Address to the EU Committee Meeting
of the
United States Council for International Business

Ambassador John Bruton
Head of the Delegation of the
European Commission to the United States

7th March 2005, 1 pm

It is commonplace to say that the United States and the European Union countries have the most intense economic relationship in the World. Our trade is $1 trillion a year and mutual investment is even more important. US firms make a lot of their profit in Europe, and European firms make a lot of their profits in the United States.

Is all of this just the fruit of technology and opportunity, or is there some deeper reason for it? Is good finance the driver, or is the good finance the result of something else?

I believe there is something else involved – two in fact.

Politics and Shared Values

First Politics: Europe is an attractive place for US companies to invest because of political decisions taken over the last fifty years. If, fifty years ago, Western European politicians had turned their back on the dream of creating a European Political and Economic Union and had insisted instead that national states retain complete discretion to individually set their own tariffs and investment rules and consumer standards, we would never have had the single European Common Market of 450 million people we have today. No, we would have had twenty-five different markets, with twenty-five different sets of tariffs, of investment rules and of consumer standards.

With twenty-five different sets of hurdles to cross, American firms would not have bothered selling as much to Europe or investing as much in Europe. Europeans would have been poorer too, because they would have been selling less to one another, and they would have had less disposable funds to invest in the United States.

Without what many considered at the time to be the naïve and idealistic dream of European leaders meeting in Messina in 1955 of creating a European Political and Economic Union, both America and Europe would be poorer than they are today. Europeans a lot poorer, Americans not a little poorer.

And a poor and divided Europe would not have been as comparatively peaceful a place as it has been. In the absence of the visible prosperity of Western Europe for which the existence of the European Union is largely responsible, perhaps the East Germans would not have had to put up their wall to keep their people in. If they could not see on television and by sight the freedom and prosperity of EU States just over their borders, perhaps Central and Eastern Europeans might not have risen up so soon. Without the existence of the EU, Communism might have survived longer because its inferior economic efficiency would not have become obvious so soon.

Of course this is not the whole story. Without America’s support and encouragement, the space would not have existed for the creation of any European Union. Without America’s military commitment, Communism might still rule in large parts of Europe. This is not just a European story, it is an American story, a story we have in common – a common political achievement.

That is why I say that politics is at the source of the Euro-American economic success story.

Shared Values are also at the source of that Euro-American economic success story. And to see that we must go back more than a mere fifty years.

In business terms, the most relevant value that Europeans and Americas have created together is the importance we both place on the rule of law. By this I mean the idea that business and other disputes can in the last resort be settled in court, on the basis of predictable rules, that that court will decide cases independently of the views of the executive power of the state, and that it will not be corrupted by bribery or prejudice.

Without the rule of law, there could be no such thing as private property or as enforceable contracts. Short-term business returns are no use, unless you can rely on the durability of private property and the enforceability of contracts.

The European and American political tradition, going back to the eighteenth century and beyond, has nourished and developed this concept of the rule of law. We have underpinned the rule of law in our national constitutions. It has become part of our culture, part of the assumption we make about our daily lives. The rule of law is second nature to us.

And the rule of law is at the heart of the 38,000 pages of legislation that any state must adopt, if it is to aspire to European Union membership.

This is why the EU/US relationship is so precious. It is precious because it is built on deeply embedded shared assumptions like the rule of law, deeply embedded shared assumptions of which the close economic relationship is just one visible expression.

Of course we will have arguments. Arguments about issues like Iraq. But these arguments take place within the United States, too. And they are arguments coming from an assumption that these are shared values. Indeed if there were no shared values to appeal to, why would one bother having an argument at all?

I have heard the view advanced that values in EU and in US values are diverging. That Europe is secular, while America is religious. That Europe relies on soft power, while America relies on hard power. That Europe emphasizes the responsibility of the state to provide social and health security, while America stresses individual and personal responsibility. That, in general, Europe emphasizes stability, while America stresses freedom.

Every one of these differences does exist. They are not the invention of some fevered intellectual. But they are differences of emphasis, not differences of fundament.

There are many deeply religious people in Europe, and European secularism is no more than a reaction against excesses from which Americans escaped in the eighteenth century.

Europe does emphasise soft power because its experience of the exercise of its military power has not always been happy, but there are many Americans who have similar hesitations.

In general European countries do have a more developed welfare state, but these welfare states exist by the decision of individual countries. They are not imposed by the European Union. And America, through its social security, Medicare and Medicaid systems, also has a substantial welfare state. Indeed, Europeans and Americans share a common sense that care for the weakest is a hallmark of civilization.

The age of the average European is slightly higher than the age of the average American, and as people get older they stress stability a bit more and freedom a bit less. But Europe’s young people have freedoms today that earlier generations could only have dreamed of. They are free to live and work and go about their business anywhere in twenty-five countries. They are free to say what they like, and their rights are protected by both their own national constitutions and by European Human Rights Institutions. But freedom has many definitions.

As Abraham Lincoln said in Baltimore many years ago:

“We all declare for liberty, but in using the same word we do not mean the same thing. With some the word “liberty,” means for each man to do as he pleases with himself and the product of his labour; while with others the same word may mean for some men to do as they please with other men and with the product of other men’s labour.”

This is a discussion that will go on forever, as long as politics and democracy exists. We, who enjoy relative freedom, must constantly try to see things from the perspective of those who are less fortunate than us.

We must be generous, while protecting fiercely the free institution that we, Europeans and Americans together, have developed so painfully over the past three hundred years.