Transatlantic Trade Policy: US Market Opening Strategies. European Policy Paper #1

Devuyst, Youri (1995) Transatlantic Trade Policy: US Market Opening Strategies. European Policy Paper #1. [Policy Paper]

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Abstract

[Introduction.] Since the 1950s, the European Community (EC) has been trying to build up a new independent legal and economic order. This exercise has been difficult and gradual. Indeed, each step forward in the build-up of the community's legal and economic order requires a new compromise formula between the member states--for example, between the free traders and the economic interventionists; between the more service-oriented, the more industrial-oriented, and the more agricultural economies; and between the richer and the poorer regions. Obviously, the Community is not developing in a vacuum. Since the Community is a major player in international trade relations, its development has an effect, not only within the EC, but also on third countries. Naturally, since Community measures also affect third countries, those third countries, including the United States (US), have been trying to influence or even control the final shape of the EC's legal and economic order. As Jeffrey Garten, the US Under Secretary of Commerce for International Trade, has recently explained, the US is determined to try and shape its trading partners' economic system in view of the US market opening objective. According to Garten, Washington would use its power to try to pry open markets even if it meant challenging "the very industrial organization of countries"(cited in Friedman, 1995). As a result, tension has developed between, on the one hand, the EC's sovereign right to set up its own legal order and, on the other, the outside world's interest in monitoring and influencing the EC's development. This paper examines this tension as it arises in the relationship between the Community and the United States. More specifically, the paper deals with the institutional strategies (multilateral, bilateral, and unilateral) used by the United States to monitor the EC's development and to keep the Common Market open for US exports. The main question is how far each of the institutional strategies was able to help resolve, or better, help prevent, "market opening" conflicts between the US and the EC. At the end of the paper, the current US market opening options toward the EC will be analyzed, including the recent suggestion to create a Transatlantic Free Trade Area (TAFTA) similar to the North American Free Trade Agreement (NAFTA).

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