Monday, February 25, 2008
[IWS] CRS: EU - U.S. TRADE & INVESTMENT RELATIONS: KEY ISSUES [14 February 2008]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL34381
European UnionU.S. Trade and Investment Relations: Key Issues
February 14, 2008
Raymond J. Ahearn, Coordinator, Foreign Affairs, Defense, and Trade Division
John W. Fischer, Charles B. Goldfarb, and Charles E. Hanrahan, Resources, Science, and Industry Division
Walter W. Eubanks, Government and Finance Division
Janice E. Rubin, American Law Division
http://assets.opencrs.com/rpts/RL34381_20080214.pdf
[full-text, 39 pages]
Summary
The United States and EU share a huge, dynamic, and mutually beneficial
economic relationship. Not only are trade and investment ties between the two
partners huge in absolute terms, but the EU share of U.S. global trade and investment
flows has remained high and relatively constant over time, despite the rise of Asian
trade and investment flows. These robust commercial ties provide consumers on
both sides of the Atlantic with major benefits in terms of jobs and access to capital
and new technologies.
Agreements between the two partners in the past have been critical to making
the world trading system more open and efficient. At the same time, the commercial
relationship is subject to a number of trade disputes and disagreements that
potentially could have adverse political and economic repercussions.
Washington and Brussels currently are working to resolve a number of issues,
including a dispute between the aerospace manufacturers, Airbus and Boeing, and
conflicts over hormone-treated beef, bio-engineered food products, and protection of
geographical indicators. The Airbus-Boeing dispute involves allegations of unfair
subsidization while the other disputes are rooted in different U.S.-EU approaches to
regulation, as well as social preferences. Simultaneously, the two sides have
cooperated to liberalize the transatlantic air services market and are working on
harmonizing and/or liberalizing financial markets. Competition agencies in the U.S.
and EU are also moving towards substantial convergence in some areas of antitrust
enforcement. A new institutional structure, the Transatlantic Economic Council
(TEC), was established in 2007 to advance bilateral efforts to reduce regulatory and
other barriers to trade.
Congress has taken a strong interest in many of these issues. By both proposing
and passing legislation, Congress has supported the efforts of U.S. industrial and
agricultural interests to gain better access to EU markets. Congress has pressured the
executive branch to take a harder line against the EU in resolving some disputes, but
has also cooperated with the Administration in crafting compromise solutions.
Primarily through oversight in the second session of the 110th Congress, many
Members of Congress can be expected to support efforts to resolve existing disputes
and to maintain an equitable sharing of the costs and benefits of the commercial
relationship with the EU.
This report starts with background information and data on the commercial
relationship and then discusses selective issues associated with trade in agricultural
products, trade in services, and foreign direct investment. A concluding section
assesses prospects for future cooperation and conflict. The report will be updated as
events warrant.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Trade and Investment Ties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Regulatory Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trade in Manufactured Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Airbus-Boeing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trade in Agricultural and Primary Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Meat Hormones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Approvals of Genetically Modified Organisms (GMOs) . . . . . . . . . . . . . . . 14
Protection of Geographical Indications (GIs) . . . . . . . . . . . . . . . . . . . . . . . 16
Trade in Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Air Transport Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Financial Services Dialogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
U.S.-EU Accounting Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Antiterrorism Financing and Personal Financial Data Protection . . . . 20
Opening EU Markets to U.S. Financial Services Companies . . . . . . . 21
Other U.S.-EU Financial Services Issues . . . . . . . . . . . . . . . . . . . . . . . 22
Foreign Direct Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
U.S. and EU Perspectives on Antitrust and Competition . . . . . . . . . . . . . . 25
"Monopolization" in the United States . . . . . . . . . . . . . . . . . . . . . . . . 26
"Dominance" in the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Impact of different laws and philosophies . . . . . . . . . . . . . . . . . . . . . . 29
Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Forces for Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Integration of Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Institutional Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Shared Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Forces for Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Intractable Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
WTO Differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Rivalry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
List of Figures
Figure 1. World GDP in Trillions of U.S. Dollars, 2006 . . . . . . . . . . . . . . . . . . . 3
Figure 2. World Exports and Imports of Goods, 2006 . . . . . . . . . . . . . . . . . . . . . 4
List of Tables
Table 1. U.S. Current Account Balance with EU, 2006 . . . . . . . . . . . . . . . . . . . . 5
Table 2. U.S. Merchandise Trade Balance with the EU 27 . . . . . . . . . . . . . . . . . 5
Table 3: Top U.S.-EU Exports and Imports by 2-digit Commodity Classification, 2006 . . . . . . . . . .. . . . . . 9
Table 4: Foreign Direct Investment in the United States on a Historical Cost Basis, Percentage Share . . . . . . . 23
Table 5: U.S. Direct Investment Position Abroad on a Historical Cost Basis, Percentage Share . . . . . . . . . . . . . . . . . . 24
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL34381
European UnionU.S. Trade and Investment Relations: Key Issues
February 14, 2008
Raymond J. Ahearn, Coordinator, Foreign Affairs, Defense, and Trade Division
John W. Fischer, Charles B. Goldfarb, and Charles E. Hanrahan, Resources, Science, and Industry Division
Walter W. Eubanks, Government and Finance Division
Janice E. Rubin, American Law Division
http://assets.opencrs.com/rpts/RL34381_20080214.pdf
[full-text, 39 pages]
Summary
The United States and EU share a huge, dynamic, and mutually beneficial
economic relationship. Not only are trade and investment ties between the two
partners huge in absolute terms, but the EU share of U.S. global trade and investment
flows has remained high and relatively constant over time, despite the rise of Asian
trade and investment flows. These robust commercial ties provide consumers on
both sides of the Atlantic with major benefits in terms of jobs and access to capital
and new technologies.
Agreements between the two partners in the past have been critical to making
the world trading system more open and efficient. At the same time, the commercial
relationship is subject to a number of trade disputes and disagreements that
potentially could have adverse political and economic repercussions.
Washington and Brussels currently are working to resolve a number of issues,
including a dispute between the aerospace manufacturers, Airbus and Boeing, and
conflicts over hormone-treated beef, bio-engineered food products, and protection of
geographical indicators. The Airbus-Boeing dispute involves allegations of unfair
subsidization while the other disputes are rooted in different U.S.-EU approaches to
regulation, as well as social preferences. Simultaneously, the two sides have
cooperated to liberalize the transatlantic air services market and are working on
harmonizing and/or liberalizing financial markets. Competition agencies in the U.S.
and EU are also moving towards substantial convergence in some areas of antitrust
enforcement. A new institutional structure, the Transatlantic Economic Council
(TEC), was established in 2007 to advance bilateral efforts to reduce regulatory and
other barriers to trade.
Congress has taken a strong interest in many of these issues. By both proposing
and passing legislation, Congress has supported the efforts of U.S. industrial and
agricultural interests to gain better access to EU markets. Congress has pressured the
executive branch to take a harder line against the EU in resolving some disputes, but
has also cooperated with the Administration in crafting compromise solutions.
Primarily through oversight in the second session of the 110th Congress, many
Members of Congress can be expected to support efforts to resolve existing disputes
and to maintain an equitable sharing of the costs and benefits of the commercial
relationship with the EU.
This report starts with background information and data on the commercial
relationship and then discusses selective issues associated with trade in agricultural
products, trade in services, and foreign direct investment. A concluding section
assesses prospects for future cooperation and conflict. The report will be updated as
events warrant.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Trade and Investment Ties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Regulatory Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trade in Manufactured Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Airbus-Boeing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Trade in Agricultural and Primary Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Meat Hormones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Approvals of Genetically Modified Organisms (GMOs) . . . . . . . . . . . . . . . 14
Protection of Geographical Indications (GIs) . . . . . . . . . . . . . . . . . . . . . . . 16
Trade in Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Air Transport Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Financial Services Dialogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
U.S.-EU Accounting Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Antiterrorism Financing and Personal Financial Data Protection . . . . 20
Opening EU Markets to U.S. Financial Services Companies . . . . . . . 21
Other U.S.-EU Financial Services Issues . . . . . . . . . . . . . . . . . . . . . . . 22
Foreign Direct Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
U.S. and EU Perspectives on Antitrust and Competition . . . . . . . . . . . . . . 25
"Monopolization" in the United States . . . . . . . . . . . . . . . . . . . . . . . . 26
"Dominance" in the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Impact of different laws and philosophies . . . . . . . . . . . . . . . . . . . . . . 29
Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Forces for Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Integration of Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Institutional Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Shared Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Forces for Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Intractable Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
WTO Differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Rivalry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
List of Figures
Figure 1. World GDP in Trillions of U.S. Dollars, 2006 . . . . . . . . . . . . . . . . . . . 3
Figure 2. World Exports and Imports of Goods, 2006 . . . . . . . . . . . . . . . . . . . . . 4
List of Tables
Table 1. U.S. Current Account Balance with EU, 2006 . . . . . . . . . . . . . . . . . . . . 5
Table 2. U.S. Merchandise Trade Balance with the EU 27 . . . . . . . . . . . . . . . . . 5
Table 3: Top U.S.-EU Exports and Imports by 2-digit Commodity Classification, 2006 . . . . . . . . . .. . . . . . 9
Table 4: Foreign Direct Investment in the United States on a Historical Cost Basis, Percentage Share . . . . . . . 23
Table 5: U.S. Direct Investment Position Abroad on a Historical Cost Basis, Percentage Share . . . . . . . . . . . . . . . . . . 24
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 8:53 AM
