In a speech yesterday at Washington’s Georgetown University, former Spanish PM Jose Maria Aznar proposed what he termed an Atlantic area of prosperity:
Aznar said that such market liberalization would permit per capita income in the EU and US by 3.5%, citing an OECD report, and would allow other countries to increase their GDP by at least 1.5%………
Aznar said in his speech that the difference in productivity between the EU and the US can be reduced if trans-Atlantic barriers are eliminated. “A trans-Atlantic bridge for productivity is much more attractive than theories of counterbalance or confrontation between Europe and the United States,” he said. Aznar predicted that the EU would be the greatest beneficiary of such an alliance, as there are 20 million unemployed in the Union.
El Pais has video of the speech online at its high speed webpage.
Aznar’s spech was based on a report issued by his foundation, the FAES (Foundation for Analysis and Social Studies.) The thrust of the proposal is the elimination of tarriffs and “non traditional trade barriers” between the EU and US, with this being open to other countries as well. The sections dealing with the removal of tarriffs and other tradional trade barriers is standard free trade boilerplate, but the section dealing with “non traditional trade barriers” is far more interesing:
Given that the core of the transatlantic economy is based on investment, the Transatlantic Economic Area aims to eliminate obstacles to mutual direct foreign investment and facilitate the activity of multinational companies on both sides of the Atlantic, as well as removing barriers regarding the provision of services and multiplying job opportunities both in the United States and in Europe.
Technical and regulatory barriers constitute the main obstacles when it comes to extending and intensifying economic relations between the two sides of the Atlantic.
The Transatlantic Economic Area seeks to completely eliminate barriers imposed through the regulation of certain services, such as those based on professional qualifications within regulated sectors. The mutual recognition of professional qualifications would represent a very significant step forward towards achieving this goal.
Furthermore, among the matters that are currently on the Doha Round agenda, certain fields present opportunities for substantial progress to be made.
Among these, we might highlight the elimination of technical barriers that derive from the existence of different standards. Standards relating to mobile telephone technology, electrical energy, TV tuning equipment and other electronic devices, not to mention vehicle emissions or clothing sizes, are just a few examples. The establishment of joint standards, or the mutual recognition of standards and promotion of their compatibility through the necessary “interfaces”, would not only boost trade, but also facilitate the use of these products throughout the rest of the world, featuring obvious economies of scale and distribution.
Legal barriers are also important. There is a considerable way to go with regard to the mutual recognition of judicial verdicts and decisions issued by competition regulators and authorities, a goal that the Transatlantic Economic Area aims to achieve.
These same bodies that are set up to regulate and safeguard competition can sometimes constitute powerful barriers when it comes to attracting foreign investment. The Transatlantic Economic Area aims to eliminate those mechanisms that are often used as hidden protectionist barriers.
“The establishment of joint standards, or the mutual recognition of standards and promotion of their compatibility through the necessary “interfaces” (relating to mobile phone technology, electrical energy, TV tuning equipment and other electronic devices, etc.), would not only boost trade, but also facilitate the use of these products throughout the rest of the world, featuring obvious economies of scale and distribution”
It is also possible to move forward by establishing shared minimum accounting rules, whilst the application of international accounting rules will enable us to observe the progress that is made in the future.
Something similar could be carried out within the field of financial supervision and rules relating to the “good management” of companies. The Transatlantic Economic Area would consider the possible creation of mutual exchange rate coordination or intervention agreements or agreements relating to other monetary policy instruments to be counterproductive. Neither would it be advisable to establish mutual agreements for fiscal coordination or standardization. All of these policies should continue to be applied independently on the two sides of the Atlantic by the respective authorities, because they encourage competition and place a limit on excessive public intervention.
I’m shocked that the only report of Aznar’s speech in English was done by the English section of a right wing Spanish website. Azanr is scheduled to have lunch in the White House with President Bush next Monday. Aznar was evasive when asked what he planned to talk to Bush about, although I fully expect that Aznar and his friends at the Heritage Foundation and the American Enteprise Institute will be pushing for Bush to put forward many of the same proposals as cab be found in the FAES report. If Aznar’s overtures in Washington gain any traction this could be a huge story.
