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History Table of Contents
1999 Winter Conference
 
Winter Conference 1999
The New Europe and the Atlantic Relationship
Growth, change and opportunities...a comprehensive evaluation

Ambassador Danielle Smedja, EU Ambassador to Canada

I am very grateful to the Couchiching Institute of Public Affairs in Toronto for the invitation they have extended to me. It is indeed a pleasure and an honour to be present with you today. I would however have been more comfortable in my address if your Institute could have provided me with a crystal ball. Looking at the next 50 years in the North America/Europe relationship is not a small task, to say the least.

Joking apart, I would like to thank the organisers for the way they have organised the discussions today. By choosing to look at "the New Europe at a Crossroads" and "the New Euro Currency: Implications for Canada and the US", they have already indicated the direction of Transatlantic relations in the years ahead: they will be tremendously influenced by the European integration process.

I would like, therefore, to concentrate my presentation on the two following aspects:

First: in the coming years, the nature of the Transatlantic link will be increasingly determined by future developments in the European integration process. In other words, as the experience of the past decade tells us, the deepening of the European Union will give us a chance to strengthen Transatlantic relations for our mutual benefit.

Second: the globalization of the world and its increasing range of transnational challenges calls for partnership in leadership across the Atlantic. Also, the specificity of both EU-US and EU-Canada relations have to be nurtured in parallel.

Developments in the European Integration Process

Indeed, as Ambassador Poehlmann pointed out, the fall of the Berlin Wall has created a totally new situation in Europe. Such a dramatic development has created an historic opportunity for the European integration process. Although such a process is necessarily complicated and slow, too slow according to many, Europe has achieved remarkable progress over the past decade. Let me just mention one example: the Maastricht Treaty in 1992 has indeed been a very important milestone. What had been known since 1957 as the European Communities then became a European Union, with newly shared competences and enhanced coordination in a series of very important fields. Two new "pillars" were instituted by Maastricht: Common Foreign and Security Policy (CFSP), and Justice and Home Affairs. Both are very much still in the making of course, but the level of ambition has been clearly stated. As you know, Maastricht also set the clock ticking for the creation of the Euro, with the effects that we are starting to witness now, not only in Europe, but also here, in North America.

And those developments within Europe were immediately translated into the Transatlantic relationship: in 1990, two parallel Transatlantic Declarations were signed by the EU with Canada and the USA.

These Declarations were not based solely on a common heritage and shared values but also on the recognition by our North American partners of the Union's growing weight in world affairs. Co-operation now takes place in a wide range of areas from foreign and security policy, economics and trade, science and culture to fight against terrorism and illegal drugs. The most visible result of these Declarations, which commit the parties "to inform and consult each other on matters of common political and economic interest" was to initiate a series of regular summit meetings at Heads of State or Government level which are now a major feature of the international agenda.

A further strengthening of Transatlantic relations took place even more recently. In 1995, the so-called EU-US New Transatlantic Agenda was designed to increase co-operation over a wide range of areas. Again, a parallel development occurred between the EU and Canada, which signed a Joint Action Plan in 1996. In both instances, shared goals were identified including promoting peace, stability and democracy around the world ; responding to global challenges ; closer economic relations and contributing to the expansion of world trade ; and building bridges (people to people contacts) across the Atlantic.

Such an ambitious joint commitment was only made possible after the entry into force of the Maastricht Treaty which gives competence to the European Union for tackling new issues such as, for example, combating international organised crime, drug trafficking and the misuse of the information highway.

In future this will prove to be even more the case. Two examples to illustrate:

Firstly with the entry into force of the Amsterdam Treaty, on matters pertaining to the common foreign and security policy (CFSP), the High Representative of the EU and the President of the European Commission will be more and more the voices of our Member States. The EU will be more and more an emerging power, already very strong in economic and trade policy, and gradually taking significant steps to match this in foreign, diplomatic and security policy.

Secondly, by the mere fact of its enlargement to Eastern and Central European countries, the European Union will grow in geographic size, in population, in importance both economic and political.

Of course these developments represent more challenges than given facts. Will the European Union be able to deepen further its integration or will it evolve towards a dilution of its supranational powers? Will the US see the EU as an equal partner or as a rival to American power and influence? What will be the role of Canada in the North America/Europe relationship? Again, I have no crystal ball but I can offer my best guess in a candid way.

I believe the European Union is deeply committed to further its integration even though it is going to be faced with difficult issues such as security and defence issues or fiscal and social policies. But if we managed to have a single currency, there is no reason to have doubts on our capacity to make progress towards political integration. Similarly, our Member States more and more acknowledge the need for coordinated approaches when it comes to economic and social policies and the advent of the Euro will make this a more pressing necessity.

As for the US and Canada, I sincerely hope that they will see the benefits of the EU as an emerging power. The international scene whether from a political or economical point of view cannot and should not be dominated by one power, be it the US.

Globalisation Calls for Partnership in Leadership

This leads me to my second point concerning the new challenges of globalization. The world economy faces acute difficulties: it will take time before Asia recovers from financial and economic problems, let alone before the region can be again expected to play a role as a motor for world growth as we thought it could; more will be needed in Japan including structural reforms to create longer term economic dynamism; how will China respond to the challenges of restoring its rapid growth rate and of facing increasing competitive pressures in the region? The economies in Latin America are under pressure; Russia is facing a political, economic and financial crisis.

All this means that the EU and US are the two motors of the world economy. The US has yet again recorded remarkable growth figures in recent days. Europe's performance in recent years has been less spectacular than that of the US. But the economy is fundamentally sound. We expect growth of 2.4% in 1999 and 2.8% in 2000. We have just achieved the successful launch of the Euro, which has already had a significant international impact in financial and political terms; and has been a notable success in the bond markets. In the medium term, the Euro will further increase our economic strength. It will make it cheaper to do business in the EU and it will make us more competitive. We will have a single currency to match our economic weight. This should be seen as good for North America as well as the EU.

Yet, for all the problems and trade irritants, the inescapable truth is that the Transatlantic link is the key economic partnership for all of us, Europeans, Americans and Canadians alike and the main engine of sustainable world economic growth. We have the world's biggest trading relationship and the biggest investment relationship. We all benefit from our trade relations, and our economies are truly interdependent.

Therefore it is vital that the EU and the US maintain this growth in both our economies. That means trying to work together for our own interests, by promoting trade and investments and in helping others to recover.

The beginning of the next Millenium should be the occasion for the North America/Europe partnership to send important messages:

  • we must support the continuing openness of markets and fight against resort to protectionism in times of crisis. We all know that protectionism only has short term, illusory benefits and can damage our long term interest;
     
  • we must advocate for continued, courageous economic and financial reforms in Asia, Latin America and elsewhere, arguing for greater transparency, regulation and supervision in the emerging economies, notably in the financial sector;
     
  • we should strongly defend the multilateral trading system, in particular the WTO with its rules and procedures;
     
  • we should make sure that the new trade round includes not only further tariff reduction and negotiations in sectors like agriculture and services, but also the promotion of international rules in a number of areas such as investment and competition, trade and labour, the impact on the environment and the role of developing countries;
     
  • we should also provide a responsible leadership in promoting international rules and principles concerning the protection of the environment given its transboundary nature.

This is a very important and challenging common agenda for the EU and the US. I know for sure that this is what the European Union will be looking for. I am less sure that this will be the case of the US, given in particular the vital role that Congress has to play. Therefore, due to its unique position between its two main Transatlantic partners, Canada can play a very important role in building bridges across the Atlantic.

Conclusion

My belief is that there is a fundamental economic and political partnership of values across the Atlantic, which operates at many levels, through contacts between individuals, educational exchange, business contacts, between national governments in many areas of policy, in military exchanges including the military alliance, etc. This is true in EU-US relations as well as between the EU and Canada. This partnership is often shrouded in short term rivalry, competition or outright disagreement. There are significant distinctions between our social and political systems, and our economic attitudes, reflecting our different histories and traditions. But while we are not identical by any means, we nevertheless have deep links.

We have therefore to acknowledge that while being more and more equal partners, the EU and the US are also more and more competitors in the economic arena but also will be on the political stage in the years ahead.

The challenge for all of us is to adapt, as we evolve, so that our energies are put to constructive and productive uses. Our Transatlantic links are bound to develop even further as we have to share increasingly important responsibilities on the world stage. At the threshold of the new Millenium, it is important to get the EU-US relationship right and that Canada takes its share in the North America/Europe relationship. Building a consensus in favour of an effective system, which serves the interests of major economies and major international businesses but also protects and benefits individual citizens and the weaker economies in the developing countries, is probably the key economic challenge before us.

Thank you for your attention.