Last week, Ambassador Guenter Burghardt, the European Commission (EC) ambassador to the U.S., toured Central and Southwest Mississippi and met with various elected officials and business leaders in Jackson, Vicksburg and Natchez to discuss economic ties, the euro and the close partnership in fighting terrorism around the world.
The EC, the central executive body of the European Union (EU), with 15 member states representing approximately 370 million people, was created after World War II to economically join the nations of Europe in an effort to preclude further conflict.
The interdependent transatlantic economic relationship between the U.S. and the EU has become increasingly vital since each is the other’s largest single trading partner. Today, the EU/U.S. partnership accounts for 20% of each other’s total trade in goods and one-third of the total trade in services. Combined GDP is around 56% of the world total, even though the EU and U.S. only accounts for 10% of the world’s population. The trade investment markets account for $2 billion a day.
Europe is vital to Mississippi’s export marketing efforts. Seven of the state’s top 20 global export markets are EU members. Six of 10 foreign-supported manufacturing jobs in Mississippi are derived from EU investments. Last year, Europe represented about one-fourth of Mississippi’s total global exports, or $644 million of $2.7 billion, with the U.K., Benelux, Germany, Italy and France as primary markets.
Since Burghardt joined the EU as a member of the Legal Service in 1970, he has worked in a myriad of positions with the commission and became the top EC representative to the U.S. in Feb. 2000.
Before his three-city tour, the Mississippi Business Journal talked to Burghardt about deepening ties with EU members, Mississippi’s role in the global economy, the effects of the euro in trade relations and the EU’s view on the Sept. 11 terrorist attacks.
Mississippi Business Journal: Why the EU’s focus on Mississippi?
Guenter Burghardt: As the European Union Commission Ambassador to the U.S., I not only have an interest but also a responsibility to visit as many of the states as possible during my term because states play such an important role in the formulation of U.S. policy and legislation. Also, I think it is necessary every once in a while to get outside the Washington Beltway, meet Americans from all across the country, and hear how they perceive and feel about Europe and the transatlantic relationship.
Mississippi has an excellent location and distribution facilities. EU companies supply around 47% or $2.4 billion of all foreign direct investment in Mississippi and an estimated 13,600 jobs. Twenty-three percent of all goods produced in this state are consumed in the European Union, and those exports, valued at almost $700 million in 2000, support almost 6,000 jobs here.
MBJ: What can the Mississippi business community do to deepen its relationship with EU members?
Burghardt: The same simple rule applies the world over: stay informed and go directly to the source. The European Commission, which handles trade policy on behalf of our 15 member countries, is an excellent starting point. We have a vastly comprehensive Brussels-based Web site, http://europa.eu.int, where you can find policy, legislation, statements and statistics for every policy area. Our office in Washington, D.C. has a Web site more customized to the needs of Americans, http://www.eurunion.org. Mississippi business should also stay informed about developments in the Transatlantic Business Dialogue (TABD), which was set up in 1995 to help reduce red tape and remove barriers to trade. The TABD’s Web site is www.tabd.org.
Mississippi business also needs to be aware that the European market, currently with 380 million consumers, will only grow during this decade as the countries of Central Europe join the European Union. U.S. manufacturers and exporters already manufacture to a single set of requirements if they export to the EU’s 15 member states. As the EU grows to 20-plus member states in the coming years, doing business with the rest of Europe will get simpler too.
Another, more imminent development is the launch of the euro in 12 out of our 15 EU member countries on Jan. 1, 2001. The euro is roughly equivalent to a dollar, so this will make doing business in Europe simpler and less costly because the euro will remove the need for multiple currency exchange transactions and fees.
MBJ: Concerning Mississippi farmers and the EU’s resistance to biotechnology, do you foresee the EU softening its position?
Burghardt: The European Union per se is not resistant to biotechnology, but many European consumers are! We have to be sensitive to their concerns. Consumer confidence in Europe has suffered a setback due to various food scares in recent years. These episodes coincided with and perhaps influenced the GMO debate in Europe. The result has been a backlash against GMOs and concerns about their long-term effects on environment and human health. The EU is working to restore consumer confidence regarding GMOs by introducing clear rules for traceability and labeling. Traceability is important in the event of a problem, when a rapid recall is required, and labeling enables the consumer to make an informed choice.
Our position has been a little misrepresented, and that is why Commissioner David Byrne, who is responsible for health and consumer protection, recently came to the U.S. on a biotechnology bridge-building exercise. He met with counterparts in the U.S. government, members of Congress and business representatives, listened to their views and concerns and explained as best he could that the EU approach is not protectionist. It is about demystifying GMOs for the European consumer. I must say that the way GMOs were introduced here is hardly textbook. Biotechnology companies concentrated on the farmer and not on the end consumer. If companies had started with them, perhaps there would have been less confusion also in Europe. The only way out now is to restore consumer confidence. This must be our common objective.
MBJ: The strength of the U.S. dollar is causing real difficulties for Mississippi manufacturers. How do you see this situation trending over the next 12 months? What can and should be done?
Burghardt: The U.S. dollar has been quite strong vis-