Wednesday, February 11, 2004

EU’s global duty

The European Union is failing in its potential to promote worldwide trade and prosperity and to become a partner with the United States in global leadership, Sweden’s trade minister said.

Leif Pagrotsky, discussing the impending expansion of the European Union, told a Washington audience this week that the 15-member bloc “must now more than ever step up to its global responsibilities.”

However, he said internal squabbles and special interests often prevent the European Union from “realizing its full potential.”

The organization is preparing to include 10 new members on May 1 that will boost the common market to 500 million Europeans, account for 22 percent of world trade and provide “almost half of the world’s development assistance,” he said.

“Yet, European policies sometimes seem strikingly at odds with these positive developments,” he told the Center for Transatlantic Relations at Johns Hopkins University.

“One problem is lack of coherence. Another is special interests. Narrow interests are often allowed to determine policies to the effect that agreed long-term overall objectives are overruled.

“The persistence of export subsidies and high tariffs in agriculture is perhaps the most provocative illustration of both these problems. To me, these examples signal an unsatisfactory commitment to an ambitious future.”

Mr. Pagrotsky, the minister for industry and trade, said his vision is for the European Union to correct its shortcomings and reach out to the borders of its trade bloc.

He said EU relations with the United States must be cooperative because the success of both economies are in each other’s interests.

“The EU and the U.S. should build on existing partnerships to share the burdens of leadership,” he said, adding that “when the EU becomes a truly global partner, the relationship between the EU and the U.S. will gain a new momentum.”

Mr. Pagrotsky noted that the European Union is working to create a free-trade zone in the Mediterranean region that will include the countries in North Africa. The expanded European Union will border Russia, Ukraine, Belarus and Moldova on the east. Mr. Pagrotsky also can envision the eventual inclusion of Turkey, which would extend EU borders to Iran, Iraq and Syria. He foresees the European Union extending trading benefits to all of those areas.

“Europe would be on its way to creating one single market for nearly 1 billion people,” he said.

Israeli trade barriers

Israel routinely frustrates American companies trying to do business there, as it continues to accept billions of dollars in U.S. aid every year, the U.S. ambassador to Israel complained this week.

Israel has adopted trade rules that favor companies from the European Union and disqualifies “highly qualified” U.S. firms, Ambassador Daniel Kurtzer told the Israel-America Chamber of Commerce.

“They are often at a disadvantage to Israeli and European firms,” he said, according to a report from United Press International.

Mr. Kurtzer also noted that Israel’s imports from the United States dropped last year by nearly $6.7 billion from the $7.7 billion in American goods in 2000.

“Four billion in aid went from the U.S. to Israel. Billions in foreign investment went from the U.S. to Israel, and what happened next? Six billion of this money went to pay for Israel’s deficit with Europe,” Mr. Kurtzer said.

A really big embassy

The new U.S. Embassy in China will be 538,000 square feet, not 50,000, as reported in this column yesterday.

Embassy Row relied on an Agence France-Presse report that confused feet with meters. The Web site of the current embassy in Beijing lists the $275 million project at 50,000 square meters.

• Call Embassy Row at 202/636-3297, fax 202/832-7278 or e-mail

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