The Americans are still our friends

by Prof. Roland Berger

When Angela Merkel travels to the US at the end of September, she will speak about the economic effects of climate change and the necessity of reworking the Kyoto protocol. But her trip will also seek to build up transatlantic relations to a transatlantic partnership.

Besides their long friendship, the US and the EU are connected by a dense network of consulting and cooperation mechanisms, which include regular summit meetings. In addition, both regions are facing a common challenge: they must confront the growing economic power of countries such as China, India and Russia.

The US is the undisputed number one trading partner of the EU. Every day, EUR 1 billion worth of goods cross the Atlantic. The regions do nearly 20% of their trade with each other. In 2006, the US imported EUR 268.9 billion worth of goods from the EU 27; US exports to the EU amounted to EUR 177.7 billion. This transatlantic trade makes up a third of global trade volume and nearly half of the global trade in services. The partners have invested EUR 1.5 trillion and created 12 million jobs on both sides of the Atlantic.

Already at the EU/USA summit at the end of April, it was decided to create a joint economic council which would coordinate economic integration at the highest level. This council will be chaired by Günter Verheugen and Allan Hubbard, who works in the Executive Office of the US president. Under their guidance, the council will try to reduce the number of regulations and better harmonize the rest. It will also prepare bilateral meetings and convene before the end of the year.

In some respects, America is still the model for the European economy. That's why Michael Glos (Germany's Minister for Economics) recently advocated a registry for major acquisitions, as is the norm in the USA. The Federation of German Industries is lobbying for the US model regarding foreign direct investment: In this model, a government agency checks to see if foreign investment endangers national security, and makes its recommendation to the President accordingly.

However, the US can also learn from the EU. The EU has placed special emphasis on environmental technology. With its diversity of peoples, the EU is a role model for cultural tolerance. According to a Roland Berger study, American managers also look to their European counterparts for examples of corporate social responsibility.

Europe and the US are stronger together. They can and should learn and benefit from each other through even closer cooperation.

(This column was published in "Rheinischer Merkur" on September 13, 2007)