The European Union Craig Kelso, Sam Harrold, Jeff Benes, David Schon, and David Wilson.

The European UnionThe European Union

Craig Kelso, Sam Harrold, Jeff Benes, Craig Kelso, Sam Harrold, Jeff Benes,

David Schon, and David WilsonDavid Schon, and David Wilson

15 Nations of the EU15 Nations of the EU AustriaAustria BelgiumBelgium DenmarkDenmark FinlandFinland FranceFrance GermanyGermany GreeceGreece IrelandIreland ItalyItaly LuxembourgLuxembourg The NetherlandsThe Netherlands PortugalPortugal Spain Spain SwedenSweden United KingdomUnited Kingdom

1997 EU Statistics 1997 EU Statistics

1.249 billion square miles1.249 billion square miles 373.3 million people373.3 million people 298.9 people per square mile298.9 people per square mile GDP $ 8.093 trillionGDP $ 8.093 trillion

Preparing for a Unified Preparing for a Unified EuropeEurope

World War II depleted resources World War II depleted resources The German-French Problem to The German-French Problem to

solvesolve The Communist Threat The Communist Threat Need for UnificationNeed for Unification

– France- EconomicFrance- Economic– Germany- PoliticalGermany- Political

Before there was an EUBefore there was an EU

European Coal and Steel Community European Coal and Steel Community (1951-1958)(1951-1958)– Treaty of Paris April 1951Treaty of Paris April 1951

European Economic Community (1958-1986)European Economic Community (1958-1986)– Treaty of Rome March 1957 Treaty of Rome March 1957

European Community (1986-93)European Community (1986-93)– The Single European Act February 1986The Single European Act February 1986

European Union (1993- present)European Union (1993- present)– Treaty of European Union February 1992Treaty of European Union February 1992

The Politics of the EUThe Politics of the EU

Sam HarroldSam Harrold

Trea ty o f th e E u rop ean U n ion

E u rop ean U n ion

P illa r 1E con om ic an d M on eta ry U n ion

P illa r 2C om m on F org ien an d S ecu rity P o lic y

P illa r 3Ju s tice an d H om e A ffa irs

Maastricht February 7, Maastricht February 7, 19921992

Institutions of the Institutions of the European UnionEuropean Union

European ParliamentEuropean Parliament

European CouncilEuropean Council

Council of the Council of the

European UnionEuropean Union

European European

CommissionCommission

Court of JusticeCourt of Justice

Court of AuditorsCourt of Auditors

Decision Making in the Decision Making in the European UnionEuropean Union

D ec is ion M ake in g in th e E u rop ean U n ion

The CouncilProposal Adoption

A p p rove

The CouncilProposal Adoption through M ajority or Unanim ous Vote

The Com m isionAdopts/Rejects Am endm ents

A m en d

Th e C ou n c ilAppeal through Unanim ous Vote

R ejec t

The European Parliam entHas Three M onths w ith Proposal

The CouncilProposal

The Com m issionProposal

EU AND INTERNATIONAL EU AND INTERNATIONAL TRADETRADE

Jeff BenesJeff Benes

GENERAL TRADE POLICIESGENERAL TRADE POLICIES

Promote liberal tradePromote liberal trade– common external tariffcommon external tariff– elimination of tariffs among memberselimination of tariffs among members– reduced non-tariff barriersreduced non-tariff barriers

EU TRADE WITH JAPANEU TRADE WITH JAPAN

Key market for EUKey market for EU EU key market for JapanEU key market for Japan Both cooperate on multilateral Both cooperate on multilateral

trade issuestrade issues Bilateral trade relations have Bilateral trade relations have

improvedimproved Market access problems remainMarket access problems remain

EU TRADE WITH U.S.EU TRADE WITH U.S.

EU & U.S. each other’s largest EU & U.S. each other’s largest single trading partnersingle trading partner

19% in total EU imports, 17.8% in 19% in total EU imports, 17.8% in total EU exports (1995)total EU exports (1995)

21.2% of US exports, 17.7% of US 21.2% of US exports, 17.7% of US imports (1995)imports (1995)

Trade between EU and US nearly Trade between EU and US nearly 227 billion ECU (1 ECU=$1.134)227 billion ECU (1 ECU=$1.134)

EU TRADE WITH U.S.EU TRADE WITH U.S.

EU second largest market for US EU second largest market for US agricultural productsagricultural products

heavily concentrated in sophisticated heavily concentrated in sophisticated high technology productshigh technology products

EU offers good opportunities for EU offers good opportunities for American suppliers of goods/services American suppliers of goods/services in telecommunications, health & in telecommunications, health & medical, and environmental sectorsmedical, and environmental sectors

CONCERN OVER US TRADE CONCERN OVER US TRADE POLICYPOLICY

Extraterritoriality: Extraterritoriality: persons/companies incorporated in persons/companies incorporated in EU to follow US laws or policies EU to follow US laws or policies outside the USoutside the US

Unilateralism: unilateral sanctions Unilateralism: unilateral sanctions or retaliatory measures against or retaliatory measures against “offending” countries or “offending” countries or companies.companies.

RECENT DEVELOPMENTSRECENT DEVELOPMENTS 1990: EU and the US adopt a 1990: EU and the US adopt a

Transatlantic DeclarationTransatlantic Declaration laying down laying down principles for greater EU-US principles for greater EU-US consultation and cooperation.consultation and cooperation.

1995: EU and US agree on a 1995: EU and US agree on a New New Transatlantic Agenda (NTA)Transatlantic Agenda (NTA) and and Action Action PlanPlan to promote cooperation, to promote cooperation, partnership, and joint action in areas partnership, and joint action in areas ranging from trade liberalization to ranging from trade liberalization to security.security.

RECENT DEVELOPMENTS RECENT DEVELOPMENTS CONT’DCONT’D

1998: EU-US Summit--moving 1998: EU-US Summit--moving closer to launching new drive to closer to launching new drive to liberalize global trade in the liberalize global trade in the twenty-first centurytwenty-first century– removed one of EU’s biggest removed one of EU’s biggest

complaints against US, the complaints against US, the extraterritorial reach of its domestic extraterritorial reach of its domestic lawslaws

The EuroThe Euro

David SchonDavid Schon

What is the Euro?What is the Euro? The Euro is the much anticipated single The Euro is the much anticipated single

European currency.European currency. Many European Big Businesses hope that the Many European Big Businesses hope that the

Euro will cut transaction costs and encourage Euro will cut transaction costs and encourage cross-border mergers.cross-border mergers.

They also hope that it will allow them to They also hope that it will allow them to better compete in the global economybetter compete in the global economy

Not being welcomed by all Nations...Not being welcomed by all Nations... It is expected to equal to about 2 marks It is expected to equal to about 2 marks

($1.18)($1.18)

When will the Euro ArriveWhen will the Euro Arrive

The birth of the Euro will be on The birth of the Euro will be on January 1st, 1999, at which time all January 1st, 1999, at which time all participating currencies will be fixed participating currencies will be fixed against the Euro.against the Euro.

However, the physical Euro will not However, the physical Euro will not appear until January 1st, 2002. For appear until January 1st, 2002. For these 3 years, old currencies will be these 3 years, old currencies will be used as some percentage of the Euroused as some percentage of the Euro

Is the ECB another USFR?Is the ECB another USFR? The European Central Bank is not a The European Central Bank is not a

duplicate of the US Federal Reserves duplicate of the US Federal Reserves The US Federal Reserve has two primary The US Federal Reserve has two primary

goals, price stability & employment and goals, price stability & employment and economic growth.economic growth.

The ECB has only one goal, to provide The ECB has only one goal, to provide economic stabilityeconomic stability

The ECB also faces the problems associated The ECB also faces the problems associated with handling 11 politically diverse nationswith handling 11 politically diverse nations

What Effects will this have What Effects will this have World-Wide.World-Wide.

In the United States, the Euro is expected In the United States, the Euro is expected to create an economic block that can to create an economic block that can compete with Domestic Economy.compete with Domestic Economy.

““Euroland” will have a population that Euroland” will have a population that exceeds that of the US by 23 millionexceeds that of the US by 23 million

It will force firms to completely change It will force firms to completely change their perspectives on international tradetheir perspectives on international trade

On the up side, tourist will take no losses On the up side, tourist will take no losses from border to border in Europe.from border to border in Europe.

Will the Euro Work?Will the Euro Work? This is a good question.This is a good question. One year ago, many did not feel that the One year ago, many did not feel that the

Euro would be on track.Euro would be on track. Today the idea of common currency uniting Today the idea of common currency uniting

such diverse nations is still very such diverse nations is still very questionable, especially with certain nations questionable, especially with certain nations like Britain being excluded (for present).like Britain being excluded (for present).

Politics will ultimately make or break the Politics will ultimately make or break the Euro...Euro...

The Future of the EUThe Future of the EU

David WilsonDavid Wilson

By the year 2000…...By the year 2000…... Set up a single currency, the “Euro”Set up a single currency, the “Euro” Reform political machinery and Reform political machinery and

policies to cater for larger unionpolicies to cater for larger union Establish a new financial frameworkEstablish a new financial framework Decide on guidelines for future Decide on guidelines for future

defensedefense Economic and Monetary Union by Jan Economic and Monetary Union by Jan

1, 19991, 1999– Denmark and Great Britain around 2002.Denmark and Great Britain around 2002.– Euro becomes legal tender in 2002.Euro becomes legal tender in 2002.

Increased World Increased World EffectivenessEffectiveness

More influential than ever beforeMore influential than ever before Proactive rather than reactive to political and Proactive rather than reactive to political and

global changesglobal changes Assertion of “new identity”Assertion of “new identity” A common (united) foreign security agreementA common (united) foreign security agreement Possible common defense policyPossible common defense policy The “Euro”The “Euro”

– provide access to lower interest ratesprovide access to lower interest rates– better stability and reliabilitybetter stability and reliability– eliminate inefficiencies in transactionseliminate inefficiencies in transactions– no internal exchange rate uncertaintyno internal exchange rate uncertainty– will attract foreign investmentwill attract foreign investment

A Citizens European UnionA Citizens European Union ““In the future, the EU’s institutions will In the future, the EU’s institutions will

have to become more responsive to the have to become more responsive to the needs of its citizens and to be more needs of its citizens and to be more open, transparent and democratically open, transparent and democratically accountable”accountable” Le Figaro Le Figaro

Reduced unemploymentReduced unemployment New improved environmental protection policiesNew improved environmental protection policies Protection of human rightsProtection of human rights Voters will feel more involved in europeVoters will feel more involved in europe Increased powers of justiceIncreased powers of justice A more cohesive, inclusive societyA more cohesive, inclusive society

Other United Fronts…...Other United Fronts…...

One common energy (power) grid for the unionOne common energy (power) grid for the union An integrated transportation networkAn integrated transportation network Development in progress for a re-vamped Development in progress for a re-vamped

common agricultural policycommon agricultural policy Common policies on:Common policies on:

– ImmigrationImmigration– VisasVisas– AsylumAsylum

Expansion of area covered by NATOExpansion of area covered by NATO

Where to from here?Where to from here? Expansion to the east - 100 million new members Expansion to the east - 100 million new members

by early next decadeby early next decade As many as 30 new members - As many as 30 new members -

– Hungary, Poland, Estonia, Czech Rep. and Slovenia to join Hungary, Poland, Estonia, Czech Rep. and Slovenia to join union approximately 2003union approximately 2003

– Bulgaria, Romania, Latvia, Lithuania and Slovakia (later Bulgaria, Romania, Latvia, Lithuania and Slovakia (later on…)on…)

Deepening economic and monetary union Deepening economic and monetary union Increased powers for the European Parliament???Increased powers for the European Parliament??? Build a Europe so strong, that it never splits againBuild a Europe so strong, that it never splits again New political reality - a new EuropeNew political reality - a new Europe A leaner Union - less welfareA leaner Union - less welfare

How will this affect the How will this affect the United States?United States?

Business will be enticed to expand into europe Business will be enticed to expand into europe because of a rapidly expanding but stable market because of a rapidly expanding but stable market opening upopening up

Loss of defense contractsLoss of defense contracts New, higher level of competition with the USNew, higher level of competition with the US The “euro” - competition as a world leading The “euro” - competition as a world leading

currencycurrency European mergers will continue, offering stiff European mergers will continue, offering stiff

competition for US companies (eg. Airbus)competition for US companies (eg. Airbus) Possible stand-offs, trade wars and political Possible stand-offs, trade wars and political

stalemates as continents differ on global issues.stalemates as continents differ on global issues.

Potential Barriers to Potential Barriers to UnificationUnification

Division between:Division between:– larger and smaller countrieslarger and smaller countries– poorer and richer countriespoorer and richer countries– northern and southern countriesnorthern and southern countries– economic liberals and protectionistseconomic liberals and protectionists

Disagreement between “federalists” (Germany and Disagreement between “federalists” (Germany and Benelux countries) and nation states (Great Britain)Benelux countries) and nation states (Great Britain)

Countries will have to swallow national prideCountries will have to swallow national pride Steady erosion of social democratic parties due to re-Steady erosion of social democratic parties due to re-

orientation to profitabilityorientation to profitability Economic gap between EU nations and those Economic gap between EU nations and those

preparing to enter the EUpreparing to enter the EU