Ambassador of the European Commission Delegation to the U.S. G¸nter Burghardt EU Expansion Ushers In New Europe by Larry Luxner When it comes to upcoming anniversaries and commemorations, G¸nter Burghardt certainly has a full plate. For starters, this month marks the 50th anniversary of the European Commission office in Washington. On June 6, millions of people on both sides of the Atlantic will observe the 60th anniversary of D-Day during World War II. And on June 25, President Bush will head to Ireland for a two-day U.S.-European Union summit meeting. But all of these pale in comparison to May 1, when 10 nations join the European Union as full-fledged members. These include eight Central and Eastern European countries (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia) and two Mediterranean island states (Cyprus and Malta). The May 1 expansion from 15 to 25 members boosts the EUís population by more than 80 million people (from 370 million to more than 450 million), doubles its territory to 2.5 million square miles, and nearly doubles the number of its official languages from 11 to 20. By comparison, the United States h as 290 million inhabitants with a territory of 3.7 million square miles and English as its common if not official language. ìThe enlargement of the EU and the completion of negotiations on a constitutional treaty represent both a widening and a deepening of the European integration process, which started more than 50 years ago,î Burghardt told The Washington Diplomat. ìSome people in Europe believe we are too absorbed with our own enlargement and constitutional treaty, and not reaching out to the challenges of integration. But thatís not true. If weíre doing what weíre doing, itís not just for our own internal objectives, but to make Europe a more efficient and capable partner in the fight against terrorism, infectious diseases and other challenges like Afghanistan, Iraq and the Balkans.î As ambassador of the Delegation of the European Commission to the United States, Burghardt is, in effect, the EUís top diplomat in Washington. Burghardt arrived here in January 2000, following a 30-year career with the European Commission. Before his present appointment, he served as director-general for external relations under Commissioner Chris Patten. The 60-year-old diplomat, who has also held a series of other important posts within the EC bureaucracy in Brussels, speaks fluent German, French, English, Dutch and Italian. ìWhen Iím asked where I come from, I say Iím a European from the European Union,î says Burghardt, explaining that his ancestors came from Western Germany but emigrated to Poland at the end of the 18th century. He grew up in Hamburg and met his Belgian wife, Rita, at Cambridge University in England. The couple have three children: one son in London, another in Brussels, and a daughter in Washington. According to Burghardt, the first official European presence was established here in 1954, through an arrangement with local law firm Cleary Gottlieb. The office was largely the result of efforts by Jean Monnet, president of the six-nation European Coal and Steel Community and one of the ìfounding fathersî of a united Europe, along with George Ball, Monnetís main American adviser on U.S.-European relations. In 1972, the Nixon administration granted full diplomatic status to the European Community following a law passed by Congress. ìThis was necessary because, although the EUóas it is called nowóis based on the principle of sovereignty, we are not directly under the protection of the Geneva Convention because that convention only counts nation-states,î Burghardt explains. ìThis is why the U.S. passed a law to extend to the European Community treatment as a nation-state under the convention. It was the first country to do so.î A second important milestone was achieved in 1990, when European Commission ambassadors began presenting their credentials to the president, rather than to the secretary of state. ìNow, we are a full-fledged diplomatic mission,î says Burghardt, noting that his office at 2300 M St., NW, employs 80 people and has a budget of around $15.5 million (12 million euros). It is also the biggest of any of the EUís 130 missions around the world. Among other things, the EUís Washington office supports 15 academic centers around the country, including one in the District of Columbia that serves five major area universities: American, George Washington, Georgetown, George Mason and Johns Hopkins. ìWe believe the trans-Atlantic relationship we have with the United States is strategically the most important bilateral relationship we have,î Burghardt says. ìWe like to believe that this is seen the same way from the American side.î Looking at the numbers, itís hard to see how anyone could disagree. The combined gross domestic product of the EU and the United States (about $10 trillion each) is around 60 percent of the worldís total GDP, even though the combined EU-U.S. population is only 10 percent of the worldís total. Together, the two entities command 40 percent of world commerce, and they trade about $3 billion worth of business every day in goods, services and foreign direct investment. Even more important are their cumulative mutual investment stakes in each otherís economies. In 2000, Europeís investment holdings in the United States represented 75 percent of all European investment abroad and roughly 60 percent of all foreign direct investment in the United States. Meanwhile, the U.S. investment stake in Europe has grown to roughly half of all U.S. investment abroad. Given such a huge trading volume, itís normal that disputes will crop up from time to time. ìWhen problems arise, we litigate before the World Trade Organization, and the WTO comes up with a ruling and we then have to comply,î Burghardt says. ìIn a way, the WTO is a blessing for us, because imagine a situation where the two elephants of the worldís economic circus have a dispute and thereís no referee. The WTO provides us with rules of the game.î Some of the most serious of these issues involve foreign sales corporations (FSCs). Another is Section 211, an arcane U.S. law dealing with trademark protection that is opposed by the Europeans. Other disputes have involved bananas, rum and anti-dumping. In late March, the EUófollowing a six-year investigationófined Microsoft Corp. nearly $613 million (497.3 million euros) for violating European anti-trust laws. It also ruled that Microsoft would have to unbundle Media Player from Windowsósparking an angry outburst from Senate Majority Leader Bill Frist (R-Tenn.), who warned that the United States and the EU were heading toward a new trade war. ìIn imposing this anti-consumer, anti-innovation penalty, the commission has blatantly undercut the settlement that was so carefully and painstakingly crafted with Microsoft by the U.S. Department of Justice and several state anti-trust authorities,î Frist wrote. ìThe commissionís complete indifference to the negative impact of its ruling on American jobs, American consumers and the U.S. economy, and its total disregard of the Department of Justice, are intolerable.î The EU ruling, which Microsoft plans to appeal, says the U.S. software giant broke EU law by abusing its ìnear monopolyî market power in the workgroup server and media player markets. The EU gave Microsoft 90 days to create a version of the Windows PC operating system that does not have the Media Player included and offer that to rival computer makers. The company also must create ìcomplete and accurate documentationî within 120 days that will allow other companiesí workgroup servers to be completely interoperable with Windows. This isnít the first time that Washington and Brussels have clashed over anti-trust enforcement. Not long ago, hostilities erupted after the EU vetoed a proposed merger between General Electric Co. and Honeywell International Inc., which U.S. regulators had already approved. President Bush publicly criticized the EU veto, widely viewed as a protectionist move aimed at helping European rivals, such as Airbus and Lufthansa, at the expense of U.S. companies. ìWe have made a lot of progress on the one hand, but we have not yet been able to harmonize our rules to a degree that would guarantee that the outcome on both sides of the Atlantic is identical,î says Burghardt. ìThere were two important aspects to the Microsoft case. On interoperability, our authorities came to similar conclusions, but we diverged on the bundling issue.î In all, he says, only two out of 510 anti-trust cases involving U.S. companies have resulted in negative rulings: GE-Honeywell and Microsoft. ìAll th ose trade disputes together do not represent more than 2 percent of our overall trade volume, but they represent almost 100 percent of the public interest in trade relations. So we have to show we are able to manage this important trade relationship.î On the positive side, the United States and the EU are negotiating a trans-Atlantic aviation accordóalso known as an ìopen skiesî agreementówhich would allow airlines to operate as many flights across the Atlantic as they wish, without restrictions. Burghardt says that despite U.S. fears that the creation of the EU Single Market in 1992 would lead to some kind of ìfortress Europe,î the EU is now one of the most open trade areas in the world. ìThere are no more internal borders between the member states, and goods imported into the EU at a customs office of any of the member states will be able to circulate freely throughout 25 countries. Equally, companies producing in any of the new member states can serve customers in the entire EU without any impediments. The extension to the new member states of the EUís external tariff alone will lead to a decrease of their current average tariff from 9 percent to 4 percent. In most cases, U.S. exporters will consequently enjoy lower tariff in their trade with the new member states.î Burghardt says the European unification process has had positive political implications as well. ìWe have a European Parliament, a European Council, a Court of Justice and other institutions which make the EU a quite distinct political animal,î he says. ìPart of the problem we have in the EU is that many Americans know what NATO is, and they see the integration of Europe as a kind of [North American Free Trade Agreement]. So our biggest job is to explain that the EU is more than a common market. It aims more toward European political union.î He cautions, however, that ìwe are not aiming to replace Europeís nations with a United States of Europe. What weíre doing is reducing a little national sovereignty and creating a federal entity with its own institutions that bind Europeís nations together, while allowing them to continue with their own individual identities.î The prospect of EU accession for Cyprus and eventually Turkey is also contributing significantly to the easing and possible resolution of disputes in the Eastern Mediterranean, a longstanding security concern for both Europe and the United States. ìWe have indeed seen very hopeful progress recently in Cyprus, bringing the possibility of a negotiated solution to a situation that since 1974 has often seemed intractable,î Burghardt says, referring to the long-standing ìCyprus problemî between the Greek-speaking Republic of Cyprus, which is internationally recognized, and the self-styled Turkish Republic of Northern Cyprus, which is recognized only by Turkey. On June 6, U.S. and European leaders will gather on the beaches of France to mark the 60th anniversary of D-Day, the Allied invasion in 1944 that marked a turning point in the war against Nazi Germany. ìIn my view, nothing could better illustrate the geopolitical changes in Europe than the fact that 60 years ago, so many American lives had to be sacrificedóand now, Europeans have taken over the job by themselves, creating peace, prosperity and stability through their own means,î Burghardt says. Yet that doesnít mean Europeans approve of the current U.S. military operation in Iraq. ìThe war bore very heavily on our relationship,î concedes Burghardt. ìThere was not one country in Europe where the majority of people felt it was necessary to go to war. This is why in Spain the government was toppled. As the elections showed, the previous Spanish government [led by JosÈ MarÌa Aznar] did not represent the view of the majority population. We now know there was no imminent threat originating from weapons of mass destruction.î He adds that the Madrid rail bombings, which killed 190 people on March 11, were ìhorribleî and marked the first time terrorism had struck Europe so deeply. ìIt reminds us that we have to share the American resolve against terrorism,î Burghardt says. ìThe United States undoubtedly has the worldís most capable and powerful military, while the EU represents the worldís most important peace process. Letís combine our capacities in order to fight terrorism.î One area where Washington and Brussels disagree is on their differing approach to the Fidel Castro regime in Cuba. ìWe have the same objective [as the United States]. We all want this country to return to democracy. We do not diverge at all on the objective, but Cuba is one of those cases where we work with different tool boxes,î Burghardt says. ìOur approach to Eastern Europe was to reach out to them, to bring changes there by attracting the people to our system, by increasing contacts and communication. This is how we eventually won the Cold War. Applied to a situation like Cuba, the European position has always been not to rely on isolation and sanctions, but rather to reach out to the population.î The two also donít see eye to eye when it comes to the Middle East. The Bush administration is a staunch supporter of Israel, while the EU has always been seen as having a more even-handed approach regarding the Arab-Israeli conflict. ìWe believe you need vision, but you also need a lot of patience, and you need to reach out to the people and make sure the requests of their expectations are coming from themóand is not perceived as being imposed on them,î says Burghardt. ìIsrael and the Palestinian territories are included in our multilateral approach. Weíve offered all these countries free trade agreements. Weíve spent a lot of money on thisóover 3 billion euros a year in grants and loans in order to help those countries develop their economies.î The EU already faces a considerable financial burden because it has to absorb the 10 new member states, which on average are much poorer than the existing members. Overall, the 10 new members represent around 20 percent of the total population of the 25 EU member countries but constitute only 5 percent of its combined GDP. ìWith enlargement, the gap in income distribution within the EU-25 will rise by about 20 percent, twice as much as the increase when the EU took in Greece, Spain and Portugal in the 1980s,î Burghardt explains. ìMuch work has been done to prepare the new members for accessionóthe EU has already spent the current dollar-value equivalent of two Marshall Plans on the accession process, with more funding planned to assist new members to improve their infrastructure and administrative capacities.î Burghardt, who has visited each of the 10 new member states, says the EU will likely expand further in 2007 with the entry of Bulgaria and Romania. That will present even greater challenges for Brussels, particularly in the area of agriculture. The 10 new members joining the EU in May have among them 4 million farms, compared to nearly 7 million among the previous 15 member states, which adds up to a total of 11 million farms. By comparison, the United States has just more than 2 million farms. An EU of 27 members including Romania and Bulgaria adds another 5 million, for a total of about 16 million farms. Similarly, the number of people working in the agricultural sector will grow considerablyófrom 4 percent of the total working population with 15 member countries, to 5.1 percent with 25 members, and 7.5 percent with 27 members. In the United States, by comparison, only 2 percent of inhabitants work in the farming sector. This ye ar, the European Commission will also make a recommendation to the European Council on Turkeyóassessing whether that nation of 67 million people, 99 percent of them Muslim, has made sufficient reforms to allow negotiations on EU accession to start some time next year. ìTo understand the challenge that Turkish membership in the EU presents for us, consider what would happen if the U.S. took in Mexico,î Burghardt says. ìMexico would have a congressional delegation three times the size of Californiaís because of its population. Yet Mexicoís economy is a fraction of that of the United States. The issue is how many countries can join the EU without the EU losing its own identity. We have to make up our mind whether we can swallow such a big part of the cake.î Larry Luxner is a contributing writer for The Washington Diplomat.