Creating a Transatlantic Market

Dario Zuddu

and Jay T. Chittooran

The fate of the transatlantic relationship is the paramount challenge facing the European Unionand the United States. While both governments have self-interest, they both have a globalresponsibility to work together in this time of economic ambiguity. Each country must respondto this economic crisis and develop strategies that guarantee sustainable prosperity in the future,while also rendering future collapses improbable.This requires a shared transatlantic approach that is supportive of mutual interests and seeks toenhance the current economic governance structure to allow power to be diffused to all playersin the system more effectively, fairly, and logically.The global economy needs to be properly managed. Prudent standards in the financial markets,consumer protection and safety measures in trade in goods, and standardized procedures foroversight and control need to be mutually recognized by the members of the world economy.Transatlantic economic cooperation should be enhanced. Creating a stronger and better

integrated transatlantic markets can be traced from the idea that "a „laissez

-faire approach' to theworld's single most important economic relationship is neither sustainable nor defensible." Whiletransatlantic trade would encourage growth, the efforts should go beyond trade liberalization andthe settlement of trade disputes.While previous efforts have produced little of a tangible nature and lacked actual binding andformal commitments, the "Framework for Advancing Transatlantic Economic Integrationbetween the USA and the EU" was a strong move in promoting closer EU-US cooperation; thatis, this agreement actually had the potential to produce significant change in transatlanticrelations. By agreeing to this, the European Commission President Jose Manuel Barroso,German Chancellor Angela Merkel, and President George W. Bush took an encouraging step.Not only did this framework provide greater cooperation and integration among the transatlanticmarkets, it also established the Transatlantic Economic Council, which is aimed at increasingharmonization through reduced regulations. This framework brings together the leaders fromboth sides of the Atlantic who hold the political power to bring about closer economic ties.Previous EU-US summits have worked on a variety of topics, including automobile safety,climate change, and agriculture. In the coming months, discussions will be focused on topicsrelated to financial regulation, technology, and development (Doha).The currency crises of the 1990s and the current economic and financial collapse have depictedthe fragility of the current system. With a need to reinforce and stabilize the transatlanticeconomy, the work of the TEC and other related organizations, all created under the auspices of the EU-US agreement, will alleviate problems that currently face not only the transatlanticcountries, but also the global community.

Research Fellow, The Streit Council, 2005

Research Fellow, The Streit Council, 2009

Based on this reality, making economic cooperation and a common international economicpolicy the anchor for closer transatlantic relations is not only feasible, but is also completelynecessary. That is why integration, in this context, is starting with harmonization of technicalstandards and regulations along sectoral lines, as delineated in the 2007 Framework (and othersimilar documents).Many experts in this field believe that by 2025, countries, namely Brazil, China, and India, willgain economic strength as a direct result of increased development, capital stocks, and resources.Because of this, these countries will demand larger influence in the multilateral institutions. Thetransatlantic actors, EU and US included, must adjust to facilitate the integration of developingcountries into the global economic system.Joseph Quinlan, Tr

ansatlantic Fellow at the German Marshall Fund, recommends that the “EU

and the US identify mutual interests with developing countries and step up cooperation, citingclimate change, energy security and aging populations as possible areas where jointefforts would be

beneficial to all parties.”

While critics have argued that increased collaboration will generate wanton bureaucracy, thestructure of the transatlantic economic agreement will be more strategically focused and gearedtowards specific goals and economic gains. Many actors, from national to state governments,multinational to non-profit organizations, and the public on both sides of the Atlantic, areintrinsically intertwined in the plan for a Transatlantic Market by 2025.The possible creation of a Transatlantic Free Trade Area (TAFTA) has also received muchattention, but it remains to be seen whether this idea will come to fruition. Critics of this planinsist that a completely barrier-free market would result in tenuous relationship that would notallay any fragility or volatility concerns.Either way, these changes have provided a very promising springboard for the expansion of transatlantic cooperation in other areas. Continued work and improvement are necessary if transatlantic economic cooperation is to be expanded.