I am very honored to be here this evening to address the members of the EU Committee of the American Chamber of Commerce. For almost three years I have worked with you ladies and gentlemen on a host of issues that are of the utmost of importance to the United States. Protecting jobs, assuring access to markets, and enhancing American economic growth form the substance of what we all do here in Brussels. You should be as proud as I am of what we represent.

The United States and the fifteen member states of the European Union form the world's largest trading and investment relationship. The vast part of this relationship takes place without the involvement of governments on either side of the Atlantic. That's the way it should be and that's the way I like it. Nothing makes me happier than to talk to an American businessperson and for him or her to tell me how well things are going and that he or she does not need my help.

But, as you all know, there are going to be bumps along the road in any relationship, and there are certainly more than enough in Brussels to keep us all busy for some time to come. You are right to concentrate on the problems of the day. Whether it is Ken Baker worrying about approval of the latest gene technology, Karen Corbett-Sanders trying to ensure telecommunications access, Patricia Sherman bridging the gap between U.S. sanction laws and business practice, or Keith Chapple attempting to bring sense and direction to the EU Committee's agenda, the number of problems we encounter seem endless.

But tonight is not an occasion to lament whatever problem occupies our current agendas. Tonight is an occasion to sit back and reflect about what we have accomplished, to bring some order to our current portfolios, and to look forward to what the future holds. About a week ago I was watching the news and the terrible reports of the struggle and death that is marking events in Kosovo. At one point the reporter explained that the European Union and the United States were telling both parties that they must sit down and negotiate or the consequences would be severe. This one brief report helped to crystallize in my mind the essence of what we can accomplish, and how that eluded our forefathers several generations ago.

In 1914 Europe was economically integrated and inter-dependent. Keynes described in his Economic Consequences of the Peace that in the forty years before the Great War, Europe had been transformed from a basically self-subsistent set of nation-states in 1870 to a highly organized, developed market which enjoyed "order, security and uniformity, which Europe had never before enjoyed over so wide and populous a territory for so long a period." Yet we all know what happened in August 1914, the terrible events that followed during 1914-18 and the repetition of it again during 1939-45. As I sat listening to the news that night I could not help but take heart from the realization that no matter how many squabbles we have with our European partners, we both seem to get the really important issues right. Cooperation with the European Union in the Balkans is just one example of our successes.

As most of you know, I spent much of my early professional years in the United States Navy. If there is one trait in common all naval alumni possess, it is to take your leave in a dignified manner and no matter what, avoid being maudlin. At this point in a typical farewell speech, there is a temptation to list your accomplishments and perhaps shed a tear or two over those things that might have been. You will get none of that from me. I have not come here tonight to catalog the last three years. Rather I prefer to outline for you a set of challenges. For the future, these are challenges that the United States, the institutions of the European Union and the member states face together. How we attack and resolve these problems will be our legacy, for good or bad, to those who come after us.

Our greatest challenge is, of course, peace. Any contribution that any of us can make to the maintenance of a peaceful world is the greatest gift we can give to the next generation. I am happy to report that in this area we are meeting that challenge. Whether it is geographically close to us now in the Balkans, or farther afield in the Middle East, Africa or other parts of the globe, EU representatives, representatives of member states and American officials meet, consult and take joint or complementary actions which serve the cause of peace. In tribute I would like to ask you to raise your glasses tonight in a toast to our colleagues, no matter where they are, who labor so tirelessly in pursuit of peace.

Other important challenges that we are facing are in the countries of Central and Eastern Europe. Later this year it will be the tenth anniversary of the fall of the Berlin wall and all that it stood for. Democracy, market economies, respect for human rights and the rule of law have all been generally planted and are now growing firmly in the good soil of Eastern and Central Europe. Whether it is the expansion of NATO or the accession of these countries to membership in the European Union, the family of western nations is demonstrating its commitment to build democracy and a better life for our brothers and sisters in Eastern and Central Europe.

Enlargement to the Eastern and Central European countries can guarantee the sort of peace and stability that our fathers and grandfathers could only dream about. It is clearly in the interests of the American people that these countries become equals in every political, legal and economic way. I encourage each of you to be a part of this effort.

I wish I could end my little talk here. Nothing would give me more pleasure than to conclude on the note that all is well and there are no problems worth mentioning. You all know that is not the case. Before I offer specific thoughts on some of our areas of contention, let me offer one way to view them. When the United States and the European Union are at odds, we should not draw sweeping negative conclusions on what this means for our broad relationship. Rather we should view ourselves as two partners who are having an honest difference of opinion, neither has a monopoly on the truth, and neither one is willing to be co-opted by the other. I believe most of you will agree with me that such a relationship merely indicates that each of us is able and willing to stand up for what we believe are the proper courses of action, and the differences we have are proof that strong democracies can hold strongly held opinions and yet still get along. The trick is, I believe, to keep those differences from spreading to infect the wider body politic. Never before in the history of the world have two large powers cooperated so completely and supported each other so effectively as the United States and the member states of the European Union have done over the past fifty years. Your task, and those of my colleagues who remain here, is to manage that creative tension and to improve upon it. The basis of many of our problems today is the different views we have of the role of government in the economy and regulation of markets. Allow me to take a few minutes to develop this theme.

We accomplished much when we reformed the post-World War II trading regime. We have updated it by replacing the GATT with the WTO. We realized the shortcomings of the GATT system and set about to build a WTO, which offered long-term solutions to chronic problems. The challenges we face now are to find equitable ways to implement those solutions. The current disagreements we have over bananas and beef hormones can be viewed as not obstacles to better relations, but opportunities to allow the WTO to work for the benefit of Americans and Europeans alike. I offer no novel solutions to either of these problems tonight. I merely encourage men and women to work together to bridge the gaps that exist. It won't be easy, but I know it can be done. More troublesome, I think, has been the willingness to dismiss the conclusions of objective scientists and scientific institutions - both in the private and public sectors - whose aim is to protect society. This is a dangerous trend in Europe, which could result in a reduction rather than an enhancement of safety. While there are many examples of times when these institutions have let us down, for example at the beginning of the BSE crisis, I see, as a greater damage, the substitution of objective and well-managed science for reliance on standards which claim any scientific advance that is not "natural" is by definition unsafe.

A good case in point is the current debate over genetically modified organisms or GMO's. It is easy for some to say, well that's a problem for the seed producers, like Monsanto. It isn't. The current debate is so extreme that it is difficult to have a rationale discussion of many science problems. Failure to undertake the needed reforms of European scientific public institutions bodes ill for all of us. Throughout history new technologies have encountered resistance, particularly from elements that feel threatened by change. New products brought to market must receive proper scrutiny to ensure safety for all of us. This is really not an option. The Food & Drug Administration or the Department of Agriculture Inspection Services have earned the respect of American consumers through high standards and professionalism. Because of the BSE crisis, similar institutions in the EU member states have suffered a public crisis of confidence. If such confidence is not restored, then every time a problem occurs (and there will be many more), there will be no alternative force of reason to build public confidence. Therefore, we have a joint challenge in trying to help each other enable regulators to regain the public respect they need. Let me suggest several solutions to this problem. The framework for a remedy is starting. At last May's Summit we created the Trans-Atlantic Economic Partnership or TEP to help solve some of our differences. Working groups are now starting to look at seven areas, which could help to increase exports and jobs on both sides of the Atlantic. We will also work with the EU to move the multilateral agenda forward in the next WTO round, enhance regulatory cooperation, and discover new areas ripe for MRA's.

For the past few years I have had the privilege of attending a number of Trans-Atlantic Business Dialog meetings. I congratulate many of you in this room for the great work you have done to make this new exchange work so well. You have convinced your CEO's to take the time and effort to build a consensus between American and European firms, and then have translated that consensus into concrete accomplishments. The Mutual Recognition Agreements are a good case in point. Three years ago the TABD demonstrated to government leaders on both sides of the Atlantic that mutual recognition could lead to decreased trading costs with no loss of consumer protection. The path to negotiating and implementing these agreements has been more difficult and complex than any of us imagined. Implementation is now underway, but many have been discouraged about the process. You should not be. Even ten years ago it would have been unthinkable that such a bridge could be built. Today many of us are impatient because the bridge is taking too long to open.

In May the first meeting of the Trans-Atlantic Environment Dialog will take place in Brussels. I know some here tonight may not welcome that event. You should change your view. The world of economic and trade relations has become more complex than before. In the past the group of persons who were concerned with international trade was rather narrow. While no one meant it to be exclusive, it was. Times are changing.

In the last Congress fast track authority was rejected because we failed, among other mistakes, to take into account the interests of labor, consumer and environmental groups. If we claim the world is now a global marketplace, if electronic commerce allows someone, at the touch of a button, to conduct business halfway around the world, then it behooves us to seek the opinions of all groups with a legitimate interest in trade. Some groups may be one issue lobbies, or have ideas that almost seem to advocate a "Luddite-like" approach to progress. To dismiss or ignore all who come from non-traditional groups, who also have legitimate interests in trade, is akin to building a stone fort after the invention of gunpowder. Someone is just going to build a cannon and blow a large hole through the castle walls. New initiatives like the Trans-Atlantic Environment Dialog, the Trans-Atlantic Labor Dialog, and the Trans-Atlantic Consumer Dialog will give structure and offer the opportunity for these groups to become an integral part of our enhanced relationship between the United States and the European Union which we seek to create. We will neither build a consensus for a solution to the next round of trade negotiations in the WTO if we try to exclude or ignore, labor, consumers or environmentalists, nor will we build support for the more general concept of the benefits of a free and open global trading system. We will only succeed in dividing our publics and rolling back the progress we have posted in the previous rounds. Growth in world trade has brought unprecedented prosperity to both sides of the Atlantic. It is not a "zero-sum" game. I firmly believe we will gain much by being inclusive, and cannot afford to ignore those who are also concerned with the functioning of the global marketplace.

I would like to say a word or two about the euro. The nations of the euro-11 zone have taken a giant step toward forming a real single market in the EU. This is the most significant peaceful transfer of sovereignty in history. The United States has consistently backed European integration. We do the same now. Let me encourage each of your companies to be a euro supporter. There are several good reasons. It helps to cement the EU together. It can be a catalyst for needed economic reforms in the euro-zone. A strong euro will be positive competition for the dollar, and we all know the benefits of competition. But let me end this point by stressing the enormous commercial potential the euro holds. While the nations of the euro-zone have about the same population and GNP of the United States, the financial markets are only about one quarter our size. There is every reason to believe the euro-zone markets will grow to match our own. Can you imagine the potential for financial expertise, electronic requirements, management consulting, accounting advice and legal expertise such market deepening will entail? Believe me, it will pay handsome dividends to those of you that are on the ground floor. Need I encourage you more?

Let me add a cautionary note. The last time Asia, South America and other parts of the world experienced an economic downturn of the magnitude they have now, I was a boy and it was called the Great Depression. We have been fortunate in the U.S. and Europe in avoiding a similar fate. Our luck is partly based on the strengths of our economies. However, we must not mistake the assumption that this can continue. We need to keep our markets open or the rest of the world will drag us both down.

Let me offer some advice for the future. First and foremost, we need to work with the EU to get confidence back in its health and safety testing mechanisms. There is too skeptical a climate now in Europe; it is almost impossible to have the honest exchange of good objective science that we need to solve these problems. It is not enough for us to say the European governments need to de-politicize these processes. If you are not part of the solution, then you are a part of the problem - or so goes a management axiom.

As you all remember, I was head of the Small Business Administration and I could not make a speech without making a plug for small business. The benefits of small business to our own economy are legion. But small business cannot flourish unless the market is open and competition is fair. I know my friend Commissioner van Miert will continue all he can do to foster competition. As you all go along in your own businesses, do not forget the benefits that a level playing field give. Help encourage the EU to improve the environment for small business. Help encourage the EU to turn its policy-making into a transparent one in which all interested parties, large and small, can have a voice. It will pay big dividends for all of us.

Finally, allow me to close by thanking you for all the support and counsel you have given me over the past three years. There are so many of you who are active in more than twenty sub-committees and working groups of the EU Committee, that it is impossible to name everyone. Nevertheless, you should all be aware of how much I personally appreciate your efforts, what a great job you are doing, and to encourage you to continue to work your good work in the future. I want to say a special word of thanks to the current EU Committee Chairman, Keith Chapple. I also want to thank the previous chairman, Bill Seddon-Brown. Both gentlemen have gone out of their way to devote countless hours to advancing American business interests; I want you two to know how much I appreciate that. Last, but not least, I want to sing the praises of John Russell. John leaves the EU Committee this year for greener pastures in the private sector. I have attended countless meetings where John has proven to be the linchpin to success. John, you have worked tirelessly and well on behalf of American interests. I cannot thank you enough for all you have done. So let me conclude by asking all of our friends here to lift our glasses and salute you, John, for a job extremely well done.