Europe 1992

The end of the cold war brings into sharp focus the shifting balance between military and economic power. As national security alliances recede (NATO) or collapse (Warsaw Pact), new economic alliances gather strength. Japan is forging special economic ties with China and it's other Asian neighbors; the United States is creating a North American free trade area that could extend from Canada to Mexico; and the European Community is moving aggressively to complete it's internal market, and establish stronger links with nations from the European Free Trade Association and Eastern Europe. The emergence of a unified Europe promises to affect the United States in several ways, some immediate and obvious, others long-term and subtle. This book provides a close look at the economic consequences of that process in four important sections: banking and securities, automobiles, telecommunications, and semiconductors. It explores the ramifications of the Community's newly energized approach to competiton policy; and finally, it examines the negotiating stategy that will best serve U.S. economic interests. The authors suggest that U.S. companies established in Europe will prosper with the completion of the internal market, by being able to operate on a continental scale. More problematic is the position of U.S. firms that export their goods and services to the European market, although the negotiating record suggests that potential barriers can be reduced or eliminated. Finally, the successful unification of Europe may very well prompt the United States to reexamine its own economic institutions, ranging from the Glass-Steagall and McFadden Acts that preclude universal banking, to the role ofgovernment-assisted research consortia in promoting high technology.