Clinton,Europe and Economic Diplomacy: What Makes the EU Different?

The Clinton administration's economic diplomacy has been more aggressive, politicized and controversial than that of any recent US administration. We examine its application to the European Union (EU) and seek to answer the question: what makes Europe different? Put another way, why has the US pursued cooperation on “behind-the-border” issues such as competition policy, standards and investment rules, and eschewed export promotion? We offer three explanations. First, the EU's market is unique: it is a mature, but lucrative one for large US-owned firms concerned more with behind-the-border issues than with market access issues. Second, American companies who have invested heavily in Europe have developed their own political links to the EU, particularly through the EU Committee of the American Chamber of Commerce. Third, these same companies have a powerful influence over US policy towards Europe as well as EU policymaking. Our analysis develops these three hypotheses, and also offers an assessment of the progress and meaning of the Transatlantic Business Dialogue.