European Union-U.S. Relations by Thomas J. Donohue in Madrid, Spain

Madrid, Spain
November 5, 2003

Thank you very much. Good afternoon, ladies and gentlemen. It is a great pleasure to be in Madrid during my first visit to Spain.

Though my roots are Irish, like most Americans I feel a special connection with Spain — which has stood with us in the war on terrorism, and in the liberation and reconstruction of Iraq. Trust me when I tell you that this support has not gone unnoticed in the United States.

Spain's strong commitment to peace and stability in the Middle East, and its determination to help the world overcome the scourge of terrorism, was further demonstrated just two weeks ago when Madrid was host to the Donor's Conference on Iraq.

Despite some negative media reports, the Conference was a big success, lining up $33 billion dollars in commitments. (The last time I checked, $33 billion dollars was still a lot of money!)

The U.S. Chamber was proud to play a significant role in the Conference by helping to marshal support from the American business community. General Dan Christman, who runs our international programs, led our delegation at the Conference and he is here with us today. (Introduce Dan)

One of the driving forces behind the Donor's Conference was a man you know very well – Ambassador George Argyros. The relationship between Spain and the United States could not be in better hands – and Mr. Ambassador, I'd like to express the appreciation of the American business community for your outstanding leadership.

Jaime Malet has done a great job in revitalizing the American Chamber of Commerce in Spain. I happen to know something about the challenges he and his team have faced, since the U.S. Chamber was also in some disrepair when I returned as its President in 1997. Jaime, I want to thank you for all you and the Amcham have done to help put together such an excellent program for us.

And let me also thank Mr. Jose Maria Cuevas, Chairman of the Spanish Federation of Employers, and all of his members who are here today and who have been very gracious with their time and assistance.

The EU and the Transatlantic Economy

We meet at a pivotal moment for Europe, for the transatlantic economy, and for the bilateral relationship between Spain and the United States.

The European Union is on the eve of a profound transformation – changing its form of governance and enlarging its membership. This cannot help but have an impact on the $1 billion-a-day transatlantic economy, and on our relationship with Europe.

As Europe approaches the finish line on constitutional reform and enlargement, we are here to remind our European partners that everything they do will impact American and global business. We are part of the largest integrated market in the world, the transatlantic market.

The U.S. and the EU account for nearly 40% of world trade. Some $3 trillion dollars of trade and investment flows between us every year, and most of it without barriers or disputes.

European policy-makers should think strategically about Europe's institutional reform with the goal of generating economic growth. You might have heard the recent rumors that the American economy has finally begun to grow at a significant pace. I'm pleased to tell you that those rumors are . But the U.S. cannot continue to remain the sole engine of growth. Europe has to do its part.

It's time to look upon the US-European commercial partnership as ONE highly integrated marketplace. Millions of workers on both sides of the Atlantic owe their jobs to affiliates of U.S. and EU companies.

Back in Washington, the U.S. Chamber has worked on behalf of this partnership again and again – and we are proud to count a number of European companies as members.

We have advocated equal treatment under U.S. law for European firms. We have successfully opposed different dividend tax rates for European-owned companies, as well as discrimination in procurement and merger & acquisition reviews.

At the same time, we worked with U.S. regulators to obtain flexibility for European companies attempting to meet the provisions of the Sarbanes-Oxley corporate governance legislation.

While educating our own policymakers about the fundamental importance of the transatlantic relationship, we are asking European business leaders to do the same within their Member States and especially with the EU.

The major problems for U.S. companies are not found at the borders. They are not related to tariffs and quotas, which play a relatively minor role in our commercial relationship. It is domestic regulations and public policies which concern us most of all.

Policies like the proposed Chemicals Directive, rigid and restrictive labor laws, certain environmental rules, restrictions on GMO-foods, and high rates of taxation and public sector spending have a depressing impact on growth, entrepreneurship and job creation.

We understand that Brussels institutions will undergo a profound change and, a year from now, the checks-and-balances there will look different. But we cannot afford to wait. That's why we are now engaging with every strong business community in Europe. It is why we have come to Madrid.

It is time for a longer-term, broader vision for the transatlantic economy. The overarching goal should be a barrier-free economic relationship between the U.S. and the EU.

While we both remain totally committed to putting global trade talks back on track after Cancun, let's also advance a U.S.-EU investment and regulatory cooperation agreement. On the trade side, tariffs are already generally low, averaging around 3—4%. Our primary focus should be on eliminating regulatory and investment barriers.

Economists estimate that dismantling remaining barriers could add about one percent to European GDP and a half of one percent to US GDP. Accrued over a long period of time – that's a lot of money!

So I am here in Spain to propose that the business communities of both our countries provide leadership in this effort. Let's work together to convince the policymakers in Brussels and the politicians of the EU to remove the impediments to growth and to spur the creation of jobs through laws and regulations that are based proven science and common sense.

And let's work together in Washington to reform America's out-of-control legal system that is sucking the vitality out of domestic and foreign companies alike.

Remember, in many ways we are one business community in one integrated market – and we should join forces to protect and advance our mutual prosperity. The U.S. Chamber is ready to use its all the influence at its disposal to strengthen and expand the transatlantic partnership – which is absolutely critical to prosperity and progress throughout the world.

Let me conclude where I began – with a few words about Spain. Ambassador Argyros has told me this and now, even though I have been here just a short time, I have seen it for myself. Spain is a leader in Europe. Economic growth here is setting the pace for the continent.

The openness of the economy, the sophistication of the companies, and the great improvements to the infrastructure have made this country a model for Europe and beyond. That's why more than 500 U.S. firms have come to Spain and I predict more are on the way.

And with Spain becoming a major player in the global investment scene — especially in Latin America — Spanish and American companies will find even more opportunities to partner and to grow together.

Our countries enjoy one of the most trusted and fruitful bilateral relationships anywhere in the world. Whether we are in business or government, let's all work together to put these strong ties to noble use – to continue to fight terrorism, to rebuild Iraq, to spur economic growth throughout Europe and across the Atlantic, and to provide the leadership the global community so urgently needs if it is to live in peace and in plenty.

Thank you very much.