A Project of the American Enterprise Institute and the Federalist Society

Syed Kamall, European Union MP for London, answers questions about global free-market issues

Federalist Society

Question: The North America and Europe are the two largest economic powers and are each others primary trade partners. At the same time as some vocal supporters of trans-Atlantic partnership are promoting measures like a putative US-EU free trade accord, we continue to see impasse over issues critical to global trade negotiations (especially agriculture) and difficulty resolving seemingly minor issues like the Byrd Amendment's allocation of duties in anti-dumping cases. Which strand of the trans-Atlantic relationship - cooperation or competition - is likely to dominate over the coming years and what can be done to improve matters?

I would love to see greater cooperation between governments fostering greater competition between companies on both sides of the Atlantic. Business people are ready for a North Atlantic free trade zone; my worry is that political egos on both sides of the Atlantic will leave us watching a competition between social and economic models rather than competition in a free marketplace.

Question: The US and EU are on quite different economic paths. The US has experienced far more deregulation of an already less regulated marketplace, enjoys higher growth rates, and routinely has higher labor-force participation and lower unemployment than the EU. This last trend is most marked among youth. Yet even modest efforts at change in Europe, such as the French initiative that sent millions of French students into the streets, prompt violent opposition. What can be done to change Europe's course on regulation and particularly on employment-related rules?

I do believe that many governments in Europe realize that reform and more deregulation is needed. However, they have to learn to tough out their reform programs. Being a good politician involves doing what people ask of you. Being a great statesman involves doing the right thing even when people are unconvinced about what you are doing. That is what made Mrs Thatcher a great stateswoman, compared to, say, Jacques Chirac. She rarely did a U-turn.

Question: Despite the general difficulty of European economies, some bright spots show the ability to achieve dramatically higher growth and employment rates. Look, for example, at Ireland, which has experienced a stunning economic renaissance, built on lower taxes, less regulation, and greater investment in technology and education. More modestly, Britain has changed its trajectory from what it was in the 1960s and 1970s. Will these examples be rejected by continental Europe as merely part of the too-aggressive, insufficiently egalitarian Anglo-American economic model?

I think there is a difference of view between politicians from 'old' and 'new' Europe. The Scandinavian countries as well as the countries of the former Soviet bloc understand the benefits of the Anglo-American model. France, Italy, Germany and the countries of the southern Mediterranean have a long way to go. My fear for Britain is that we are going backwards and being sucked in to the continental European model by stealth and against our people's wishes.

Question: The late economic theorist Joseph Schumpeter famously wrote that there is an almost inexorable pull in developed economies, especially democratically-governed nations, toward socialism. Even nations such as the US and Australia, which are among the most open to trade and competition, are today firmly in the camp that would have been deemed socialist when Schumpeter wrote. Governments consume increasing shares of GNP (in America, roughly 8-9 times as great a share as at the turn of the 19th to 20th Century), regulate increasing shares of the economy, and exercise "soft" influence over other parts of the economy through litigation and the threat of regulation. Yet America, Britain, and other nations - including many in Latin America, long a bastion of socialism and of dirigiste statism - have seen considerable push-back, and the growth of government has changed perceptibly from its pre-1980s trend. Who in Europe can provide the sort of intellectual respectability for the roll-back of government that the combination of Milton Friedman's writing and Ronald Reagan?s public articulation provided in America?

I wish I knew. Those of us who are mere mortals do our best. For example, in the European Parliament I am building a coalition of small government "classical liberals" committed to rolling back the state. I hope that this will be replicated in parliaments across EU member states.

Question: In what ways does the EU most preserve and advance the rule of law, and in what ways does its structure and rules most threaten it?

The EU most preserves and enhances the rule of law when it allows judiciaries with popular consent to interpret and enforce the law. The rule of law is threatened by the arbitrary decisions of judges with a political agenda, in cases often brought by a Commission with a political agenda.

The European Court of Justice is not only institutionally biased but enjoys no popular consent.

Question: Do you have any perspectives on the use of customary international law and growing reliance on international law generally to interpret domestic laws and regulations?

As the world becomes more globalized, I see no problem with one legal jurisdiction borrowing the wisdom of another. That is how civilization cross fertilizes itself. But we must not confuse borrowing wisdom with ceding sovereignty.

Question: Do you agree that Europe's economies thrive when subject to competition amongst themselves and, if so, what is your position on so-called "outsourcing" to the EU-10, that is the external investments keeping an internal (Member State) economy going, or the "bazaar economy" theory of how, e.g, Germany's export-driven economy (which keeps their entire economy) is kept afloat? Is that threatened and can you defend it?

Yes, I agree that Europe's economies will thrive when subject to competition not only amongst themselves, but with other economies. I prefer if politicians resist from managing the economies through adopting specific economic theories. One of the biggest myths of international trade is that countries trade with and invest in each other. In reality, it is companies and people who trade with and invest in companies in people in other countries. Therefore, the best role for government is to facilitate that by keeping out of the way. If this leads to so-called "outsourcing" or the "bazaar economy" then so be it.

Question: The UK is more liberal than most on the free movement of labor from accession states. What are you doing or might you do to improve the EU's actual economic integration in such areas while the elites are focused on political integration (centralization), and seemingly most concerned about economic integration when they see someone's taxes are "too low"?

I should not be doing much; being hands off is the best way to improve economic integration because it allows businesspeople to hire people and develop economic ties at the speed which best suits their profitability. It is not for politicians to direct how an economy should evolve; the market will take care of that, no doubt influenced by factors such as low taxes.

Question: The European Union was almost immediately after formation of the Coal and Steel agreement always a political idea, sold for decades as an economic idea. With the common market long established the political union was presented to the people with a specific requirement of unanimity, in the form of Europe's constitutional treaty. Many Member States ratified it, never by putting the issue to the governed, but by the governors. Once voted upon in France and Holland the "ever closer union" was rejected. Admittedly, this happened due to a coalition of the left who viewed the treaty as embodying "dog-eat-dog" "Anglo-American capitalism", and the classical liberals who saw the statism. Regardless of reason the outcome remains such that unanimity has been destroyed, and as such is now ignored. In fact Europe's political elites make few secrets about their desire to impose the same provisions but piecemeal and as they are able without popular approval.

As your colleague Dan Hannan MEP has detailed, many Europe-wide laws presently on the books reference or otherwise invoke the constitutional treaty for their organic authority. Efforts to challenge such extralegal endeavors are blunted.

This is correct. We call it "cherry-picking" the constitution. It is wrong because it is fundamentally anti-democratic.

Question: What are your views on the state of the Commission's effort? What specifically do you view as possible that you can do, from rhetorically to meaningfully acting, to change this? What can the public do, through interest groups, NGOs and otherwise and will/do you work with them? What can non-EU States and diplomats do too?

I start from the position that not everything the Commission does is misguided and not everyone in the Commission is evil. I concentrate on highlighting the cases where the Commission has overstepped its popular mandate to act. For example, last week the Commission announced proposals to abolish the national veto on counter-terrorism policy, yet I happen to know from a survey I recently commissioned that nine out of ten of my constituents reject any extension of the EU's power, even into anti-terrorism policy. I have been highlighting that in the media.

The areas where I can personally make a difference are the areas in which I am most expert: international trade and development, media and telecommunications, external affairs. I do meet many representatives of NGOs and think tanks to try to find common ground and to share viewpoints. I appreciate the input of officials form non-EU states too. Politicians have to deal with the human condition; many of the problems are the same the world over and we can learn from each other in how to tackle them.

Question: To discover to what extent an NGO relies upon the Commission for funding, one must ask very specific questions and the Commission is neither fast nor eager to help. Some of you, eg. Chris Heaton-Harris, have pushed the Commission on this very matter in the past. How might you reform the relationship between such groups and the Commission which turns to them for "independent" assessments of Commission proposals? How can NGO Watch work with you to seriously advance such efforts?

I think transparency is the key to this. In the British Parliament, we have a Register of Members' Interests where each MP has to declare any sources of outside income; we also require parties to declare any donations above ₤5,000. The Commission should be under a legal obligation to declare what bodies it is funding, and the NGOs should have to publicly declare how they are funded including how much money is received from the Commission.

I don't mind the Commission going to so-called experts from supposedly independent NGOs for advice as long as the elected MEPs can publicly access that advice and scrutinize its quality. NGO Watch can help highlight how NGOs are funded, who they advise and what advice they have given.