A Strong European Union Is in the U.S. InterestEizenstat, Stuart (Under Secretary of Commerce for International Trade) Notes on Economic Affairs, No 14, May 31, 1996, 6p

This is an article published by Stuart Eizenstat, former U.S. Representative to the European Union, after he left his post in Brussels

Transatlantic Free Trade Preeg, Ernest H. (Center for Strategic and International Studies)

The Washington Quarterly, Spring 1996, pp. 105-112

In this essay, the author addresses the rationale for a Transatlantic Free Trade Agreement (TAFTA): "the substantive composition of an    agreement, the impact on the overall international trading system, and the broad strategic consequences." He sketches out "first steps that can be taken in 1996 to lay the groundwork for a more formal initiative in 1997."

Transatlantic Free Trade Hufbauer, Gary; Kotschwar, Barbara (Institute for International =

Economics) The Washington Quarterly, Spring 1996, pp. 112-117

"Over the past few years, the transatlantic economy has been rediscovered  by politicians who might agree on little else... Why this renewed interest in formalizing the U.S.-E.U. economic relationship?"

U.S.-EC Economic Relations

USIS File, September 1997, 29p

This file contains three testimonies on the implications for U.S. trade policy of the New Transatlantic Agenda initiative and associated activities before the House of Representatives' Trade subcommittee (Deputy U.S. Trade Representative Jeffrey Lang, Timothy Hauser and Franklin Vargo from the Commerce Department) and a speech delivered by Under Secretary Stuart Eizenstat on the New Transatlantic Agenda.

The Transatlantic Business Dialogue: New Paradigm for Trade Expansion and Regulatory Harmonization

Stern, Paula Stern, Paula House Committee on International Relations, September 10, 1997, 16p

"This article maps the progress of TABD since its inception in late 1995 and outlines an ambitious future agenda to deepen and widen TABD's activities both commercially and geopolitically."

The Transatlantic Initiative -- Opportunities and Prospects

Berry, Willard (European-American Business Council) Berry, Willard (European-American Business Council) House Committee on International Relations, September 10, 1997, 6p

Willard Berry spoke on a number of issues, including the Helms-Burton law and other economic sanctions, the impact of sanctions on U.S.-E.U. trade, biotechnology, telecommunications, investment and taxation policies, and the achievements of the New Transatlantic Agenda.

Economic Benefits of NATO Expansion

U.S. Deputy Treasury Secretary Lawrence Summers U.S. Deputy Treasury Secretary Lawrence Summers April 11 speech to the U.S. Chamber of Commerce, 6p

The security benefits of an expanded North Atlantic Treaty Organization (NATO) would be matched by economic benefits to Europe and the United States, says U.S. Deputy Treasury Secretary Lawrence Summers. "Most important, by preserving and deepening the stable security environment that now exists in Central Europe, NATO enlargement will ensure that the region's robust economic growth can continue."

U.S.-EU Economic Relations

USIS File, December 1998, 48p This file includes speeches, statements issued during the Transatlantic Business Dialogue (November 6, 1998) and the last U.S.-EU Summit (December 18, 1998), and the Transatlantic Economic Partnership Action Plan.

A Fast Track for Labor

Compa, Lance (Cornell University) The American prospect, September/October 1998, pp 60-64

"Saying no to trade agreements won’t stop trade. Labor’s advocates need to support realistic proposals for modifying NAFTA and other pacts.

Antidumping Laws and the U.S. Economy

Mastel, Greg Economic Strategy Institute, 1998, 11p - http://www.econstrat.org/antidump.htm

Here is the conclusion of Greg Mastel’s book. "Over close to a century of operation, antidumping laws have established a strong record of performance. There is a compelling historical, legal, moral, and economic case for the continued application of such laws...In today’s international trade environment, antidumping laws are more essential than ever."

Who Will Own Your Next Good Idea?

The Atlantic Monthly, Sept. 1998, pp. 57- 82 - http://www.theatlantic.com/issues/98sep/copy.htm In his wide-ranging look at the piracy and economic devaluation problems generated by intellectual property's transformation into electronic form, Charles Mann encapsulates the ongoing U.S. copyright debate. On one side, libertarian futurists, predicting that the economic justification for copyright will vanish and that anti-piracy hardware will fail, advocate eliminating copyright altogether. On the other side, software companies and publishers endorse strengthening the hand of copyright owners through legislation that would overhaul the nation's intellectual-property regime.

*EIZENSTAT, BANDLER BRIEF ON U.S.-EU SUMMIT

Washington -- President Clinton and top administration officials met with European leaders at the White House to conduct one of their semi-annual U.S.-EU summit meetings.

Following the talks, Under Secretary of State Stuart Eizenstat and Senior Director of the National Security Council for European Affairs Don Bandler briefed reporters.

PRESS BRIEFING BY UNDER SECRETARY OF STATE STUART EIZENSTAT, AND SENIOR DIRECTOR OF THE NATIONAL SECURITY COUNCIL FOR EUROPEAN AFFAIRS DON BANDLER

CROWLEY: Good afternoon. We had a very successful U.S.-EU summit here today, with the President participating in a couple of sessions with his European Union counterparts and then hosting them for lunch. And here to give you a readout on these sessions, we have two distinguished briefers -- Don Bandler, who is the Senior Director of the National Security Council for European Affairs, and Stu Eizenstat who, I'm tempted to say, is the Under Secretary of State for all things extraordinarily complicated -- but Under Secretary of State for Economic, Business and Agricultural Affairs. Don Bandler will start off.

BANDLER: Thank you, P.J. Good afternoon. Well, we just concluded our semi-annual summit meeting with the European Union. The current President of the EU, which is Austrian Chancellor Klima, and the President of the European Commission, Jacques Santer, led the EU side. Secretary Albright, Secretary Rubin, Daley, Glickman and Barshefsky, participated from our side; while the Austrian Foreign Minister, Mr. Schuessel, and the Economics Minister the European Commission Vice President, Sir Leon Brittan, sat in from the European side.

The format was that trade and economic officials met early in the morning in a ministerial-level session -- first with experts and then followed by a full ministerial at the Blair House. The President hosted his counterparts for a small working lunch, which lasted about 40 minutes, 45 minutes, before chairing a full plenary in the Cabinet Room here in the White House. "He spent about two hours with the EU leaders and delegations overall,".

As you know, the EU is embarking on a new phase of economic integration on January 1st, with the start of the European Monetary Union. Chancellor Klima presented the President with the first two Euro coins. Unfortunately, the President will not be able to use them until 2002, when they become legal tender. But, during the interim, they look pretty.

The leaders focused on the contribution of the U.S. and the EU to global economic growth, financial stability; and both stressed the importance of open markets, highlighting our shared roles as engines of growth for the international economy at a time when it has experienced severe difficulties.

They acknowledged the work done to frame and start the action plan for implementing the Transatlantic Economic Partnership, which was agreed last May at the London U.S.-EU summit. They also engaged in lengthy discussion on joint political cooperation in areas of common interest on foreign and security policy, touching on Iraq, focusing as well on Kosovo, the Middle East peace process, Russia and some issues of regional and global cooperation, including Y2K, climate change, terrorism and international crime.

Under Secretary Eizenstat will address the new Transatlantic agenda, economic and trade issues, which were a very important element of the whole summit. And if there's time and interest we can come back and touch a little more on some of the foreign policy issues.

EIZENSTAT: Thank you, Don. On the economic side, the two parties stressed the fact that the U.S. and Europe were the engines of growth and stability in a very uncertain global economic environment, and that we therefore had a special responsibility for pro-growth policies. We noted the fact that there have been interest rate cuts on both sides of the Atlantic and that we both were pursuing pro-growth policies; and that we had an additional responsibility as the twin engines of growth and stability in the world economy, and that is to keep open markets.

There was a recognition that this was a difficult process. The fact that we launched the Transatlantic Partnership negotiations today, which will cover electronic commerce, technical barriers to trade and mutual recognition agreements in areas like professional services, insurance, air courier services, elevators, telecommunications, cosmetics, calibration equipment -- we'll be working on food safety and biotech issues, intellectual property rights and the environment -- is a recognition that we can show the way for the world to keep markets open during this difficult time by ourselves liberalizing our own trade.

We have the largest trade relationship and economic relationship in the world -- $1 trillion a year -- and therefore we have a special responsibility to show the world that open markets are the way to go. At the same time, it was recognized that there are pressures because of the growing trade deficit. The President mentioned several issues in particular. He talked about the fact that there was a surge in steel imports, a 500 percent increase, for example, in hot rolled steel. And he asked the European Union to do more to help absorb steel, particularly that coming from Russia; and asked them to be sympathetic to the requests that Russia has made for the European Union countries to take more steel -- as, in fact, we are having to absorb ourselves -- to take some of the burden off the United States.

We noted in the trade area the areas where we are in significant agreement -- the conditions for China to enter the World Trade Organization, the need for greater transparency and openness in the World Trade Organization, the need to come to a resolution on the issue of privacy over the electronic commerce and Internet, how close we're coming to a veterinary equivalence agreement. But we also noted several differences that were mentioned by Ambassador Barshefsky and by the President.

Those were Airbus subsidies, where the President specifically mentioned -- as did Charlene Barshefsky -- the need for greater openness and transparency on subsidies and, in particular, concern about new government support from Europe for a new generation of super jumbo jet. And there was a discussion as well about the importance of implementing WTO panel decisions in favor of the U.S. and against the European Union in the banana and beef issues.

We believe that these are very important issues in and of themselves, but also because they go to the heart of compliance with the WTO system. We have to have confidence that when we win WTO cases that the results will be implemented. We have won on three occasions with respect to bananas and we still believe that the European Union does not have a WTO-consistent regime. But at the same time we thought it important to stress that the resolution of the banana issue should be done consistent with the WTO, in WTO-consistent ways; and that as important as these issues are -- and they are very important -- that we will not allow our relationship to purely be defined by these and that overall our trade relationship and economic relationship is strong, healthy and we have an essentially balanced trade relationship while our trade relationship with Asia and other regions is very imbalanced.

We also dealt with a range of global issues. The President mentioned two in particular -- the importance of cooperation between the European Union and Russia in dealing with what we call the Y2K issue, the problem of the computers not reading a four-digit 2000 figure and the disruption that this could potentially have. The President made a special plea that we cooperate together in terms of developing countries and with Russia and the Ukraine.

The President also made a very, very strong statement about the importance of cooperation on climate change. He noted the fact that we are doing a great deal domestically but that, in order to make climate change affordable -- and the Kyoto Protocol affordable -- it was important that we have the opportunity to trade without artificial restrictions and caps, and that we needed to cooperate to avoid putting these artificial constraints on trading, as well as to cooperate in getting developing countries to participate.

At the ministerial level, the global issues were discussed also in terms of nonproliferation, where we noted the increasing degree to which the European Union is working with us on controlling exports of sensitive, high-tech material to third countries, the increasing cooperation we have. And we noted in particular our desire to cooperate in the safe disposal of excess Russian weapons-grade plutonium, and we called on the European Union to cooperate in this regard...

So I think that the basic two points of this summit are a recognition of our shared responsibility as engines of growth and stability in an uncertain global economic environment; and, second, the degree to which -- enforced by four joint statements, one dealing with -- these four statements dealing with the global economy, with the Middle East peace process, with the agenda that we have to broaden our dialogue with environmental groups and consumer groups, and on the western -- the Balkans; that we are now cooperating politically as never before...

QUESTION: Under Secretary, as a sideline, sir, Leon Brittan said earlier that he thinks that this banana trade war could be actually settled within a few weeks. I was wondering if the U.S. also shares this viewpoint?

EIZENSTAT: We're continuing to try to work our way through the very difficult banana dispute. At least on the procedural side, there has been some narrowing, but we have not yet reached an agreement. We think it's very important to settle this expeditiously and in a way that is consistent with the World Trade Organization procedures, and we will be doing that.

But at the same time, we have waited a very long time -- this dispute has been going on for six years -- and it is time to resolve it. We have won three panel cases, and there is a question of how long one can be patient before acting. So we hope that this can be resolved. We will do everything we can to resolve it. But, again, we do have some concerns about the length of time this has taken, and the fact that, in our opinion, even after winning another panel decision recently, the EU's proposed remedy, we believe, is still not consistent with that panel's decision.

Q: Just to follow up, will the U.S. continue to delay publication of the retaliation list?

EIZENSTAT: I think the USTR will be making some judgments on that but there will be no further delays with respect to the actions that will be taken, and they'll be taken in a WTO-consistent manner.

Q: Sir Leon was talking about an extension of maybe a few weeks, in which he thinks that these things could be worked out at a technical level. Is the United States prepared to show that much flexibility in order to put this whole thing behind us?

EIZENSTAT: Well, we're trying to consider some new proposals that have been discussed. I'm not in the position yet to say what we can accept and what we can't accept, but we want to resolve this as quickly as possible. We are willing to consider as many options as possible, but we do not think, at the same time, that we should postpone some of the actions that have been planned to keep this process moving in the interim, while we discuss the question of March 3rd versus other dates...

Q: You said that there were some new proposals that were put out for discussion on the banana dispute. Was that the United States or the European Union that put forward these proposals? And can you give us any idea of what they're on?

EIZENSTAT: No, I think I shouldn't go into any details. At this point, they're really procedural issues as to what type of WTO process might be involved and whether or not that can be accomplished by March 3rd or sometime shortly thereafter. Those issues are all being considered at this point and we haven't reached any final decision on that. But other parts of the process have to continue to go forward and will go forward, while we're continuing to work on the procedural side of this.

Q: Under Secretary Eizenstat, I was wanting to ask you about the beef/hormone issue, too. What actually happened on that issue --

EIZENSTAT: Secretary Glickman raised this very strongly at the ministerial and mentioned that in some respects this could potentially dwarf the banana issue in terms of its impact. We have won a WTO panel decision. The EU is supposed to come into compliance in May. And that, again, it is very important so that there is confidence in the public in this country and on Capitol Hill that when we take matters to the WTO process and avoid taking unilateral steps, that that WTO process, when we're successful, can be faithfully implemented.

That is critically important with beef. Secretary Glickman, again, made a very strong statement about the importance of this. We do have until May, but it was noted that we needed to get moving on this. This is, we know, a very sensitive issue. But it has been shown by the WTO, as well as by scientific data, that the hormone issue is not a safety issue, it is not a health issue and we hope, again, the EU can come into compliance. This is a very, very large issue for us, a very important issue.

Q: Is there any time line for the U.S. and the EU under the TEP to come up with a common position on the upcoming trade negotiations? When do you expect a statement on that?

EIZENSTAT: Well, we hope we can make progress on a lot of the bilateral issues by the time of the December 1999 ministerial or the fall ministerial, whenever the actual date is set. But some of these issues will go beyond that. We don't have an artificial deadline. We want to have early harvests for as many of these issues as possible. We have everything from marine safety equipment to a lot of other MRAs. We hope that those can be done fairly quickly.

Some of the food safety and biotech issues may take longer. We need to get our scientists and regulatory agencies together. So we're not trying to put artificial deadlines on this but we do hope that there can be some early harvests by the time of the ministerial. And, again, I hope you'll understand that with respect to the banana issue it is at a sensitive stage at this point. I can't go into a lot of details. We both want to try to resolve this in ways that bring the EU into compliance with the WTO requirements and to do so in a WTO-consistent way..

*JOINT US-EU STATEMENT ON NEW TRANSATLANTIC AGENDA DIALOGUES

(The following statement on Chapter IV of the New Transatlantic Agenda Dialogues was issued at the conclusion of the U.S.-EU Summit, which took place December 18, 1998, at the White House.)

JOINT US-EU STATEMENT ON CHAPTER IV NEW TRANSATLANTIC AGENDA DIALOGUES

The United States and European Union affirm their commitment to the process of strengthening and broadening public support on both sides of the Atlantic for the U.S.-EU partnership by fostering "people-to-people" transatlantic links between non-governmental actors. We applaud the steps taken during the Austrian EU Presidency to further the process of building bridges across the Atlantic, in particular, the establishment of the Transatlantic Consumer Dialogue and the on-going and constructive input we receive from the Transatlantic Business Dialogue. We have given encouragement to the Transatlantic Labor Dialogue to develop further its program of work. Building on work that began this year, we look forward to the formal launching of a Transatlantic Environmental Dialogue early next year. We welcome contacts that are taking place between development NGOs with a view to the possibility of establishing a Transatlantic Development Dialogue.

We look forward to these dialogues providing recommendations to us on an ongoing basis on issues of mutual concern, as they have done for today's Summit. We welcome input from these dialogues as well as other sectors of society to help shape our agenda.

We will work with all of the transatlantic dialogues to ensure that lines of communication to government are balanced and open. We will work with the dialogues to help ensure their sustainability. This process will require resources and support from outside of government, and we will encourage the development of links with the private sector, including foundations. We reaffirm our commitment to support initiatives to deepen the commercial, social, cultural, scientific and educational ties between our respective societies. We recognize that there is much that our transatlantic communities can learn from one another

*US-EU STATEMENT ON COOPERATION IN THE GLOBAL ECONOMY

(The following statement on U.S.-EU Cooperation in the Global Economy was issued at the conclusion of the U.S.-EU Summit, which took place December 18, 1998 at the White House.)

The U.S. and the EU are engines for global economic growth. We share a common vision of a market-based global economy and particular responsibilities for promoting stability, continued growth, and prosperity. We must lead the way in keeping markets open. A rules-based international trade system and a strengthened international financial system are necessary to ensure transparency and predictability and to maintain public confidence in the benefits of open economies. We are concerned about the serious social and economic impact of the financial crisis on many countries, and we will work together with them in the face of their major economic difficulties.

We are committed to promoting open markets through further broad-based liberalization, including through strengthening the multilateral trading system, and through the Transatlantic Economic Partnership (TEP) on which we agreed in London in May. We have drawn up, and started to implement, a Joint Action Plan to pursue this Partnership. It will contribute to further market opening and strengthening of links between the U.S. and EU economies in ways that support and point the way for further multilateral liberalization, while benefiting our peoples. The TEP initiative will enable us to launch bilateral negotiations for the further reduction of trade barriers. We have now set in train a regular and comprehensive dialogue between us on multilateral trade issues and future World Trade Organization (WTO) negotiations. We attach high importance to the full respect of multilateral rules. We are determined to resolve trade disputes between us.

The Mutual Recognition Agreement, which entered into force December 1, is an example of how the U.S. and EU are striving to remove transatlantic barriers. The agreement covers six sectors and will save our private sectors as much as $1 billion annually. In reducing trade barriers, we re-affirm our commitment to preserving high levels of health, safety, consumer and environmental protection. We strongly support the current bilateral discussions aimed at achieving high standards of data privacy protection and avoiding transatlantic interruptions in exchanges of personal data. While continuing current efforts to avoid such interruptions, we would like to conclude the discussions successfully as soon as possible.

We intend to enhance our economic dialogue and cooperation, both bilaterally and in the context of international institutions and fora, to ensure that we act in a coherent and constructive manner.

We agree on the need to strengthen the international financial system and national financial sectors in order to capture the full benefits of international capital flows and global markets, minimize disruption, and better protect the poorest and most vulnerable. It is important that all in the global economy play their part to promote sustainable growth and financial stability, by pursuing economic policies aimed at strengthening their national economy and enhancing their economic performance. We reiterate the importance of implementing the October 30 recommendations of G-7 Leaders and G-7 Finance Ministers and Central Bank Governors and look forward to additional proposals that they will develop, in consultation with other key countries, prior to the Cologne Summit.

We welcome the impending introduction of the Euro on January 1, 1999, which will be an event of historic significance. We look forward to a successful European Economic and Monetary Union that contributes to growth and to stability in the international monetary system.

We reaffirm our commitment to development cooperation, which has among its main objectives the fight against poverty, the creation of conditions favorable to economic growth and sustainable development, and the participation of the most vulnerable in this process. The prompt and generous U.S. and EU responses to the devastation caused by Hurricane Mitch in Central America are an example of our commitment. We will seek to ensure good coordination of international donor assistance to respond effectively to crises.

We call upon developing countries and economies in transition to continue the liberalization of trade and to develop clear, stable, and open regimes for investment. We urge the crisis-affected countries to promote sustainable recovery by pursuing full and proper economic restructuring. We support IMF [International Monetary Fund] conditionality as a means to promote sound macroeconomic policies. We welcome the fact that several governments have acted swiftly to minimize the negative impact of the crisis. We stress the importance of good governance and the respect for human rights, including core labor standards, efficient and transparent institutions, and more effective investment in education, training, and research. We will seek to ensure and support fuller participation of the developing countries in the WTO [World Trade Organization] and in future multilateral trade negotiations, with a view to better integrating them into the world economic system. In particular, we will seek to improve the trading opportunities for the least developed countries. We will each continue to support regional integration efforts.

Senior officials will report to the next U.S.-EU Summit on the practical implementation of this cooperation on the global economy.

*SENIOR LEVEL GROUP REPORT TO THE U.S.-EU SUMMIT

(The following statement on the Senior Level Group Report to the U.S.-EU Summit was issued at the conclusion of the U.S.-EU Summit, which took place December 18, 1998, at the White House.)

SENIOR LEVEL GROUP REPORT TO THE U.S.-EU SUMMIT

The U.S. and EU had a successful period of cooperation within the framework of the New Transatlantic Agenda (NTA) under the Austrian Presidency. We have worked on the implementation of the various understandings and agreements reached at the U.S.-EU Summit in London May 18, 1998, and launched a number of new initiatives. Our cooperation in the face of the global economic crisis, in the Western Balkans, and with regard to the Middle East Peace Process underscores the importance and value of the U.S.-EU partnership.

We have worked together to promote peace, stability, democracy and development:...

We worked together to respond to Global Challenges, to fight organized crime and protect the environment:...

We are expanding world trade and building closer economic relations:

We agreed on the Transatlantic Economic Partnership (TEP) action plan and launched implementation. The TEP will expand and deepen economic relations between the U.S. and the EU by lowering barriers for both goods and services. Under the action plan, we have started a regular dialogue on a broad range of multilateral trade issues. We brought the Mutual Recognition Agreement (MRA) into force on December 1 and have explored additional sectors to add to it. We convened the first major partnering event of the Transatlantic Small Business Initiative in Chicago in October that led to intensified business contacts between about 250 European and U.S. companies in a broad range of sectors. We have started implementation of the recently signed Positive Comity Agreement, which improves U.S.-EU cooperation on anti-competitive practices in cases of mutual concern. We held discussions aimed at achieving high standards of data privacy protection and avoiding interruptions in transatlantic exchanges of personal data. We held the Luxembourg Safety and Health Conference and the Washington Labor Codes of Conduct Symposium. We held the Madrid Disabilities Conference to promote cooperation in the expansion of employment opportunities for people with disabilities. We have identified possible opportunities for cooperation in achieving a Global Navigation Satellite System.

We have expanded contacts across the Atlantic:

We implemented many of the recommendations from the 1997 Rome Transatlantic Business Dialogue (TABD) Conference. We participated in the fourth annual TABD conference with over 100 CEOs from both sides of the Atlantic in Charlotte, North Carolina, November 5-7. We welcomed and supported the launch of the Transatlantic Consumer Dialogue (TACD) September 25-26 in Washington. We discussed modalities and provided seed funding for the Transatlantic Environmental Dialogue (TAED). We have continued to support the efforts of the Transatlantic Labor Dialogue. We agreed to intensify efforts to generate sustainable sources of funding for transatlantic ties. We initiated contacts between the U.S. Supreme Court and its European counterparts, the first ever judicial branch activity under the NTA. Members of the U.S. Congress and the European Parliament continued their regular exchange by meeting in Houston, Texas. The U.S.-EU Science and Technology Agreement entered into force. We held the first official Joint Consultative Group (JCG) meeting to discuss cooperation and concluded implementing arrangements on cooperation in information technology and standards/metrology.

Priorities for the Future

We will continue our cooperation on all of the issues discussed above including the implementation of the various understandings and agreements reached at the U.S.-EU Summit in May 1998. In addition, we will explore options for strengthening and building upon the U.S.-EU relationship and the NTA with a view towards meeting the challenges of the twenty-first century.

Diplomatic Cooperation:...

Global Challenges:...

Trade and Economic Relations: Our top economic priorities for the next six months will include:

Implementing the TEP: We will ensure full implementation of the TEP action plan according to target dates and initiate negotiations on identified areas. This will help ensure that our wider cooperation on economic matters is not undermined by trade disputes between us.

We will cooperate for a successful WTO ministerial in 1999 with a view to preparing the WTO's future agenda. We reaffirm our commitment to strive for the ratification of the WTO financial services agreement by all WTO members by the agreed deadline of January 29, 1999, thus allowing the commitments in that agreement to enter into force by March 1, 1999. We will work together with other WTO members to promote action to enhance the transparency of WTO operations, and we will foster opportunities for dialogue on multilateral trade issues with stakeholders. We will promote the successful conclusion of the second Information Technology Agreement. We will encourage ratification of the OECD anti-bribery convention.

On data privacy protection, we will continue current efforts to avoid disruptions, while we work urgently to bring to a successful conclusion discussions on avoiding interruptions in transatlantic exchanges of personal data. We will work to implement, to the maximum extent possible, TABD recommendations. We will sign a Veterinary Equivalency Agreement that will reduce barriers to exports worth $3 billion in two-way trade while retaining the highest level of safety for consumers. We will build on Global Navigation Satellite System discussions with a view to possibly establishing an agreement on cooperation. We expect to begin negotiations on issues regarding bilateral wine trade. We will continue to support various projects of the Transatlantic Small Business Initiative. We plan to hold further seminars on important labor and social issues which will include interested parties, including non-governmental parties..

USTR BARSHEFSKY STATEMENT CONCERNING U.S.-EU SUMMIT

(US and EU "must act to spur global economic recovery") Following is the text of the statement:

DECEMBER 18, 1998

STATEMENT BY UNITED STATES TRADE REPRESENTATIVE CHARLENE BARSHEFSKY CONCERNING THE U.S.-EU SUMMIT TRADE DISCUSSIONS

"We have had as part of this latest U.S.-EU Summit a wide-ranging and thoughtful discussion of bilateral and multilateral trade issues, from our new Transatlantic Economic Partnership initiative to the next WTO Ministerial to various WTO disputes of immediate concern.

"This meeting reminds us once again of the huge size and importance of the transatlantic economic relationship and the stake both the United States and the European Union have in the continued health of the multilateral trading system. We have a $300 billion-plus trade relationship, and the size and complexity of this relationship will bring us into pointed disputes from time to time. But particularly in light of the current global financial difficulties, the United States and the EU must act to spur global economic recovery and continue to press ahead on a broad trade agenda to keep markets open around the world. This is absolutely critical if a further worsening of economic conditions in the world is to be held off.

"The United States and the EU have been the anchors of the world trading system since it was founded over 50 years ago. Our enormous and highly interconnected trade and economic relationship would not be possible without the efforts we have expended over the years to forge an effective framework in which commercial activity can grow. We both must display leadership in protecting and strengthening the WTO system.

"The WTO was designed to help put, to the extent possible, potentially explosive trade problems into a rules-based context. The system can only function if all sides, particularly the United States and the EU as the two biggest actors, respect the rules. Using procedural loopholes to avoid fulfilling the requirements of panel decisions undermines the integrity and effectiveness of the system. We will continue to insist that panel rulings be implemented within the reasonable time period.

"We have noted with satisfaction the formal launch of activities under the Transatlantic Economic Partnership, which seeks to further build-out our trade relationship. The TEP Action Plan finalized last month sets a very ambitious agenda in both the bilateral and multilateral arenas for fulfillment by the end of 1999.

"In all of our work in both the WTO and bilateral contexts, the United States and the EU must also lead the way in involving all elements of society having an interest in trade questions. Success here will be crucial to ensuring that trade policies have the broadest possible support among the general population

*USTR LISTS EUROPEAN PRODUCTS SUBJECT TO INCREASED TARIFFS

(December 21 announcement and product list)

Washington -- U.S. Trade Representative Charlene Barshefsky has confirmed that the United States will increase tariffs on a variety of European products early next year "as a result of a dispute with the European Union (EU) over its discriminatory banana policies.".

Following is the announcement issued by the Office of the USTR:

United States Trade Representative Charlene Barshefsky confirmed today that in January 1999 the United States will exercise its right under World Trade Organization (WTO) procedures to increase tariffs on selected European products as a result of a dispute with the European Union (EU) over its discriminatory banana policies. In preparation for exercising U.S. WTO rights, the Office of the U.S. Trade Representative (USTR) has developed a list of European products on which the United States would impose prohibitive 100% duties as early as February 1 pursuant to WTO procedures. Today's announcement identifies those products that the USTR intends to include on the list, to be submitted to the WTO in January, as well as two additional processed agricultural products that may be added to that list following a review of public comments on those two products.

In announcing this action, Ambassador Barshefsky explained, "Over the last six years, two GATT panels, one WTO panel, and the WTO Appellate Body have all ruled against the EU banana policies, and the EU has refused to comply with any of those rulings. We have made repeated attempts to resolve this matter with the EU through negotiations. The European Union, however, has rebuffed all of these attempts. Therefore, the next step is to invoke the WTO procedures that authorize us to take action offsetting the damage caused by the EU's discriminatory banana regime." She added, "At the same time, our door remains open to a negotiated solution consistent with the EU's WTO obligations."

In 1996 the United States joined Ecuador, Guatemala, Honduras and Mexico in resorting to WTO dispute settlement proceedings after the EU had blocked two prior adverse GATT panel rulings against the EU's banana policies. Following the WTO rulings against it in September 1997, the EU refused to consult with the United States or its Latin American co-complainants to reach a mutually acceptable solution. Instead, it modified its regime in a way that perpetuates the discriminatory aspects of the prior regime. Then the EU unilaterally declared itself to be in compliance.

WTO procedures permit the United States on January 21 to seek WTO authorization to increase tariffs in an amount equivalent to the harm caused by the EU regime. These same procedures also require that the WTO grant the U.S. request by January 31, unless the EU requests arbitration to determine whether the amount of the U.S. action is equivalent to the amount of harm caused to the United States by the EU regime. According to WTO rules, such arbitration must be completed by March 2 and then the U.S. request to increase tariffs must be granted. Consistent with this schedule, Ambassador Barshefsky announced that "the increased tariffs will go into effect on February 1, or no later than March 3 if the European Union requests WTO arbitration to review the amount of the proposed increase in tariffs."

The proposed increase in tariffs will not affect imports from the Netherlands or Denmark. "The United States is excluding the Netherlands and Denmark in recognition of their voting records against the adoption of the new EU banana regime," explained Ambassador Barshefsky.

The Office of the U.S. Trade Representative also announced that it will be seeking additional comments on the possible inclusion of certain pork and olive products (HTS 0210.19.00 and HTS 2005.70.60.50) in the list of products to be submitted to the WTO in January. USTR will publish a Federal Register notice requesting public comment on these two products, and the deadline for such comments will be January 13.

Background

On May 8, 1996, the WTO Dispute Settlement Body established a panel to examine the EU banana import regime in response to a request filed jointly by the United States, Ecuador, Guatemala, Honduras and Mexico. In May 1997 the panel found that the EU's banana regime violated WTO rules on 16 counts. The EU appealed 19 points in the panel report; all parties to the dispute and third parties (including Caribbean banana-exporting countries) took part in the appellate proceedings. On September 9, 1997, the Appellate Body issued its report, which rejected almost all of the EU arguments.

The EU measures found to be inconsistent with WTO rules include: (1) the EU's assignment of import licenses for Latin American bananas to French and British companies (whose previous business had been limited to the distribution of European, Caribbean and African bananas only), which took away a major part of the banana distribution business U.S. companies had developed over this century; (2) the EU's assignment of import licenses for Latin American bananas to European banana ripening firms (which historically did not import bananas), further taking away business from U.S. companies; (3) the EU's imposition of more burdensome licensing requirements on banana imports from the Latin American co-complainants than for other countries; and (4) the EU's discriminatory and trade-distorting allocation of access to its market for bananas, which departed from the fair-share standard of the WTO (focusing on past levels of trade).

The panel and the Appellate Body also affirmed that the EU's tariff preferences for Latin American bananas, which were provided to Caribbean countries, were consistent with the terms of a special WTO waiver the EU obtained regarding certain trade preferences for its former colonies. The United States did not challenge, and the WTO reports did not address, this zero-tariff preference for traditional Caribbean banana imports pre-dating the 1993 European regime. The panel and Appellate Body reports were adopted on September 25, 1997, and it was subsequently determined through arbitration that the EU would be given a period of roughly 15 months -- i.e., until January 1, 1999 -- to comply with the WTO rulings.

On July 28, 1998, the EU published changes to its banana regime that will take effect on January 1, 1999. These new regulations perpetuate the discriminatory aspects of the banana regime found by the WTO to violate EU WTO obligations

PRODUCT LIST

The imposition of increased duties would apply to articles that are both: (1) classified in the subheadings of the Harmonized Tariff Schedule of the United States (HTS) listed below; and (2) the product of Austria, Belgium, Finland, France, the Federal Republic of Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain, Sweden, or the United Kingdom. The product descriptions that are provided below are not intended to delimit in any way the scope of the products that would be subject to increased duties.

HTS Number Product Description

04069057 Pecorino cheese, from sheep's milk, in original loaves, not suitable for grating

19053000 Sweet biscuits; waffles and wafers

33073050 Bath preparations, other than bath salts

34060000 Candles, tapers and the like

39202000 Nonadhesive plates, sheets, film, foil and strip, noncellular, not

reinforced or combined with other materials, of polymers of propylene

42022215 Handbags, with or without shoulder straps or without handle, with

outer surface of sheeting of plastics

42023210 Articles of a kind normally carried in the pocket or handbag, with

outer surface of reinforced or laminated plastics

48055000 Uncoated felt paper and paperboard in rolls or sheets

48192000 Folding cartons, boxes and cases of noncorrugated paper or paperboard

49090040 Printed cards (except postcards) bearing personal greetings, messages

or announcements, with or without envelopes or trimmings

49119120 Lithographs on paper or paperboard, not over 0.51 mm in thickness, printed not over 20 years at time of importation

61101010 Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, wholly of cashmere

63022190 Bed linen, not knit or crochet, printed, of cotton, not containing any embroidery, lace, braid, edging, trimming, piping or applique work, not napped

85072080 Lead-acid storage batteries other than of a kind used for starting

piston engines or as the primary source of power for electric vehicles

85167100 Electrothermic coffee or tea makers, for domestic purposes

94051080 Chandeliers and other electric ceiling or wall lighting fittings

(other than used for public spaces), not of base metal

*USTR ON "U.S. RESPONSE TO EU BANANA IMPORT REGIME" (Issued December 21, 1998)

The Office of the U.S. Trade Representative (USTR) issued a statement titled "U.S. Response to EU Banana Import Regime" on December 21, 1998 in conjunction with the announcement of a list of European products subject to increased U.S. tariffs as a result of a dispute involving the European Union's banana policies.

U.S. RESPONSE TO EU BANANA IMPORT REGIME

The United States is exercising its rights under WTO procedures:

-- Under WTO procedures, the EU must come into compliance with WTO rulings by January 1. If it fails to do so, on January 21 the United States can submit to the WTO a request for authorization to suspend trade concessions that benefit the EU.

-- The January 21 U.S. request will specify the amount of concessions to be suspended and identify the products of the EU (except those of the Netherlands and Denmark) to be affected.

-- Under WTO rules, the U.S. request to suspend trade concessions must be granted by January 31, unless the EU claims that the amount of concessions to be suspended exceeds the amount of harm caused by its illegal measures. If it makes such a claim, the amount claimed will be submitted to binding arbitration, probably by the original panel that ruled against the EU banana regime. That arbitration must conclude by March 2.

-- On March 3 the U.S. can resubmit its request (adjusting the amount, if necessary, to be consistent with the results of the arbitration), and WTO rules require the WTO to grant the U.S. request in an amount consistent with the arbitrator's report.

This action comes after years of attempting to reach a negotiated solution:

-- The United States has sought a resolution to the dispute involving EU barriers to banana imports through diplomatic channels since 1992, and in 1996 it joined Ecuador, Guatemala, Honduras and Mexico in resorting to WTO dispute settlement proceedings after the EU had blocked two prior adverse GATT panel rulings against the same banana regime.

-- Following the WTO rulings against it in late 1997, the EU refused to consult with the United States or its Latin American co-complainants to reach a mutually acceptable solution. Instead, it adopted a regime rigged to perpetuate the illegal aspects of the prior regime. Then the EU unilaterally declared itself to be in compliance

-- During the past year, the United States has proposed to the EU a variety of ways the EU could implement a WTO-consistent banana regime. Such ideas include both tariff-only methods and tariff-rate quota approaches, which would include specific preferences for Caribbean countries.

-- The EU continues to reject any notion of a negotiated settlement, insisting instead that the only remedy available to the complaining parties is to go through the dispute settlement process all over again on the new EU bananas regime.

-- The United States is excluding the Netherlands and Denmark in recognition of their voting records against the adoption of the new EU banana regime.

The EU position undermines the viability of the WTO as a forum for resolving disputes:

-- Every other WTO Member that has lost a case in the WTO, including the United States in three cases, has either eliminated its measures altogether or changed its measures after consultation with the complaining parties. The EU is the first WTO Member to fail to do so.

-- The implications of the EU's actions go far beyond this dispute, threatening the effectiveness of the multilateral trading system as a whole.

*USTR ON "BRIEF HISTORY OF BANANA DISPUTE"

(Issued December 21, 1998) The Office of the U.S. Trade Representative (USTR) issued a document entitled "Brief History of Banana Dispute" on December 21, 1998 in conjuntion with the announcement of a list of European products subject to increased U.S. tariffs as a result of a dispute involving the European Union's banana policies.

Efforts to Litigate Dispute

1993

May 19 GATT panel finds against EC Member State restrictions ("Banana I").

EC blocks panel report from being adopted by GATT Council.

July 1 EC implements single market banana Regulation 404; claims it meets  GATT obligations.

1994

Jan 18 GATT panel finds against EC's new Regulation 404 ("Banana II").

Feb 7 EC blocks "Banana II" panel report from being adopted by GATT Council.

1995-96 New WTO dispute settlement provision prevents one member from blocking panel findings in 1995. In 1996, US, Guatemala, Honduras,Mexico and Ecuador (G-5) bring formal WTO case. EC repeatedly insists regime is fully WTO-consistent.

1997 May 22 WTO panel finds many WTO goods and services violations of EC regime ("Banana III").

July 11 EC appeals 19 findings in the WTO panel report.

Sept 9 WTO Appellate Body upholds panel findings of EC GATT and GATS violations.

Sept 25 WTO Dispute Settlement Body (DSB) adopts panel and Appellate Body reports. EC condemns WTO reports and ignores G-5 request for negotiations.

1998

Jan 8 WTO arbitrator gives EC until January 1, 1999 to comply with WTO rulings.

June 26 European Agriculture Council adopts modifications to banana measures and unilaterally declares them WTO-consistent.

Efforts to Negotiate Resolution

1992 US efforts to convince EC to adopt GATT-consistent regime rebuffed by EC.

1993 US efforts to convince EC to adopt GATT-consistent regulations rebuffed by EC.

1994 US suggestions on ways for EC to comply with GATT rulings rebuffed by EC.

1995 US efforts at compromises rebuffed by EC, which insists regime is WTO-consistent.

1996

Feb-Mar US, Ecuador, Guatemala, Honduras, Mexico (G-5) hold formal WTO

consultations with EC. EC insists regime is WTO-consistent and no changes possible.

Sept EC rebuff US efforts to discuss changes, stating no change possible during WTO case.

1997

May 28 President Clinton at Summit proposes work on solutions to EC, which says changes difficult.

June 20 USTR Barshefsky asks EC VP Brittan for staff consultations to discuss possible solutions.

July 23 US proposes possible solutions to EC, which says "too soon to discuss solutions."

Sept-Dec Following adoption of WTO reports, Barshefsky writes Brittan seeking staff discussions; Brittan says "too soon." Barshefsky writes Brittan seeking EC flexibility on new regime; no EC response.

1998

Feb 5 EC rebuffs G-6 (G-5 plus Panama) concerns at WTO about draft EC banana plan.

Feb 12 EC rebuffs US detailed legal concerns about a new banana plan in    Brussels consultations.

Mar 25 G-6 at DSB meeting summarize WTO violations of EC plan and call for negotiations. EC complains G-6 statement is premature and ignores call for negotiations.

May Scher seeks changes to EC plan in letter to EC DG LeGras, who sees "no prospect."

May 18 Barshefsky at Summit urges negotiations to Brittan, who insists regime is WTO-consistent.

May 20 US requests changes to EC plan at talks in Geneva; EC says no substantive changes20possible.

June 19 Barshefsky and USDA Glickman write EC Member States to oppose proposed plan.

June 26 European Agriculture Council adopts Commission proposed banana plan.

Efforts to Reconvene WTO Panel

July 7 Barshefsky asks Brittan to reconvene WTO panel on expedited basis. July 23 G-6 in DSB ask EC if it would accept WTO panel; EC replies "no

instructions."July 30 Brittan replies to Barshefsky that the EC sees "no reason" to reconvene panel.

Sept 25 G-6 in DSB ask EC to accept WTO panel. EC insists on separate goods and services cases, rejects US compromise to set up panel on November 6 and threatens to block DSB meeting. Oct 21 G-6 regret in DSB that EC unwilling to accept WTO panel. EC does not accept panel.

Nov. US proposes to EC reconvening WTO panel but EC insists US waive WTO rights, accept reinterpretation of DSU and abandon G-5, for an uncertain process lasting at least 6 months.

*U.S. PRESSES EU ON BROADER STANDARDS FOR WIRELESS TECHNOLOGY

(Seeks "fair opportunity" to compete in Europe)

Washington -- The United States has called on the European Commission to permit greater market access to American companies that deal in third generation (3G) wireless technology and wireless services. The request was made in a December 22 letter signed by Secretary of State Madeleine Albright, U.S. Trade Representative Charlene Barshefsky, Commerce Secretary William Daley, and Chairman of the Federal Communications Commission William Kennard.

Following is the text of the press release issued by the USTR:

December 22, 1998

United States Presses Europe To Adopt Fair Standards For Wireless Communications

The United States today called on the European Commission to allow U.S. third generation (3G) wireless equipment and service providers a fair opportunity to compete in Europe. In a letter to EC Commissioner Martin Bangemann signed by Secretary of State Madeleine Albright, United States Trade Representative Charlene Barshefsky, Secretary of Commerce William Daley, and Federal Communications Commission Chairman William Kennard, the United States expressed concern over developments in Europe that appear to promote a particular European-developed 3G standard to the exclusion of other technologies. These developments seem incompatible with the ongoing industry-led efforts, within the International Telecommunication Union (ITU), to achieve a global consensus that would harmonize 3G standards to the fullest extent possible.

"This is a question of basic fairness in telecommunications trade. The United States market is open to the 3G standard proposed by Europe. We expect access in Europe for technologies used by our industry as well," said United States Trade Representative Charlene Barshefsky. "We are monitoring the implementation of 3G measures by the European Union and Member States for compliance with the EU's overall WTO telecommunications obligations. We are seeking specific assurances from European governments that U.S. industry will be able to deploy competing 3G technologies and services in Europe at the same time that European-sponsored 3G technologies and services are deployed."

"U.S. industry is concerned that industrial policy considerations are driving a European effort to gain a first-to-market advantage for a unique European technological specification, by rushing it through official standardization and service licensing processes," said Commerce Secretary William Daley. "We believe European governments instead should allow the effort to develop 3G systems, led by the ITU, to bring about market-driven rather than government-driven decisions, including the approval of converged or multiple standards, as deemed appropriate by ITU participants."

Chairman Kennard added, "I am concerned that Europe may be effectively bypassing the ITU consensus process by prematurely adopting a particular standard without regard to the market-based needs of service providers in other countries, including the United States. The recently adopted decision of the European Commission, which appears to prohibit the operation within Europe of any third generation standard except that adopted by the European Telecommunications Standards Institute (ETSI), would preclude marketplace consideration of rival standards and restrict consumer choice.

The ITU has set a March 31, 1999, deadline for deciding on key characteristics for 3G standardization, as it seeks to develop final recommendations on 3G issues by December 31, 1999. However, some European countries are poised to auction radio spectrum for 3G services in 1999, without allowing sufficient time for commercial operators to take advantage of the ITU's 3G decision. The early auctions could effectively preclude any technology but the European-sponsored 3G standard from arriving first on European markets.