Although spared the mudslinging ads on television and in local press, CFO son this side of the Atlantic are watching the final weeks of the U.S. Presidential campaigns more closely than they have in previous elections. Indeed, regardless of whether they're in the Obama or McCain camp, there's a widespread view in European business circles that the next four years will require a mending of fences, and much of that initiative, they hope, will come from Washington.
As one continental European finance chief I recently spoke with conceded, recent years have been trying for transatlantic business relations. Tensions first flared among political leaders, he says, as war in Iraq erupted in 2003, but soon the ill feelings reverberated throughout business and economic relationships. Issues have ranged from small to large — from the tightening of travel visas and work permits to the rise of protectionism that has hobbled cross-border mergers and acquisitions.
This has been happening at a time when many Europeans are debating whether the United States is as relevant a trading partner as it once was. As growth engines slow in Western Europe, the European Union has been looking for a boost from the East, and from China in particular. Between 2003 and 2007, bilateral trade between the EU and China has more than doubled, growing 17 percent in the past year alone.
But the United States still matters. While exports in 2007 from the EU to China totaled €84 billion and imports reached €242 billion, trade between the EU and the United States was nearly double that amount. According to recent research, as many as 14 million jobs in the United States and Europe are dependent on transatlantic economic relationships.
Because the U.S. and EU economies are so deeply intertwined, corporate leaders here have a big wish list for the next four years. High on that list for European CFOs whose companies have subsidiaries in America is taxation; while other countries have been lowering their corporate tax rates, the United States hasn't, leaving it with one of the highest rates in the world. On the list for companies in heavy industry are critical environmental and energy issues that need greater transatlantic alignment, as well as trade policies such as those now being discussed as part of the Transatlantic Marketplace Integration plan to eliminate nontariff trade barriers.
But regardless of industry or specific agenda, the top item on the list for nearly everyone is the same: less fighting, more cooperation.
Janet Kersnar is editor-in-chief of CFO Europe.