As prepared for delivery...

Remarks by Ambassador Michael Klosson

October 21, 2003

     I want to congratulate the Cyprus American Business Association (CyABA) on hosting what I understand was a very productive ECACC meeting.  As Cyprus completes the final stages of its accession to the European Union, I think it timely for CyABA to reach out in this manner to its partner chambers in Europe.  American Chambers of Commerce in Europe, like CyABA, play a critical role in reinforcing business and commercial ties between the U.S. and the European Union.

     As the U.S. Ambassador in Nicosia, I normally would talk about the flourishing business relationship between the United States and Cyprus, including a very favorable balance of trade, American interest in government tenders worth over $1 billion and our desire to expand economic interaction even further.   Today, however, I want to make a few observations about our broader economic relationship with Europe, now that Cyprus has become a player on the U.S.-EU agenda.  Judging from questions I encounter in my meetings here and reports I read in the media, an impression has taken hold -- mistaken, I would say -- that America and Europe are at loggerheads, that one cannot be both a good European and trans-Atlanticist. 

     That’s not how I see things.  On the contrary, by joining the EU, Cyprus has become more important to and a better partner for both Europe and America.  Cyprus' membership in the EU will open new opportunities for expanding a rich, complex economic relationship between the U.S. and the EU.  

     No other relationship is more important to us than our relationship with Europe.

Statistics tell part of the story:  our relationship makes up over half of the global economy and comprises $2 trillion a year in trade and investment.  That amounts to millions of jobs on both sides of the Atlantic.  We are each other’s largest foreign investor:  the EU provides 65% of U.S. foreign investment, while the United States provides 45% of European foreign investment.  With so much involvement in each other's economy, our fates are inextricably intertwined and interdependent.  Cooperation between Europe and the United States is thus indispensable for both our prosperity and for the world’s as a whole. 

     To be sure, when relations are so intertwined, there are bound to be controversies.  Steel, biotechnology, farm subsidies, competition policy are just some of the issues that grab the headlines in the economic sphere. 

     For practitioners like myself, it is the reality beneath the headlines which counts, and that is quite different: there are many more areas where the U.S. and EU agree than disagree.  And where we do disagree, it is healthy, and not a sign of a long-term rupture in transatlantic relations.

     Conventional wisdom says that economic and trade relations between the U.S. and Europe are naturally competitive, if not conflictual.  Like much conventional wisdom, that view contains an element of truth but also is misleading.

     In fact, most of our economic relationship is conflict free.  Look at it this way:  Our two-way trade runs about $500 billion per year.  Only a small percentage is subject to dispute.  The overall $2 trillion business relationship grows steadily and is usually quite balanced, affected mostly by business cycle trends on both sides of the Atlantic.  Our capital markets are closely linked and increasingly integrated.  European companies own firms we consider American icons such as Chrysler, Shell, and Brooks Brothers; American firms own European companies such as Jaguar, Saab and Volvo.

     Our common trade interests manifest themselves in trade-liberalizing initiatives from the private sectors on both sides of the Atlantic.  My favorite example is the Information Technology Agreement.  This was a 1995 joint initiative of private U.S. and European IT industry, which asked governments to remove obstacles to trade in this sector.  The result:  nearly 30 governments joined together to eliminate duties on IT and networking equipment.  The laptop in your bag is probably more affordable as a result.

     The U.S. and the EU also collaborated closely two years ago to launch the Doha Development Agenda, the important multilateral trade negotiating process underway in the WTO.  This past September we worked together to concert our positions in the run-up to the Cancun Ministerial.

     Across the Atlantic, there are many ways we collaborate to make it easier for business to trade and invest.  There is a special emphasis these days on regulatory issues.  With the reduction of tariffs and quotas, regulatory differences have now emerged as a major obstacle to transatlantic trade.

     I won't kid you; this is hard.  Regulatory agencies have their own statutory responsibilities, and they rarely have a budget for coordinating with counterpart agencies abroad.

     So, let me sum up.  As a colleague of mine has said, "What divides us makes headlines, what unites us makes progress."  The U.S.-EU economic relationship is characterized more by partnership than disagreement.  And, where we have disputes, we search for ways to resolve them to our mutual benefit.

     Within this context, we look to Cyprus, as well as to the other new EU member states, to help us work together with an enlarged new EU.  For fifty years, the United States has supported European unity as the best path to peace and prosperity in Europe.  Meeting the challenges of this century rests to a large degree o a broad, strong and lasting partnership between the U.S. and Europe.   Advancing that partnership -- a key mission of my Embassy -- entails both opportunities and responsibilities for the U.S., for Cyprus as well as for all of Europe.  We welcome the role ECACC can play in that important work.