Introduction Sir Leon Brittan gave his view of the new Commission's priorities as follows: managing and implementing the Single Market; helping restore economic growth in our economies; completing the GATT Uruguay Round multilateral trade negotiations; cementing our political and economic relations with Central and Eastern Europe and the countries of the former Soviet Union; opening up the Community to new entrants; and ratifying and implementing the Maastricht Treaty. Sir Leon commented: "We have so much unfinished business, that this is not the time for dramatic new visions or for radical new proposals for further European integration". Sir Leon then singled out the following points for particular attention: The GATT brings major gains for industrialists "The Uruguay Round negotiations are not just about agriculture (where the Community has taken some difficult decisions but which we should not forget represents only 3% of Community GDP) but also about bringing services into the range of GATT disciplines (where both France and the UK have much to gain). They also concern intellectual property (a major concern for many European manufacturers) and improving international market access. Defining subsidies and anti-dumping practice are other important segments of the negotiation as well as reworking and shaping the GATT disputes settlement system so it cannot be blocked by any one country. British and French industrialists and entrepreneurs have major gains to pocket, and the world economy as a whole is estimated to benefit from a GATT agreement by an injection of $ 200-300 billion a year, according to the OECD. "I want to finish this negotiation as soon as possible - fairly; with balanced concessions from all leading industrial countries. It is a positive sum game: win-win. The recent progress that has been made in Geneva must not be lost but built on with the new Clinton Administration. We are ready to continue immediately. I look forward to meeting the new United States Trade Representative, Mr Kantor in Washington as soon as possible." Drawing on support from business and industry "European French and British industrialists and businessmen should speak up and support us, for as leaders of dynamic companies you have much to gain in new overseas markets, in the newly industrialised countries and in your traditional trading patches. In the Community it is imperative to seize these opportunities rather than reacting defensively by seeking protection and temporary relief. That route, in the end, will crucify our commercial futures. "With 95% of the Commission's legislative proposals having been adopted by the Council of Ministers, the real challenge now is to implement the Single Market, manage efficiently any difficulties that remain and ensure that the economic gains from a wider more open and competitive market are fully realized. "One area where industrialists feel that the Commission may have a future role to play is in continuing to help to reduce the costs of doing business in Europe, in terms of telecom liberalisation, for example. It still costs too much to make an international phonecall in Europe and our networking and data transfer possibilities are still below average. Opening European energy markets to more competition and improving the Community's infrastructure and transport networks can also help reduce our business overheads. Industrialists also frequently mention the dissemination of best European training practice as an important subject to be developed. Realising the full potential of the ERM "On economic and monetary union, there are clear differences in the approaches of the British and French Governments. France seeks at all costs to stay in the ERM and has acheived that objective. Let it be clearly said that France now has the lowest inflation rate in the EC and over the last 5 years has achieved a faster average economic growth rate than the United Kingdom. The ERM is still considered by French political leaders as a crucial economic policy instrument. "Britain's experience has been different. But Britain has been proved right in pointing out limitations in the way the ERM operates at present. Intervention to defend parities often comes too little, too late and realignments may have been too limited - encouraging speculation. These concerns need addressing not least so that we can see off the instability of recent months and get on with preparations for Stage II of EMU due to begin next January. But whatever its current flaws we should not forget that participation in the ERM is a major reason why the United Kingdom's inflation has fallen dramatically from very high levels. European currency stability also helps reduce trading uncertainty in a Single Market because the European businessman can plan on the basis that he will be paid in a European currency that will be stable and not devalue. This is immensely beneficial for improving confidence and generating investment." Boosting our relations with the rest of the world "The EC is by far the biggest international donor To Central and Eastern Europe and the CIS, through its PHARE and TACIS Programmes, and will spend more than 1.5 billion ECU in these countries this year. This is vital transitional assistance to help these countries integrate into the world political, economic and trading system. But as generous as the Community is, these funds are still only a relatively small contribution to the overall capital requirements of these countries. The real medium- term challenge is to construct new trading relationships with these Eastern European countries and integrate them into Europe's economic orbit; to be open to their goods and services and vice versa (assuming we are broadly trading according to the same market rules). "This will require some courageous decisions from the Community. While it is costly to provide aid it is even more difficult to provide access to our markets, but East Europe needs both and the Edinburgh Summit conclusions have pushed us clearly in this direction. But we must ask ourselves what are the alternatives and what are the costs of inaction? As with the Uruguay Round, European industrialists must also change their mind-set and think about the gains for our industries and our service based companies. There are exciting new investment opportunities in these new Eastern democracies for us, so let us be bold and both forward and outward looking. "Further afield, I am looking forward very much to working with the new United States Administration on external economic matters - I want the Community and the United States to develop our Transatlatic relations further and ensure that our largely trouble-free trading relationship remains that way. "Our relations with Japan are evolving satisfactorily, and in many new areas, but I am still not satisfied that the Community and Japan have resolved problems of market access, equal openness to foreign direct investment or that we operate according to the same strict competition rules. I hope that the new statistical exercise we are jointly undertaking with the Japanese authorities may clarify some of the trading anomalies that must be dealt with. * * *
