Euro-American market convergence, but how?

William D. Wiegand

September 2007

 

††††††††††?In order for the Grand Alliance to be successful, Europe and America must come together so as to create a force that would be strong enough to react to Chinaís growing economic power.?This would best be done through the union of the American and European markets, effectively fusing the economies, as well as the international interests, of the two regions. ?/span>In fact, such a union is one of the most direct and immediate goals of The Grand Alliance (Pelanda, 2007) and is essential to its ultimate goal of a prosperous global economy. ?/span>Such an objective, however, leaves many questions to be answered, but none as important as ďHow do we go about uniting the American and European markets and what exactly do we need to do to ensure its success and stability??span style='mso-spacerun:yes'>?The answer to this question can best be found by using the formation of the European Union as a template and adapting it for trans-Atlantic convergence.?This would provide, at the very least, a framework that has proven to be successful in recent history.?Since Euro-American convergence is a different situation, however, there may need to be alterations to some unification procedures.? Nevertheless, Euro-American unification would be wise to follow in the example of European convergence.

††††††††††??/span>The primary goal of the European Union was to form a strong, single market in Europe.?Ideally, this single market is represented by the four fundamental freedoms of movement for goods, people, capital, and services throughout the member states.? These freedoms are institutionalized through norms that require member states to formally guarantee them, to remove restrictions on them, and to amend laws that may indirectly constitute barriers to them (Bartolini, 2005).?These freedoms, too, should be the ideal for a Euro-American union and can be achieved through several agreements between the European Union and the United States, illustrated in three major steps which will be the cornerstones of the integration process.?First, there must be formed a transnational space for transactions in which the supply and demands of the Euro-American economic states can operate without interference, such as customs, exchanges, or any other discriminatory factor.?Second, this transnational space must have uniform legal foundations for economic interactions so that all member states can be held to the same legal responsibilities throughout the community.? It also shows that there will be a uniform interpretation of community laws and it establishes community equality and stability.?Finally, the last step should be monetary integration and centralized administration of a single currency, an act that quite literally binds the European and American economies.?These steps would lead to a single Western economy that would be well on its way to limit Chinaís growing global dominance.

††††††††††?The first step can be achieved through a series of negotiations paralleling those previously put into effect through the creation of the European Union.?First of all, it must be established that trade between the United States and European countries be free.?In 1968 the European Economic Community eliminated all quotas and tariffs from trade on goods within the Community, but this agreement was not complete because there were still differences in national procedures which made it impossible to market the same product throughout all of Europe (Meeusen, 2002).?Therefore, not only must Euro-American convergence create a customs union by eliminating internal tariffs and establishing a common external tariff, but it must also have common policies on product regulation, allowing for the free movement of production and enterprise.?This guarantees to Euro-American companies the ability to establish themselves in other nations within the community.?It also grants them the ability to provide services within other states than the one where they are established.?Additionally, it would be wise to follow the European proposal that all import duties should be paid into the community budget (Blair, 1999).? This would increase the power of the newly formed Euro-American alliance and the revenue would be distributed so as to provide for the continued prosperity of the single market.?From an American standpoint, convergence can be seen as a great advantage to the current economic situation.?Economics is at the heart of the American mentality and such advances would sit well with the eagerly entrepreneurial American motivation.?Companies that wish to provide services internationally would have considerably less hurdles to jump in order to achieve their goal.?A common market also provides a larger and more diverse consumer base, which facilitates the growth of small companies that focus on a non-mainstream niche, as well as the growth of large corporations that cater to the general public.?Nevertheless, there are still some drawbacks to market unification.?For example, a single market within developed nations creates increased international competition and can have a short-term negative impact on certain sectors of the national economy (Bratton, 1996).? Ventures that receive national subsidies, such as those currently supporting agriculture through farms and crop control, may struggle to survive against its transnational competitors.? Nevertheless, the United States, as a model of democracy and a free market economy, would embrace increased international competition, making sure to at least stay as economically aggressive as its European peers.?Overall, I feel that there are far more benefits to convergence than drawbacks and that, if shown these benefits, other Americans will agree that Euro-American convergence is in their best interest.

††††††††††?One aspect of the single market is the establishment of a harmonized external tariff.?This means that member countries will have to participate as a sole unit in international trade negotiations. Trade with external countries will therefore become one of the first tools of Euro-American integration requiring member states to issue sovereignty as a single being.?Considering that economic stability is essential and that it will be imperative for the Euro-American countries to interact with outside nations, several important organizations and groups will have to be established to cope with these needs.?One such organization is based on the European Commission (EC).?This group puts together the budget for the European Union and directs its uses (Liebscher, 2006).?Clearly, the United States will want to be an active participant in overseeing how revenues from import taxes are allocated and spent in order to ensure that American interests are preserved.?Additionally, the European Commission is the chief agent in trade negotiations between the European Union and non-union nations.?Since this organization plays such a vital role in the global community and the United States sees itself as such a strong player in this community, the U.S. will be sure to seek more than just mere representation, but also seek a leadership role within the group.?

Another group that is fundamental to the proper functioning of the European Union, and will have to be adapted for the inclusion of the United States, is the European Parliament.?This legislative body manages and approves the budget proposed by the European Commission, appoints the President of the European Commission, and directs the initiatives of the European Commission (Blair).?Due to its control in not only electing who directs the community budget, but also in its expressed interest in the sustainability of the community as a whole and each of its parts, this is an extremely important organization for the United States to be an active member.

An additional organization that would help to govern the Euro-American alliance while ensuring economic unity would be a Euro-American Court of Justice.?This court would interpret treaties and provide a uniform interpretation of community law.?The establishment and effective use of this court would show that community law has become a reality, which is important to the free movement of goods and the removal of barriers protecting national markets.?It would enforce market adherence and thereby uphold the fundamental principles of the single market.?For example, it would ensure that it is possible for all community consumers to purchase in their own country any food product manufactured in another community country.?It would also uphold that in regard to areas such as production, marketing, and shipping that each state within the community has to recognize each others?national rules and regulations.?To avoid having to adopt excessive new legislation, the committee states must simply agree to give each others?laws and technical standards the same validity as their own.?This court, therefore, is essential to the maintenance of a unified market.?Another court, the Court of Auditors, would also need to be adapted to incorporate the United States.?This court would certify that accounting principles are adhered to within the Euro-American community.?It would also reassure the public that community money is spent responsibly.?Clearly, the United States will desire adequate involvement so as to ensure its money is wisely spent and that its funds are properly documented.?These two courts will do well to monitor the efficiency of the single market and see that its principles are actively in effect.

The interests of corporations are at the heart of the American economy.?Therefore, U.S. based companies and unions must be represented in the Economic and Social Committee.?Its aim would be to involve economic and social interest groups in the development of the unified market and serve as an organization that exemplifies the economic goals of its member states (Leisink, 2007).?It is currently established in the European Union but will also be needed in a Euro-American alliance in order for U.S. established companies to remain strong and to benefit the local economy by expressing their regional needs and interests.?

Another issue that needs resolving is that of transportation barriers.?Europe and America do not share any borders and therefore will not have to implement any infrastructure reconfiguration in order to facilitate the movement of people, goods, services, and capital.†† Instead, the only major modifications that will have to be made are within seaports and airports.?In the wake of the 11 September 2001 terrorist attacks, however, America may be reluctant to make transportation into its territory a relatively simple process.?From an American perspective, I even see this as a potential security issue for the United States.?This is an issue that will surely not be transient, but rather one that the people of my generation, the generation that will soon be the leaders of America, will recall as defining our adolescence.? I think that before the United States will be willing to relax seaport and airport regulations within a Euro-American alliance, the U.S. must be sure that regulations on travelers and immigrants into the rest of the community are just as stringent as its own regulations on these groups.?Therefore, a possible solution would be to increase port security throughout the European Union and relax Americaís fear of a similar attack.?

The European Unionís Committee of the Regions is the final major political organization that would have to be adapted to incorporate American interests.?This committee represents local and regional authorities and most closely reflects the interests of the people.?It has previously dealt with drought problems in Southern Europe and could potentially be useful in America to areas that continually face economic misfortunes such as natural disasters.?For example, this committee would benefit areas like New Orleans in the aftermath of Hurricane Katrina.? Such a committee would substantially help reconstruction and economic growth, in turn aiding the Euro-American economy through the rehabilitation of a major port city. ?/span>The United States would definitely want adequate representation in the committee so as to secure funds that would aid the prosperity of the nation.

Overall, I feel that the political aspect of Euro-American convergence is possible, but that the United States will want more control of many organizations as a condition of integration.?The U.S. has historically been a leader in the international community and it will be difficult to convince Americans that their power is slipping so much that they deserve a secondary role to their European peers.?America will have to be taken seriously and their interests legitimately considered if successful and sustainable convergence is to occur.

The final act in Euro-American convergence is the monetary integration and centralized administration of a single currency.? This step is last because it is not crucial to the functioning of a single market, but it would still be important for complete convergence.?The creation of a Euro-American Investment Bank would be an incredible boon to the Euro-American economy.?The bank would raise funds on the capital markets to finance investments that aid in the growth of the community (Dyson, 2002).?Its main goal would be to improve energy transfer, telecommunications, and transportation, all of which facilitate advances in business and negotiations.?Thus, the Investment Bank supports the foundations of the single market from a monetary, rather than a political, perspective.?Another organization that would support the administration of a single currency is a Monetary Institute whose focus is to coordinate national monetary policy and monitor progress toward convergence.?This organization would prepare Euro-American states to lock in exchange rates and anchor their currencies in order to minimize rate fluctuations and lower inflation rates.?Finally, the development of a Central Bank would gradually introduce and regulate a single currency throughout the community, finalizing convergence.?

By and large, Euro-American convergence will not be a simple process.?Instead, it will take much time to complete and will have to be an intricate and detailed procedure to ensure that it is done correctly.?Although current American independence and power supports the idea that such a convergence is not probable, it is nevertheless possible if America realizes that its international influence is diminishing.? If and when the Western hemisphere is ready for a Euro-American community, the regions will have to unify their economies, establish political and legislative bodies to uphold the unification, and then enforce monetary integration.?With an outline for Euro-American convergence, the Grand Alliance takes a step closer to realizing its aim of a successful and prosperous global market not free of Chinese control.

Works Cited

 

Bartolini, Stefano.?Restructuring Europe.?New York:?Oxford University Press.?2005.

 

Blair, Alasdair.?The European Union since 1945.?New York:?Addison Wesley Longman.?1999.

 

Bratton, William.?International Regulatory Competition and Coordination.?New York:?Oxford University Press.?1996.

 

Dyson, Kenneth.?European States and the Euro.?New York:?Oxford University Press.?2002.

 

Leisink, Peter, Bram Steijn and Ulke Veersma.?Industrial Relations in the New Europe.?Northhampton, MA:?Edward Elgar Publishing Limited.?2007.

 

Liebscher, Klaus, et al.?Financial Development, Integration and Stability.?Northhampton, MA:?Edward Elgar Publishing Limited.?2006.

 

Meeusen, Wim and Jose Villaverde.? Convergence Issues in the European Union.?Northhampton, MA:?Edward Elgar Publishing Limited.?2002.

 

Pelanda, Carlo.?The Grand Alliance.? Milano:?FrancoAngeli s.r.l.?2007.