N. America-Europe free trade proposed

September 16, 1994|By Chicago Tribune

BERLIN -- As the caissons go rolling home and Europe bids farewell to the last vestiges of the Cold War, a growing chorus of leading German and American corporate executives is proposing a trans-Atlantic free-trade zone linking the European Union and North America.

As post-Cold War Europe, with Berlin at the crossroads, witnesses an upheaval in trade, historic opportunities are opening for U.S. investors -- for those investors, that is, who are flexible and creative enough to deal with surprises.

Those are the assessments of corporate executives and trade experts who attended a conference in Berlin for German and American business leaders. They gathered last weekend after witnessing ceremonies for the final withdrawal of Allied forces from Berlin after 49 years of guarding the Cold War's front-line capital.

"There is a total upheaval in trade throughout Europe, and you can hear how often people are talking about and asking about the North American Free Trade Agreement," said William Daley of the Chicago law firm Mayer Brown & Platt.

President Clinton plucked Mr. Daley from his role as chief strategist for Chicago's most famous political dynasty to become head of the White House campaign to push NAFTA through a reluctant Congress.

"NAFTA is viewed here as a model trade agreement," Mr. Daley said, an assessment confirmed by one of Germany's senior industrialists.

"Why should we not muster the courage to undertake a magnificent project, the project of a trans-Atlantic free-trade zone?" said Edzard Reuter, chairman of Daimler-Benz AG, Europe's largest industrial conglomerate.

Mr. Reuter, who is considering a campaign for mayor of Berlin, a post held in the postwar years by his father, argued that a trans-Atlantic economic merger would create millions of jobs and defuse trade wars.

"The positive impact of a trans-Atlantic free-trade zone would be immense," he added.

NAFTA, which came into effect this year, links the United States, Canada and Mexico in a free-trade area.

Mr. Daley noted that political instability on the European Union's eastern border might be calmed by extending a free-trade pact into the former Communist bloc, as well.

"A NAFTA-type deal can be used to boost democracy in Eastern Europe," Mr. Daley said, citing Mexico's recent election, which monitors said was one of the most free and fair in that nation's history.

Taken as a whole, "opportunities are ever-ascending across Europe," said Robert Galvin, chairman of the executive committee and a director of Motorola Inc., the Schaumburg, Ill.-based electronics giant.

Mr. Galvin predicts that Europe will be "a healthy market over the next five years" and that firms specializing in technology -- especially satellite communications -- "are going to grow at an even greater rate than the general growth of the European economies."

It was such confidence that prompted Motorola to announce this month that it would spend $387 million to expand its semiconductor-wafer fabrication plant in East Kilbride, Scotland.

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