There should be renewed commitment to the WTO multilateral trade agenda.

The EU-US bilateral summit in June provides an opportunity for Europe and the US to take these ideas forward.