WASHINGTON, May 11 (UPI) -- U.S.-European business relations improved dramatically in 2003 despite surging anti-Americanism and diplomatic discord over the Iraq war, belying widely held fears of a "transatlantic rift," according to a new university study.
The study, conducted by researchers at the Center for Transatlantic Relations in Washington, also plays down concern over corporate outsourcing and U.S. trade deficits, arguing that mutual investments by European and American companies in each others' economies are more important -- and far more extensive -- than investments in lower-wage developing nations such as China and India.
The center is part of the Johns Hopkins University School for Advanced International Studies.
If Europeans are from Venus and Americans from Mars, they should both "pay more attention to Mercury, the god of commerce," said study co-author Daniel Hamilton at a presentation of the report on Monday attended by representatives of European embassies and American trade officials.
The business community is a vital source of transatlantic cooperation during political crises, according to the report, titled, "Partners in Prosperity: The Changing Geography of the Transatlantic Economy."
For example, despite virulent antiwar sentiment across the continent, European firms pumped $36.9 billion in foreign direct investments in the United States, a sharp increase from the $26 billion invested in 2002, according to the study. Likewise, American firms invested $7 billion in Germany in 2003-$12 billion more than in 2002-"even though U.S.-German relations ebbed to one of their lowest levels since World War II," wrote the authors.
The authors said they were motivated to conduct their research because of commonly held misconceptions that U.S.-European economic ties necessarily mirror diplomatic relations. "The idea that we've been drifting apart since the Cold War is simply not true," said co-author Joseph P. Quinlan, adding that whatever frictions exist between the historical allies "results from deep integration, rather than from drifting apart."
The transatlantic economy produces $2.5 trillion in total commercial sales and employs over 12 million "insourced" workers, according to the study. As such, it is a "laboratory" for globalization, and a test case for the viability of a truly global economy.
The experiment appears to be holding up, though "we're not trying to be Pollyannish about it," said Hamilton. "There are serious problems."
Though a transatlantic "divorce" is not in the offing, a "dysfunctional marriage" might be, said Hamilton, if the United States and the European Union don't resolve nagging problems like trade disputes over genetically modified foods, and diplomatic frictions over international institutions like the International Criminal Court.
"The U.S. and Europe have about a half decade to get their house in order," Quinlan predicted, before regulatory and diplomatic disputes begin to impact economic ties. "If we don't work together, we're going to fail," he said.
That sentiment was echoed during Monday's presentation by DaimlerChrysler executive Robert Liberatore. The German carmaker is the world's largest transatlantic company, employing 360,000 employees on both sides of the Atlantic.
"When we sneeze in Europe, we catch cold in the U.S., so we're very interested in disputes being resolved in a sensible way," Liberatore told the audience.
The research study was funded in part by a grant from the DaimlerChrysler Corporation Fund.
Rounding out the pleas for transatlantic sensitivity at Monday's event was Sen. Robert Bennett, R.-Utah, who called on Americans to respect a historically war-torn Europe's preference for the stability of multilateral institutions, while urging the assembled Europeans to have faith that the Bush administration's unilateralist foreign policy posture is guided by moral, not monetary, motives.
The ongoing challenge to the transatlantic relationship was underscored when a representative of the German embassy stood and asked Bennett if the Senate would ease strict visa policies implemented after 9-11, policies that impede economic interaction.
"Nothing's going to happen," until after the presidential elections, Bennett said.
He added, "We'll address the visa thing in January, and hopefully we'll act a little more intelligently this time."
