NIXON CENTER PERSPECTIVES
Volume 3, Number 6
Issues in U.S.-European Relations
An Address by Under Secretary of State Stuart E. Eizenstat
October 16, 1998
(Mr. Eizenstat is Under Secretary of State for Economic, Business, and Agricultural Affairs)
Introduction
Thank you very much. It is a pleasure to join you here today. I would like to take the opportunity of our gathering to talk briefly about the U.S.-EU relationship, some of its synergies, some of its frictions, and some of its prospects.
Importance of U.S.-EU Partnership
Although the Cold War is over, the need for a partnership and alliance with Europe is not. Today, as 50 years ago, our destinies are connected. If Europe is at peace, America is more secure. If Europe prospers, America does likewise. In many ways, Europe is the best partner we have. Perhaps more than with any other part of the world, our relationship with Europe is what one might call an "enabling relationship." That is, when the U.S. and Europe are together, it enables us to be a powerful force for progress on almost any issue.
The U.S. and EU have already established the world's largest two-way trade and investment relationship -- accounting for more than $1 trillion -- and there are many other ways in which our cooperation has been fruitful:
- We would not have achieved major multilateral trade agreements on telecommunications and information technology, worth hundreds of billions of dollars, without U.S.-EU leadership. Working together with Canada and Japan, the U.S. and EU provided the critical mass necessary to reach these important agreements.
- The U.S.-EU Mutual Recognition Agreement signed earlier this year will eliminate duplicative product testing on some $60 billion worth of traded goods.
- EU resources have made some of our most important foreign policy initiatives possible. The EU's $1.9 billion aid package to the Middle East is fundamental to the peace process, and its $1.7 billion in assistance to Eastern Europe -- including Bosnia -- is much larger than our own aid effort.
- Our broad and ongoing political dialogue with the EU has helped us forge common, constructive positions on various issues in Africa, the Balkans, Slovakia, Ukraine, and elsewhere.
- The U.S. and EU share the nuclear safety policy goal of closing the Chernobyl nuclear power complex in Ukraine permanently by 2000; and we are working together on shutdown issues.
- The U.S. and EU are establishing a network of regional environmental centers in Ukraine, Russia, and elsewhere in the NIS.
- Our ability to work through our differences and focus on common goals was a critical factor in reaching agreement on the Kyoto Protocol on climate change.
- The EU's contribution to the Korean Energy Development Organization has been key in enabling the Organization to address the threat of nuclear proliferation and promote regional stability on the Korean peninsula.
- Our cooperation was an important part of the successful conclusion of the UN International Convention on the Suppression of Terrorist Bombings.
The list goes on and on.
Indeed, the history of the 20th century has taught both sides of the Atlantic that we need a partnership in which Europe can count on us and we can count on Europe. That is a lesson that applies to the 21st century as well.
Three Challenges
As we move into the new millennium, we see three basic challenges to pushing the Euro-Atlantic partnership forward.
The first lies within Europe itself. Specifically, we encourage the continued integration of the continent through the enlargement of both NATO and the European Union. This process fosters a prosperous and democratic continent that is united not by force of arms but by the possibilities of peace. We must also extend our goals of security, prosperity, and democracy eastward by continuing to forge new partnerships with Russia and Ukraine. In doing so, we aim to make war and conflict in the eastern half of the continent as inconceivable as it has become in the western half. We believe European Economic and Monetary Union (EMU) has the potential to contribute greatly to European integration by fostering a more stable financial sector and more open markets, particularly if EMU is accompanied by structural reforms that are so critical to reducing unemployment.
Our second challenge is to deepen the bonds between Europe and America. Our extensive trade and investment relationship is the source of prosperity for countless millions of people on both sides of the Atlantic. It provides twin pillars of growth and stability that are especially important in this uncertain time for the global economy. From the Kennedy Round to the Uruguay Round, the US and EU have led the world toward open markets -- and the wealth creation such liberalization brings. The Transatlantic Economic Partnership (TEP), the new U.S.-EU joint initiative, seeks to strengthen the already impressive foundations of our transatlantic relationship through cooperation in further reducing bilateral and multilateral barriers to international trade and investment. The TEP will cover more than a dozen sectors, including cutting-edge areas important to the U.S., such as services, biotechnology, and electronic commerce. We see TEP cooperation as only enhancing our ability to be a positive force for change and economic growth throughout the world, and we hope the European Commission receives a negotiating mandate for TEP by the next U.S.-EU Summit.
The third and most significant challenge extends beyond Europe and America. We must act together to deal with traditional regional crises and to develop common strategies against new types of threats to our peoples. Often these threats involve illegal flows across national borders of people, money, weapons, technology, toxins, terror, drugs, or disease that neither of us can confront effectively alone.
Key Source of U.S.-EU Friction . . .
It is these third-region, or out-of-area, issues that have most tested transatlantic relations in recent years. Although our experience has shown that where we have acted in concert, we have managed to deal with problems more cheaply, quickly, and effectively, this cooperation has not always been possible. There are a variety of explanations for this. The perspectives of a global superpower and individual EU member states differ. The pace at which the U.S. responds to events, and the operations of a new and developing Common Foreign and Security Policy in the EU are not synchronous. That said, where we have not acted in concert, U.S. and European policy efforts out-of-region have been more difficult to achieve.
U.S. sanctions policies toward Iran, Libya, and Cuba epitomize this point. Few Europeans would disagree with the objective of our Iran and Libya Sanctions Act, to deter Tehran and Tripoli form supporting terrorism or acquiring weapons of mass destruction. Similarly, most Europeans share and advocate our goals for human rights and democracy in Cuba.
Where we and the EU have disagreed, however, is over the means to common ends. As a matter of foreign policy, our European partners have shown much less faith in economic sanctions than we have. In those cases where they acknowledge a role for sanctions, their almost exclusive preference is for comprehensive, multilateral measures. Indeed, the Europeans consider unilateral economic sanctions -- which target countries can more easily evade -- as merely symbolic acts as far as effects on the target countries go. With respect to ILSA and Libertad specifically, the Europeans viewed the Acts to be unilateral attempts to impose US law on non-US companies -- the so-called extraterritoriality claim -- and felt compelled to resist.
The ensuing squabble sullied our bilateral ties with Europe and detracted from the real objective of changing behavior in Tehran, Tripoli, and Havana. The Europeans considered their firms the unintended victims of our sanctions, while we grew frustrated by the seeming unwillingness or inability of our European partners to act quickly and resolutely in the face of a clear security threat and longstanding political oppression.
...But Damage Contained
As vexing as ILSA and Libertad have been for transatlantic relations -- and I do not want to minimize this impact -- we have been able to find sufficient common ground with our European partners to prevent our ties from being irreparably damaged. In the South Pars case, the Secretary determined that waivers would be more effective than sanctions in achieving the objectives of ILSA -- curbing Iran's support for WMD programs and terrorism. We reached agreement with the EU at the May 18 U.S.-EU Summit in London on three joint statements committing the sides to stepped-up cooperation on nonproliferation, counterterrorism, and Caspian energy development.
With respect to the Libertad Act, we agreed that, as part of a new Transatlantic Partnership on Political Cooperation, we would consult more intensively with our European partners on the use of sanctions and our handling of rogue states. For their part, the Europeans, for the first time, embraced, in our May 18 Understanding, the policy of opposition to investment in expropriated properties, which we will both promote through public statements and demarches. They will deny government commercial assistance and support to investments in expropriated property and, because of the expropriation history in Cuba, will also impose a special "filter" on requests for government support or commercial assistance to investments there. The Understanding -- in which, for the first time, the EU acknowledged the illegality of Cuba's expropriations -- will have a profound impact on the decisions of potential investors because they will be reluctant to operate where they know there would be no help from their government should a dispute arise. Castro directly sees the Understanding as the internationalization of the Libertad principles, and he is campaigning vigorously against it.
Sanctions Reform
Although in this decade we have often resorted to sanctions as a foreign policy tool, their potency seems to be diminishing. In today's interdependent, global economy, the ability of the U.S. to unilaterally deny key economic benefits to a target country is sharply limited. There are few products or services for which the U.S. is the sole supplier.
Most telling, though, is that our experience using unilateral sanctions very clearly shows that in the vast majority of cases they fail to change the conduct of the target country. At best, they will be only a contributory -- and not a decisive -- factor in securing the changes of behavior or policy that we seek. Sanctions take time to work, and they may exact significant tolls on other U.S. interests. So, sanctions are not a panacea, not a "quick fix," and not cost-free.
For these reasons, we in the Administration are eager to work with Congress to develop an improved dialogue on sanctions policy, forge an agreement on the issue, and enhance our effectiveness in advancing U.S. national interests. I have visited the Hill on several occasions, including last month in an appearance before the bipartisan Senate Task Force on Sanctions, to share Administration views and concerns about some of the sanctions reforms being considered by Congress. Moreover, I took an active role in negotiating key provisions of legislation passed last week to promote religious freedom around the world, seeking to ensure that the legislation contained appropriate waiver authority and presidential flexibility, along with other key provisions consistent with our sanctions reform objectives. I believe that our work in this case will help promote the noble goal for which we all strive -- to strongly discourage religious persecution -- without causing potentially dangerous rifts with our allies.
It is our view that including appropriate national interest waiver authority in sanctions legislation is the single most important element to ensure that our sanctions laws are effective. Such authority gives the President critical flexibility in selecting the best methods for achieving U.S. objectives. Indeed, the use, or potential use, of waiver authority was a key reason we were able to reach understandings earlier this year with the EU on ILSA and Libertad.
Our European allies will probably be pleased to know that another key principle the Administration believes should guide our discussions about reform is that sanctions work better when they have broad, multilateral support. Multilateral sanctions maximize international pressure on the offending state and show unity of international purpose. Moreover, multilateral sanctions are more difficult to evade or undermine, and they minimize the damage to US competitiveness, distributing the costs of the measures more equitably across many countries.
That said, however, we must always be prepared to act unilaterally if important national interests or core values are at issue and if we are unsuccessful in building a multilateral regime. We cannot permit other countries to veto our use of sanctions by their failure to act.
Euro-Atlantic Partnership for the 21st Century
I want to conclude my remarks by outlining our strategy for implementing the President's vision for our transatlantic relationship.
In Berlin this past May, President Clinton invited our European partners to join in defining his vision of a free, undivided, and integrated Europe in partnership with the U.S. We are taking the next logical steps. We call our plan the Euro-Atlantic Partnership for the 21st Century. The goal is to harness three key transatlantic institutions -- the U.S.-EU relationship, NATO, and OSCE -- in a modern, dynamic, and integrated partnership that has truly global effectiveness. The purpose is to address the three challenges I mentioned earlier -- within Europe, between the U.S. and Europe, and beyond the U.S. and Europe.
An instrument -- the U.S.-EU, NATO, and OSCE summits scheduled for 1999 -- offers a real opportunity to lay the foundation for this new partnership. We do not want these summits to be solely or even primarily celebrations of past accomplishments, of which there are many. Rather, we want them to be the first successful summits of the 21st century.
First, let me make a few comments about NATO. Our goal for the 50th anniversary NATO summit is to look forward toward a larger, more flexible Alliance, committed to collective defense and capable of dealing with a broad range of challenges to Alliance interests.
Collective defense in Europe is, and always will be, the cornerstone of the Alliance. We must never forget this or allow anything to happen that would jeopardize our ability to carry out this irreducible commitment to facing shared risks and shouldering shared responsibilities. That is what NATO was -- and still is -- all about.
Threats to the territory of a NATO member state -- which fall under Article V of the NATO Treaty, which deems an attack against any one member to be an attack against all -- can come from new sources. A potential ballistic missile attack involving weapons of mass destruction on any major European capital from a rogue state or terrorist group is a threat that NATO must be able to confront.
During the Cold War, it made sense for Europeans to focus on their own territory and for the U.S. to assume the primary responsibility for defending common transatlantic interests elsewhere. This approach, however, makes less sense when new threats to our common interests come from beyond our borders. In the U.S.-EU relationship, we often deal collectively with the same issues we do in NATO. For example, new WMD threats may be addressed through NATO and through U.S.-EU agreements to discourage states from acquiring or developing the means to contemplate the use of WMD. We should begin to consider ways in which we deal with common problems through NATO, the EU, and the OSCE.
In fact, events in the field may be outrunning the planning process. The effort to implement the Dayton Accords in Bosnia is an example of the kind of inter-institutional cooperation needed to address the challenges of post-Cold War Europe. NATO, the OSCE, and the EU all have important roles in the effort. Likewise, the new effort to restore peace in and find a political resolution to the Kosovo conflict is another case where all the institutions of the new Europe have important roles -- the OSCE, for example, as leader of the ground verification mission; NATO in the air; and the EU through its assistance programs.
The development of an ambitious agenda for U.S.-EU relations, within the framework of the New Transatlantic Agenda (NTA), remains key to our new vision. The NTA has served us well as a framework for strengthened U.S.-EU cooperation. Our commitment to the NTA process is an expression of our support for a strong, outward-looking Europe as global partner in diplomacy, trade, and other transnational issues, such as the environment.
We have five key elements for our agenda under the NTA:
- First, we will support the EU's further enlargement and integration. The prospect of being part of a democratic and prosperous Union is a powerful incentive to keep democratic and free-market reforms on track in Central and Eastern Europe.
- Second, we want the U.S. and the EU to act as pillars of growth and economic stability in difficult times for the international economy. Accordingly, we are deeply engaged with several leading EU members to coordinate plans to alleviate the international financial crisis. Moreover, we support the emergence of the common European currency.
- Third, we will find ways to make our political partnership with Europe more effective. We must be able to act together quickly to cope with fast-breaking crises in Europe and beyond.
- Fourth, we aim to strengthen our ability to work with the EU to combat everyday threats that have emerged in the post-Cold War world, including organized crime, drug trafficking, terrorism, and child pornography.
- Fifth, we seek to take our partnership beyond the realm of government and more directly into the lives of our people. Under the fourth chapter of the NTA, we are encouraging elements of civil society to forge new alliances and get involved in the policy formulation process. We have seen this most prominently in the Transatlantic Business Dialogue (TABD) but also are seeing parallel efforts by labor interests, in the Transatlantic Labor Dialogue (TALD); consumer groups, in the Transatlantic Consumer Dialogue; and environmentalists, in the Transatlantic Environmental Dialogue (TAED).
A key goal for the two U.S.-EU Summits in 1999 will be to make progress on the Transatlantic Economic Partnership and continue moving toward even stronger transatlantic economic ties.
Finally, the U.S. would like to empower the OSCE to deal even more effectively with crises before they break out and to address their root causes, including inadequate democratic development. Working and cooperating with other security institutions, the OSCE is a key tool for ensuring the success of our strategic objective of creating a continent that is whole, free, prosperous, and at peace.
We believe the time has come for the OSCE to broaden its horizons by expanding its zone of stability, security, prosperity, and cooperation to the Newly Independent States of the Caucasus and Central Asia. We have already taken the first step -- the decision to establish OSCE offices in each Central Asian state. The OSCE summit next year will provide the opportunity to include a greater regional mandate in the OSCE document/Charter. The summit will also give us a chance to elaborate on options for developing new OSCE tools.
Close
In short, we look forward to next year as we build a deeper partnership with Europeans to address the challenges of the coming century. Thank you very much.
