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ASSIGNMENT SOLUTIONS GUIDE (2014-2015)

M.P.S.E.-11
The European Union in World Affaris
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information, data and solution. Student should must read and refer the official study material provided by the university.
SECTION I
Q. 1. Describe the main characteristics of treaties of Amsterdam and Nice. What role have these played in the
formation of the European Union?
Ans. The Amsterdam Treaty: Enlargement towards the East plus several pending issues on the EU agenda prompted
the negotiation of the Treaty of Amsterdam just four years after the conclusion of the Treaty of Maastricht. Negotiations,
however, took place in a much less optimistic climate. The Treaty of Amsterdam opened the way towards reinforced or
closer cooperation but it failed to resolve institutional issues created by the forthcoming enlargement. It was signed on 2
October 1997 and came into force on 1 May 1999.
The Amsterdam Treaty meant a greater emphasis on citizenship and the rights of individuals, an attempt to achieve
more democracy in the shape of increased powers for the European Parliament, a new title on employment, a Community
area of freedom, security and justice, the beginnings of a common foreign and security policy (CFSP) and the reform of
the institutions in the run-up to enlargement.
Amsterdam comprises 13 Protocols, 51 Declarations adopted by the Conference and 8 Declarations by Member
States plus amendments to the existing Treaties set out in 15 Articles. Article 1 (containing 16 paragraphs) amends the
general provisions of the Treaty on European Union and covers the CFSP and cooperation in criminal and police matters.
The next four Articles (70 paragraphs) amend the EC Treaty, the European Coal and Steel Community Treaty (which
expired in 2002), the Euratom Treaty and the Act concerning the election of the European Parliament. The final provisions
contain four Articles. The new Treaty also set out to simplify the Community Treaties, deleting more than 56 obsolete
articles and renumbering the rest in order to make the whole more legible. By way of example, Article 189b on the
codecision procedure became Article 251.
The most pressing concerns of ordinary Europeans, such as their legal and personal security, immigration and fraud
prevention, were all dealt with in other chapters of the Treaty. In particular, the EU will now be able to legislate on
immigration, civil law or civil procedure, in so far as this is necessary for the free movement of persons within the EU. At
the same time, intergovernmental cooperation was intensified in the police and criminal justice field so that Member
States will be able to coordinate their activities more effectively. The Union aims to establish an area of freedom, security
and justice for its citizens. The Schengen Agreements have now been incorporated into the legal system of the EU.
The Treaty lays down new principles and responsibilities in the field of the common foreign and security policy, with
the emphasis on projecting the EUs values to the outside world, protecting its interests and reforming its modes of action.
The European Council will lay down common strategies, which will then be put into effect by the Council acting by a
qualified majority, subject to certain conditions. In other cases, some States may choose to abstain constructively, i.e.
without actually preventing decisions being taken.
The treaty introduced a High Representative for EU Foreign Policy who, together with the Presidents of the Council
and the European Commission, puts a name and a face on EU policy in the outside world. Although, the Amsterdam
Treaty did not provide for a common defence, it did increase the EUs responsibilities for peacekeeping and humanitarian
work, in particular by forging closer links with Western European Union.

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As for the institutions, there were two major reforms concerning the codecision procedure (the legislative procedure
involving the European Parliament and the Council), affecting its scope most legislation was adopted by the codecision
procedure and its detailed procedures, with Parliament playing a much stronger role. The President of the Commission
will also have to earn the personal trust of Parliament, which will give him the authority to lay down the Commissions
policy guidelines and play an active part in choosing the Members of the Commission by deciding on their appointment
by common accord with the national governments. These provisions make the Commission more politically accountable,
particularly vis--vis the European Parliament. Finally, the new Treaty opens the door, under very strict conditions, to
closer cooperation between Member States which so wish. Closer cooperation may be established, on a proposal from the
Commission, in cases where it is not possible to take joint action, provided that such steps do not undermine the coherence
of the EU or the rights and equality of its citizens.
The Treaty of Amsterdam also places a greater emphasis on rights protection, notably through the insertion of a
new Article F.1. of the TEU that enables the Council, acting in its composition of Heads of State or Government,
to assess penalties on Member States that violate the principles of democracy, rule of law, and basic rights.
Moreover, the Amsterdam Treaty will expand the jurisdiction of the Court of Justice in Article L of the TEU to cover
claims that Community institutions have violated fundamental rights. Also potentially of high importance is the new
Article 6a of the EC Treaty, which will empower the Council to adopt measures to combat discrimination based on
sex, social or ethnic origin, religion or belief, disability, age or sexual orientation.
Treaty Of Nice: The Treaty of Nice was agreed at the Nice European Council in December 2000. It represented a
further attempt by the governments of the member states to find a workable means of moving forward the process of
European integration, and to prepare for the coming enlargement of the EU to include ten new members. Negotiations
were divided by the re-emergence of old arguments over the benefits of intergovernmental as opposed to supranational
models for the running of the EU. Nevertheless, the final document made significant changes to how the EU would be run
in the future.
Arguments raged over the future direction of the EU following the Treaty of Amsterdam (1997) as member states
tried to reform the Commission and European Council before enlargement. French President Jacques Chirac wanted to
see more power given to the European Council and less power resting in the hands of the Commission. Meanwhile,
Commission President Romano Prodi argued for the opposite model (giving more power to the Commission and less to
the Council), while a third and altogether more radical proposal came from German Foreign Minister Joschka Fischer
who set out a vision for a Parliamentary European Federation.
This was the basis upon which an Inter-Governmental Conference met throughout much of 2000 to discuss the
reform of EU decision-making to prepare for enlargement. The same level of disagreement marked the Nice Summit
itself, with the British Prime Minister threatening to veto the treaty if France attempted to push through major reductions
in Britains veto powers. Although agreement was finally reached, few viewed it as a successful process.
Much of the text of the Treaty was concerned with reforming the decision-making of the EU. It extended Qualified
Majority Voting (QMV) in the European Council and removed national vetoes from thirty nine areas. It gave the power to
elect the Commission President to the European Parliament and gave him the power to sack individual Commissioners.
Looking forward to enlargement, it set limits on the numbers of future Commissioners and MEPs, revised the voting
powers of the member states in the European Council to give more weight to the largest states, and formalized the idea of
enhanced co-operation first set out in the Treaty of Amsterdam. The Treaty strengthened the Common Foreign and
Security Policy (CFSP) by creating special representatives and the idea that the Council should be able to negotiate on
behalf of all members at international meetings. Finally, in the Declaration on the Future of the European Union, it
announced that another Intergovernmental Conference should be set up to write an EU Constitution.
The ratification process following the signature of the Nice Treaty on 26/2/2000 was plagued by difficulties. In all the
EU member states the Treaty of Nice was ratified by parliamentary procedure, except in Ireland, where the Irish Supreme
Court in an earlier judgement on the Single European Act had ruled that fundamental changes to European Treaties,
which alter the Irish Constitutions recognition of sovereignty as being ultimately derived from the People, require an
amendment to the Irish constitution. Irelands constitution can only be amended by a referendum of the people.
Q. 2. Discuss Consociationalism as a state-centric model of European integration.
Ans. Consociationalism: Consociationalism is a model providing insights into central features of entities (usually
states) which are divided sharply internally and able to function in a relatively smooth and stable manner. It is aterm used
by Arend Lijphart. Consociationalism is a valuable model in explaining the nature of the balance between fragmentation
and cooperation/integration: costs of fragmentation can be overcome, while power and authority of both the segments

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and the collectivity are strengthened. Therefore, EU membership does not fundamentally undermine the sovereignty of
member states. Lijphart himself has tried to use his concept in order to conceptualize the EUs institutional system.In the
introduction to the updated version of his theory, he regards the Union as an archetype of consensual democracy.
Consociationalism is a form of government involving guaranteed group representation, and is often suggested for
managing conflict in deeply divided societies. It is often viewed as synonymous with power-sharing, although it is technically
only one form of power-sharing.
Consociationalism is often seen as having close affinities with corporatism; some consider it to be a form of corporatism
while others claim that economic corporatism was designed to regulate class conflict, while consociationalism developed
on the basis of reconciling societal fragmentation along ethnic and religious lines.
Nearly all the peace accords negotiated in the past fifteen years have included powersharing in one form or another;
indeed, it can be argued, the number of power-sharing sightings is increasing. As power-sharing gains popularity as a
mode of conflict management and its frequency increases, it becomes increasingly important to assess its foundational
principles. This is true for two reasons. First, the notion of power-sharing covers different approaches, some of which are
inconsistent with each other. These include the two most prominent approaches the consociational strategy advocated
by Arend Lijphart and the centripetal model developed by Donald L. Horowitz. There thus exists a need to determine not
just if power-sharing is useful, but also which kind of power-sharing.
Secondly, in much the same way that there exist different power-sharing strategies, there are also different types of
places to which power-sharing can be applied. These range from the most deadly conflicts to those that are substantially less
violent but are nonetheless polarized and to those that may be diverse but not necessarily deeply divided. This suggests a
need to inquire not just which sort of power-sharing is useful, but also which sort is useful in which type of place.
According to Paul Taylor EU is already that kind of entity so the idea of consociation in the context of the EU, which
encapsulates the EUs constitution in the early years of the second millennium. It is important to know that consociation
as a principle has been talked about very extensively where there are profoundly divided societies. One of its features is
that the executive is seen as a cartel of elites: decisions at the top are essentially made on the basis of unanimity by the
leaders of distinct national sectors, in the EU the leaders of states.
Unanimity one might think is very odd a way of describing the voting procedures of the EU in the first year of the
second millennium because as everyone knows there are arrangements for qualified majority voting in various instances.
But the primary principle of voting in the EU is that of consensus and there are all sorts of arguments and qualifications
that can be entered about the situations in which particular states can be outvoted. The states that hold the Presidency,
mainly because of experience and socialisation, try very hard to control agendas so that states are not outvoted and
certainly not outvoted regularly about matters which they think of as important. So in a cartel of elites there is a very
important principle, in effect of consensus, which can be translated into a somewhat stronger word unanimity. This is a
way of keeping together in a common system of government a set of different sectors, different national entities, different
states of unequal size. It is recognised that one of the things that needs to be avoided, and hitherto has been avoided, is the
situation in which one state could, because of perhaps a larger populationm, impose upon other states.
The Confederal Consociation model which builds on the literature on Consociationalism. It offers an excellent
alternative explanation to the way the EU in general, and its decision-making process in particular, have developed over
the years. In 2001, the main elements of Confederal Consociation as applied to the EU can be narrowed down to three
main characteristics: First, the elites dominate the integration process; as a result, the decision-making process is largely
elite-driven. There is no European demos nor European constitutional order, but rather a collection of national demoi;
Second, the member states still enjoy relative segmental autonomy which is expressed in two different but interrelated
ways: there is a veto right which can be (and is often) exercised by a member state both formally and informally; there
exists proportional representation of one form or another, again formally or informally, at all levels in the central institutions
(e.g. in the Council, the Commission, the EP, the Directorate-Generals in the Commission, the various Secretariats, etc.).
Third, and finally, the Confederal dimension in the Confederal Consociation model confirms the continued preponderance
of the state, especially the national governments, in EU decision-making. Other national institutions of the EU member
states, for instance parliaments, matter as well.
Within this framework, the European Union comes not as a substitute of the corrupt nation-states system, but as an
environment for a new quality of government, described in such terms as multilevel governance, governance without
the state or governance beyond the state (Wallace and Wallace apud Tekin, 2005).
Within the limits of this approach, the European Union is regarded as a consociative confederation or as a confederal
consociation, a sort of managed Gesselschaft (Society), a devolved yet coordinated system where each of the participating

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actors has a high degree of independence from other actors and still preserves and even increases his autonomy (Chrisoochou,
2001:139).
Analyzing the evolution of the European Union after the introduction of the pillar system with the Maastricht Treaty
it is easy to notice the attributes of what some researchers call consociationalist/consociative governance (Chrisoochou,
2001:139-140) or the features of a consociative confederation. The elements from Apters definition may match: more
numerous actors, the pyramid-shaped central authority, the competition among the elites etc.
Transnationalists noticed the problem of the democratic deficit of which the European Union suffers (at least at the
perception level) and they suggest an enlargement of the demos by associating the civic associations to the community
process. Most certainly, the risk to accentuate the inherent anarchy of a confederal-consociative construction remains
intact.
Q. 5. Describe and assess Germanys approach towards European unity movement.
Ans. Germany And The European Union: Germany along with France played major role in integration of Europe
and achieving its destiny. Later Germany undergone by profound change in 1990 when reunification of Germany completed and it changed the priorities in terms of the domestic challenges that demanded a response within the European
context.
After Second World War, Germany divided into two separate nationsthe Federal Republic of Germany i.e. West
Germany and the German Democratic Republic i.e. East Germany. West Germany was a founding member of the European
Community in 1957, which became the EU in 1993. After the reunification of both the Germany, it became the largest
member of the union. Today, it is the largest economy in Europe and third largest in the world.
German Identity and European Union
Immediately after the Second World War when Germany divided into two parts and East Germany became the part of
Soviet bloc, West Germany felt the urgency of constructing national identity. Two different parties of West Germany
Social Democratic Party (SDC) and Christian Democratic Union (CDU) viewed two different approach, where previous
gave importance of reunification of both Germany and advocated for neutral approach in cold war while CDU decided to
be with Western bloc. By the end of the 1940s CDU under the leadership of Konrad Adenauer had reached a consensus
that a social market economya mix of free-market capitalism with strong government regulation and a comprehensive
welfare statewas the best alternative for Germany. the partys foreign policy was staunchly anticommunist, pro-American,
and supportive of European integration; indeed, West Germany was pivotal in the creation of the European Coal and Steel
Community (1952), one of the precursors of the European Union (EU). CDU leaders developed the concept of Rhine
capitalism which is a contemporary economic order existing primarily in Western Europe. The basic characteristics were:
the world of finance is more dominated by the banks instead of the stock exchanges,
close relationships between banks and companies,
a well-adjusted balance of power between share holders and managers,
social partnership between employers and unions,
employees of higher loyalty,
better educated employees thanks to something like the dual education system,
more regulated markets and last but most importantly,
shared values by most of the citizens regarding the ideas of equality and solidarity.
It was in the contrast of Anglo-Saxon form of capitalism which was prevalent in United States and Britain. Konrad
Adenauer and CDU advocated for united Europe and certainly it marked a deep impact on German public opinion which
was true supporter of European integration throughout the post-war era.
Problems Facing Germany
Public support from the german citizen was only till TEU signed and after that the support has been decreased
dramatically. It was all happened because TEU mandated eventual participation in the euro by member states along with
setting up criteria before it could be adopted and thus Deutschmark has been abondened. Before this treaty Deutschmark
established its own prestige in post-war era. It also created suspicion that new common currency could not be so stable
like Deutschmark. Apart from this currency matter there were other issues which reduced the public support. Peoples
thought that adoption of Single European Act will turned their charished national institutions into common intra-national
institution which was establishing in Brussels. And German were very much sensitive to their own institutions.
Actually German approach to this supranational community was based on the reconciliation with France. The then
chancellor Adenauer was pro-West orientation in the post-war era. Franco-German axis and creation and recognition of
mutual interests determined much of the community's early economic and political development. Chancellor Adaneur

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saw the Franco-German relations as the cornerstone of secure Europe. He was also incined with maintaining the relations
with USA because he believed that these two relations are not mutually exclusive.
During the European integration process Germany initiated several policies and initiatives which includes EMS in
1979, and joint initiatives to relaunch the Community at Milan in 1985 and Maastricht in 1991 which finally culminated
the SEA in 1986 and TEU in 1991. However both countries maintained a good relations but still they had differences such
as Germany was positive about the EU enlargement while France was suspicious and and was hesitate to build common
sucurity and defence policies. Even in 1990 when Germany reunited France gave cautious response. Reunification followed
by Maastricht treaty expressed the enthusiasm of Germany towrds European integratiom. Reunification created a problem
for West Germany because they needed the more funds for the reestablishment of poor and developing East Geramany.
Later ratification of Maastricht treaty created another problem for Germany because Germans were very hostile about the
provisions of this treaty especially about Monetory Union. Actually, the unfavourable consequences of Monetory Union
with East Germany before the re-unification was major concern for them. Higher taxes and higher interest rates was
weighing in the mind of people. They feared about the similar consequences of Germany after re-unification and also
feared about the growth of German economy and especially on job prospects.
SECTION II
Q. 7. Write an essay on the Fifth enlargement of European Union-From EU-15 to EU-25.
Ans. The Fifth Enlargement (2004): From EU-15 to EU-25: With the collapse of communism in 1989, the EC
was faced with a large number of potential new members, all of whom expressed an aspiration to join. The first response
was to conclude Europe Agreements, association agreements that fell short of envisaging full membership. Then in June
1993 the Copenhagen European Council accepted the legitimacy of the aspirations of the newly independent states to
become members, and laid down criteria that they would have to fulfil in order for their applications to be considered.
Applications came in rapidly from ten CEECs
EU Policy Towards Eastward Enlargement: The European Unions (EU) eastward enlargement is said to be a
well-designed strategy aimed at overcoming the divisions in Europe and strengthening the process of European integration.
For the first time in the history of enlargements, formal criteria were laid down for this round. The Copenhagen criteria
were:
A political criterionthat an applicant must have stable institutions, guaranteeing democracy, the rule of law,
human rights, and the protection of minorities.
An economic criterionthat an applicant must have a functioning market economy and the capacity to cope with
competitive pressures within the single market of the EU.
A criterion relating to the acquis commu-nautairethat an applicant must be able to take on the obligations of
membership, including adherence to the aims of political, economic, and monetary union.
Although, these were originally criteria for the acceptance of applications, they also came to structure the negotiations
on membership. The criteria owed much to the consensus in other international organizations such as the IMF and World
Bank on the conditions under which assistance would be given to states requesting it.
The Copenhagen criteria are the rules that define whether a country is eligible to join the European Union. The
criteria require that a state has the institutions to preserve democratic governance and human rights, has a functioning
market economy, and accepts the obligations and intent of the EU. These membership criteria were laid down at the June
1993 European Council in Copenhagen, Denmark.
The change of policy, marked by the decision at Copenhagen in June 1993, can be explained by reference to the
completion of other business, by the persistence of the CEECs in requesting membership, and by geo-strategic
considerations. Between 1990 and 1995 the three pressing issues identified above were all cleared out of the way. Formal
reunification of Germany took place on 3 October 1990. The TEU, setting out the timetable and conditions for monetary
union, was agreed at the Maastricht European Council in December 1991, and formally signed by Foreign Ministers in
February 1992. Terms of entry for Austria, Finland, and Sweden were agreed in the early hours of 1 March 1994. Once
these issues were resolved, removing what Friis (1998: 333) described as the negative spillover from internal negotiating
tables, there was the possibility of contemplating further enlargement. The persistence of the CEECs in pressing for
entry to the EC/EU was strengthened by the acceptance of the EC that the EEA scheme was not going to work for the
EFTA applicants. It would have been difficult to convince the CEECs that membership of the single market without
membership of the EU would be any more successful or acceptable for them once the argument had been conceded for the
EFTA applicants. It would have looked simply as though the EC/EU was prepared to accept prosperous member states
and not those most in need of support.

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Problems of Eastward Enlargement: The fifth enlargement which included the ten countries of East Europe into
the European Union created a new kind of problem. It can be measured on different parameters such as economic which
raises considerable increase in the budget expenditure of the EU. In return, they affected the basic policies of European
Union such as agriculture, structural funds, movement of ersons, institutional reforms etc. These issue created a long
transitional phase for the European Union which need to be shorted out with deliberate effort.
Every enlargement had greater impact on their structure and functioning but this enlargement was quite big which
entail changes and remodelling of existing EU structures and institution in radical manner. Decision-making process was
also need to change otherwise it will hamper the EUs basic principle and could be paralysed. This enlargement was also
created a new kind of problem where small and poor countries increased in numbers relative to the large and strong
countries such as Germany, France and Britain. Even with this enlargement EU become more heterogenous in its foreign
and security interests and perceptions.
The new entrants were poor but consists of large agricultural workforce and also increased the EUs arable land about
50 per cent. And this increased volume of workforce and arable land substantially increased the budgetary expenditure of
Common Agricultural Policy which was earlier considered efficient but now there is a possibility that it will distort the
this agricultural policy. Unlike the previous 5 per cent of EUs total workforce which was indulged in agriculture the new
countries participation was 22 per cent. It created a great challenge for the EU because new added countries also needed
the subsidy related to agriculture. However, Agenda 2000 reforms to the CAP tried minimal adjustments to the status quo
to make enlargement possible and new members were included in the EU with the agreement that they will be excluded
from the subsidy system but with some compensatory expenditure.
Migration was another big issue which was related to this enlargement. CEEC countries had huge number of skilled
labour which must have entered into the developed Western labour markets and free movement of labour is an emotional
and political issues which must have affect the non-structural unemployment of West European countries. As to the major
historical motives, it is important to underline that, for the societies in question, accession to the European Union symbolizes
a return to the normal state of affairs. Acquis communautaire is referring to the cumulative body of European Community
laws, comprising the ECs objectives, substantive rules, policies and, in particular, the primary and secondary legislation
and case law all of which form part of the legal order of the European Union (EU). The acquis is dynamic, constantly
developing as the Community evolves, and fundamental. All Member States are bound to comply with the acquis
communautaire. The term is most often used in connection with preparations by candidate countries to join the Union.
They must adopt, implement and enforce all the acquis to be allowed to join the EU. As well as changing national laws,
this often means setting up or changing the necessary administrative or judicial bodies which oversee the legislation. That
part of the acquis communautaire, which is concerned with regulation of employment and industrial relations, constitutes
the foundation for Europeanization of employment and industrial relations in the Member States of the EU, and the basis
for a European system of employment and industrial relations.
Q. 8. Europe needs the US and the US needs Europe. Explain in the context of EU-US relations.
Ans. The European Union And The United States: The relation and cooperation between EU and US has a long
history of mutual cooperation, common political understanding, common diplomatic initiatives and close socio-cultural
ties among the peoples of these two.
Political Relations: The European Union and the United States of America established diplomatic relations as early
as 1953, but it was only in November 1990 that the cooperation was formalized for the first time with the Transatlantic
Declaration. Since December 1995, the New Transatlantic Agenda (NTA) has provided the foundation for the relationship.
The ambitious agenda of cooperation between the EU and the US is taken forward via constant, intensive dialogue.
This dialogue takes place at various levels, from the annual summit meetings between EU and US Leaders to technical
work at expert level.
Within the framework of the NTA and in line with the Transatlantic Economic Partnership (TEP) launched in 1998,
the Transatlantic Economic Council (TEC) was created in 2007 to take forward efforts to boost the transatlantic economy.
Together, the EU and the USA have the largest bilateral trade and investment relationship in the world, roughly 31% of
the world trade and over 49% of the world GDP. In keeping with the evolving political and legal personality of the EU,
there is active cooperation across a host of sectors: cooperation in justice and home affairs, energy and energy security,
environment, science and technology, education and training.
Foreign Policy Cooperation: Convergence and Divergence: The historic and longstanding relationship between
the European Union and the United States is based on shared values and a strong fundamental belief in democratic
government, the rule of law, human rights, and the market economy. The EU-U.S. partnership includes not only political,

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trade and economic relations, but active cooperation between the EU and the U.S. encompassing such global challenges
as promoting energy security and efficiency, combating climate change, and helping developing nations lift themselves
out of poverty, a goal toward which the EU and the U.S. together provide 80 per cent of official development assistance
worldwide. The partners also cooperate in additional policy areas including counterterrorism, crisis management, research
and development, and education and training.
Relations between the European Union and the United States are the bilateral relations between the European Union
(EU) and the United States of America (USA). Due to the EU not having a fully integrated foreign policy, relations can be
more complicated where the EU does not have a common agreed position e.g. EU foreign policy was divided during the
Iraq War. The convergence of declared intentions towards the approach and towards most of the priority areas creates a
window of opportunity for cooperation between the EU and the US and, with it, the possibility for the international
community to deal efficiently with the problems that affect international peace and the quality of life of many of the
worlds inhabitants. But, for this, it is necessary not only to reinforce EU-US cooperation but also to define the priorities
and the strategic options of such cooperation. This is a complex task given that we know that the Europeans and the
Americans not only have to listen to their own voices but will also have to, more often than in the past, listen to each
others voices, those of other nations, and take them into account when they define their policies and their implementation.
EU stressed in its 2003 Security Strategy A Secure Europe in a Better World. This conclusion was recently reaffirmed
by the EU Council when it made an assessment of the implementation of the 5-year-old strategy. The deep conviction of
the EU is that it is possible to build an efficient multilateral system that can regulate globalisation and give it a human
dimension. This conviction comes from its own historical experience of European integration and building peace on the
continent.
Their divergent attitudes towards multilateralism provoked the deepest divisions between Europe and the US during
the Bush years. Today, with the change in the US administration, there is a real possibility of building a new EuroAmerican consensus. This would have implications for the ability of the international community to deal with the serious
global and regional crises that characterise the current situation of international disorder.
In recent years, awareness of the need for global governance has become more acute. This is the case with regard to
the present financial crisis but also with regard to the environmental crisis and world poverty. The same applies to serious
humanitarian crises and mass violations of human rights such as have occurred in Darfur.
Economic Relations: The EU and the US enjoy the most integrated economic relationship in the world, illustrated
by unrivalled levels of mutual investment stocks, reaching over $2.1 trillion. The EU-U.S. economic relationship accounts
for more than 30 per cent of global trade in goods and 40 per cent in services. The two economies each provide the other
with its most important source of foreign direct investment and close to a quarter of all EU-U.S. trade consists of transactions
within firms based on their investments on either side of the Atlantic. Total US investment in the EU is three times higher
than in all of Asia and EU investment in the US is around eight times the amount of EU investment in India and China
together. Investments are thus, the real driver of the transatlantic relationship, contributing to growth and jobs on both
sides of the Atlantic. This can also be illustrated with approximately 15 million jobs linked to the transatlantic economy.
It is estimated that a third of the trade across the Atlantic actually consists of intra-company transfers.
The TransAtlantic Business Dialogue (TABD) is the principal business interlocutor with the U.S. Government and
the European Union on the transatlantic economic relationship. The organization was convened in 1995 by the U.S.
Department of Commerce and the European Commission to serve as the official dialogue between American and European
business leaders and U.S. cabinet secretaries and EU commissioners. The TABD also agreed in January, 2004 to focus its
recommendations to governments on the following seven issue areas:
1. The World Trade Organization Doha Develop-ment Round
2. Intellectual Property Protection
3. Capital Market
4. Regulatory Convergence
5. Corporate Governance
6. International Accounting Standards
7. Maximizing Open Trade and Security
Inevitably for two economies of such size with such a high volume of trade, the EU and the US encounter a number
of trade disputes which are handled through the dispute settlement mechanism of the WTO.

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