Welcome all of you to the final session of this year's Brussels forum. And since this is our final session, I'd like to take this opportunity if we could to take a moment and thank the organizers of this Brussels Forum, and in particular, all of those people who have worked behind the scenes to make this such a successful event. Our session today, as you know, is about deepening the transatlantic marketplace. There's no need really to go into great detail about this marvelous market that we all live and work in. It's 40 percent of world trade. It's 60 percent of world GDP. There are millions of jobs and billions of dollars in investment that cross the Atlantic that drive this single market even though we don't have really a single market, and part of our discussion here is how we make it more single and how we make it more barrier free. I think we can trace the current effort and as you know, there is an effort, which will be highlighted on Monday, tomorrow, in Washington with the signing of an agreement between the European Union and the United States about deepening the marketplace. We can trace this particular initiative I think back to the beginning of 2005, when it was clear the Bush Administration wanted to re. ˜launch their relationship with the European Union and with Brussels. The President came to Brussels on an unprecedented trip, and there was a conscious effort on the part of the United States government to revivify this relationship and breathe new life and energy into it. And the second telling change here was the personal interest of Chancellor Merkel in attempting to bring to the forefront the economic aspect of our relationship to deepen transatlantic ties through some kind of strengthening of the economic marketplace. And I think without her personal commitment to this, what's going to happen tomorrow would not have been possible. Now of course what we're building on is an effort that's been going on since 1995, an effort that was launched in 1995 to create a stronger transatlantic market. That was a process bottom up building of the market step by step, block by block, and I think after a decade of that, the effort had lost energy. It had lost commitment. It hadn't produced enough and we were ready for a new top down initiative that had more of a political impotence. I like to think of it as we had a glass of water. The water in it had lost its fizz. It had become stale. We've poured out the water. We've poured in new water and I think one of the questions we want to get our panelists to address today is this new glass of water half full or half empty. How do we judge what is about to be signed tomorrow. We don't know exactly what's going to be signed tomorrow. Actually, a couple of you sitting out here know what's going to be signed tomorrow, but that's not public yet, but we have somewhat of a sense. We know that we made a very important initiative in signing an Open Skies agreement. Hopefully, it'll be the first part of a two-part Open Skies agreement across the Atlantic. We have a commitment, a very strong commitment to every counting equivalency by 2009 at the latest which would be a terribly important, both important for our businesses and I think symbolically very important. And we will be committing ourselves to regulatory cooperation in a number of areas, in automotives, in pharmaceuticals, better intellectual property enforcement, new initiatives on trade security and easing that impact on our economies. We will be creating a Trans-Atlantic Council that will hopefully add some political impetus to this effort, some political oversight, led by Commissioner Verheugan on the European side and probably Al Hubbard in the White House or Bob Portman from the OMB on the U.S. side, so there'll be someone who is driving this process. But still the issue is the proof is in the pudding. These are all bold new commitments, but we don't know yet how much they will deliver. So these are the kinds of issues we want to address with our panelists. I will start with Senator Bennett who many of you know from Utah. Senator, one aspect of this deal for tomorrow, there is no formal framework. The Europeans had initially talked with us about some kind of legally binding formal framework across the Atlantic. From an American perspective we thought that wasn't possible. I would be curious to get your sense of why we think that is not the way to go. Let me first comment on your analogy about the glass, is it half full or half empty. An engineer would say it is too big. And so we need to shape the glass to say what is it that we are trying to do. And I think you're correct in saying that the impetus in where we are is the 2005 Agreement in that Chancellor Merkel has made a significant contribution by putting that as her number one initiative in her conversations with President Bush. The primary impact of that will be to raise the visibility of this whole thing. There is a lot of conversation about EU and American cooperation, a lot of conversation about the need, the depth of the relationship, the amount of money involved and so on and so forth, and, then that conversation goes away. You get together, everybody says the same cliché's and then everybody turns around and goes to what they think is something important like China. I would point out from the conversation we had in the last panel that the amount of GDP growth in the United States from 2001 until today is greater than the total Chinese GDP is. We've grown by roughly $2.7 trillion. The total Chinese GDP is about $2.3trillion. So, as you point, out the total GDP between the United States and the European community is 60 percent of the world. This is where the action is and we just simply ignore it. So what is going to happen tomorrow, the initiatives set in motion by Chancellor Merkel is tremendously important simply because it is pointing out the glass is too big. Let's either get a smaller glass or more important, let's pour more water in it and in this case more money, and, this is the point I want to make with respect to how important this is. Again, the conversations we have had yesterday and today about a number of things, our responsibilities around the world, our responsibilities to the environment, responsibilities to the poor and so on. You cannot meet any of those responsibilities if you do not have the money and money does not come from the budget. Money comes from the economy. The main impact of an intelligent effort on the part of United States and European community to reduce the regulatory burden will be to make 60 percent of the world's GDP, that economy, more efficient and more productive which means more money. It means we will have more opportunity to deal with the environmental challenges, because we can afford it. The places that are the dirtiest in the world are the places that are the poorest. The places where you have clean air and clean water are the places where they have enough money to pay for the scrubbers on the factors and the filters on the water. So we, to get back to your question, how is Congress going to react, I hope congress is going to wake up to the fact that we have these kinds of opportunities, we have this situation and it is something that is frankly relatively low hanging fruit, because we don't have to muscle through a free trade agreement. We don't have to fight over labor and environmental standards in some third world country. We just have to do the logical thing with respect to regulatory reform all across the board and we will see the benefit for the economies everywhere. You talk about the need to get Congress involved and I think that is one of the issues we want to talk about in great detail here and get legislative officials on both sides. Is one of the reasons why we don't want a formally legally binding agreement with Europe is that it may get Congress too involved to soon and it may become to controversial in the U.S. side. It's the wrong vocabulary. In today's Congress, anything that says free trade agreement is in real trouble, regardless of the substance. I traveled with Harry Reed we were down in South America and they were very interested in free trade agreements and Harry said, I've never voted for a free trade agreement in my life and I don't intend to ever do so at any point in the future. Well, that's a little bit of a difficult starting point when you want to deal with this. So, to say, no this is not a free trade agreement, this is simply a cooperation across the Atlantic to try to reduce the regulatory burden by 25 percent, as a former businessman, I think that's a marvelous goal to set and we now can have a framework and some specifics without having to fight through the political problem connected with the title, Free Trade Agreement. Brok, you've been involved in various efforts for years to try to further a transatlantic economic cooperation and deepening and broadening of the market. You're also a politician to carry over the political discussion. We are creating a transatlantic council which will involve Commissioners and members of the U.S. Cabinet; try to bring some political impetus to this. Will that be sufficient? What more might be needed in the future? What's needed from people in this audience to make sure that that political commitment is there? I think that we need, after we have not got this formal framework agreement which might be a task for the future, we have to do something to put it for longer time on the political level. The voluntary button up building block approach to cooperation pursued by various American and European regulatory agencies deepened bureacratic ties and personal relationships between regulated but has produced few tangible results. That is the practical result of that because we know it on the very beginning before we had to single market legislation possibly European Union it was also Europe created a single market before it's 86 and in the European market it was a similar situation. And therefore to put such a question on a political level, to control it on a political level, give injections and new debates about it all the time. Such a council is an important addition, but it's important that this council does not just exist out of the first class people of the agencies. There must be also involved people from business, from Parliaments in a way. In order to have such a control that it does not go again down the bureaucratic drain. I think that's a crucial point to achieve. And therefore I believe that the setting up of this council might be one of the major points how such a thing can be made run for a longer time, and to come to results. And here also we have certain figures which are clear. If you vote you haven't fully integrated transatlantic market it would mean 3.5 percent growth rate per capita. It has to do with 40 million drops on both sides. So, it is of huge interest of ordinary citizens to come to a result here and therefore I think it is important to have such another broader debate which makes it possible to come to such a result. And therefore I am very thankful that this was taken by Chancellor Merkel on board. And the American side where many people like Mr. Cox, Mr. Bennett and others have taken responsibility and deserve a grey as between someone who has been in Brussels to help us to make this possible in their last weeks. Commissioner Chris Cox, you're the head of the Security Exchange Commission. One of the deliverables that people feel we'll get quite soon is an agreement on accounting standards. Possibly some time next year even. I'd be curious to get your sense of how fast you think that can be resolved, maybe what some of the remaining issues are, and what comes next in the financial markets in terms of what we can learn from that exercise and where we can go next? Well that's a wonderful example of how all of this cooperation can lead to very tangible results and indeed I would suggest that the transatlantic cooperation, in this case, the global cooperation on building truly global high-quality accounting standards as a model for the whole enterprise. It has had political support in all of the nations of the world, essentially, certainly across the EU. It's had support in the United States. Congress three times has directed the Securities and Exchange Commission of Legislation in the Sarbanes-Oxley Act to take a look at principles based rather than rules-based systems of counting, and inform Congress how quickly this might be done. What's happened in the last five years since 2002 and the famed Norwalk Agreement, is that first in that year Europe made the decision to go forward with international financial reporting standards. And now that is mandatory across the EU. The second, in our country, the U.S. Financial Accounting Standards Board began a convergence project with the IASB. That's been going swimmingly. 2005 we announced a roadmap very publicly that would lead, if we stayed on track, to the lifting of the requirement in the United States that any country that uses international financial reporting standards has to keep a second set of books and reconcile that back to U.S. GAAP, Generally Accepted Account Principles in our country. We just announced this past week that we are taking the next step on that roadmap, on that course, so that it is becoming very likely that in 2009 or earlier that requirement will be lifted. The result of that will be that foreign private issuers will have a choice. It will be up to the marketplace, not the government to determine whether or not they want to use IFRS, and U.S. GAAP. We'll have those two systems operating in our country. And that inexorably lead to another question, what about U.S. issuers who will not have that choice. So this summer we'll publish a concept paper that will raise all of these questions for discussion. And I'm not entirely sure where that will lead, but it's quite clear that we are getting much closer to this desired objective of a global standard. And let me say why that's important. It's not important just so everyone can be the same. It's important because of the regulatory friction that it eliminates. It's important because from an investor protection standpoint, there's a much higher level of comparability. And that's what we're all about. So I would hold this up as a model. During this trip in Europe I've been in the UK, in Germany, and here in Brussels. And each place concluding important agreements that are with CESR, in one case, the Committee of European Security Regulators with the UK, both their FSA and their Financial Reporting Counsel, and with BAFA in Germany, moving us closer to the ability to work hand-in-glove a regulators to reduce friction. I think at the same time we're going to be able to increase investor protection, and improve the quality of trading in our markets, because we're washing out differences that are needless when regulators have the same objectives. It does seem to me that this is terribly important politically. Because when this is finally done and it's public, we have another deliverable to demonstrate to our publics and to our politicians that this kind of cooperation can be successful. Now there's another set of cooperation I want to talk to Mario Monti about. But first I want to ask him a question. The International Herald Tribune the other day had an article about US-EU cooperation. And it led saying we have had a somewhat acrimonious situation over the last few years in terms of anti-trust issues, in terms of Microsoft in Iraq. And I want to know, Mario Monti, are you responsible for all of those? But let me ask you though. You were part of the anti-trust, a potential wreck. We were all convinced there was going to be a huge dust-up over anti-trust, and we came close, very, very close. However, there was background discussions that have evolved. And now I think it would be fair to say that our accounting dialogue, in fact, learned something from the anti-trust dialogue that's going on, the need for regulators to work together behind the scenes. Can you talk a little about that, and then what lessons that gives us for the future? Yes. The U.S. and EU started out with a bilateral cooperation agreement on anti trust in the early 90s. Then towards the end of the 90s there was an interesting moment of discussion on whether to go multi-lateral. The EU did want anti-trust to go multi-lateral, and wanted that to be done with some bind elements like the discussions today, in the context of the WTO. The U.S. did not want any multi-lateral approach let alone in the context of the WTO. Then there was a positive breaking moment and the end of the 2000 when the U.S. said OK we've reflected we accept a multi lateral approach to competition policy but not in the WTO. And we, I was then Competition Commissioner immediately replied saying OK, welcome we dropped the WTO and they brought to ICN, the International Competition Network which now comprises some 90 anti trust authorities. I mention this because as much as I among others would have liked tomorrow a more formal structure to be decided upon, the fact that there no binding elements is not necessarily a recipe for failure as this anti trust among others shows. Now in terms of bilateral cooperation, the attention has been attracted by those very, very rate exceptions to the harmonious working of the U.S. and E.U., AG Honeywell merger if I remember well and the Microsoft case. But the good thing about this is that in spite of this isolated divergences, and what the arrangements you will never get the mathematical certainty of completely converging our camps. The climate of the corporation has been able to reabsorb this very, very promptly, why? In my analysis there are two conditions which have played to make anti trust cooperation a success between Washington and Brussels. One is the common cultural vision, and increasingly so about the fact that anti trust is there to promote consumer welfare. And this is common to the two. And second the fact that in anti trust we do not have one of the usual institutional weaknesses of Europe. In anti trust, because of the treaty on which it relies, Europe is about to speak and act as one. Several times I joked with Dr. Kissinger that his theorem actually plays the other way around for anti trust because there are two telephone numbers in Washington, the DOJ and the FTC. They tend to work most of the cases harmoniously together. There are two; there is only one in Europe. So if I look back at this anti trust positive experience which the business community of course has very much supported. I think that we must talk from this new effort transatlantically which will be signs tomorrow to have again a boost in the bilateral cooperation but in a very, very open manner to the rest of the world. Just like the ICN which mentioned was the derivative of this bilateral cooperation. Let's try to have in the near future something similar in other areas. Chris Cox, before we go to the panel, is there any lesson that you can derive from your experience now on accounting a lesson to teach other regulators about how to do these things. Because we have number of areas, pharmaceuticals, auto parts, and so forth where we're going to try reengage our regulators and try to get them actually to make some progress. I think the first lesson is to be attentive to the market because most of the success that we've had not just in the accounting area but across the board in transnational securities regulation has been dealing with what we considered to be salutary market developments. You can take as an additional example, the recent combination of the New York Stock Exchange and Euro Next that is now a very significant transatlantic company that's operating six different exchanges, serving customers of all kinds. That forced the Euro Next College of Regulators and the Securities and Exchange Commission into one another's arms. It could have been a calamity, but because we all saw that there were benefits if this were done right, we succeeded. I think the same thing is true with IFRS, it's quite clear that there can be significant benefits for investors, significant benefits for ordinary people around the world not to mention, business and institutional investors and pension funds and so on. If there were a truly high quality set of global standards that would promote comparability on a principle basis, so we have to recognize that these marketplace developments, which are in the main driving us towards greater transatlantic cooperation in any way event can be the wind at our back, and we have to be humble about it and recognize that the regulators are not the engine that drives the innovator. We are, however, the grease in the wheels that's necessary to make it work. Let me ask again, just to push this, both of you. Both of you had success. You're about to have success hopefully in part because of a crisis, one was in anti. ˜trust in a series of potential train wrecks. The other was Sarbanes-Oxley and the kind of tension that grew out of that. Do you need a crisis to actually make these regulatory cooperation work? Either one of you. Well, you need something to get people's attention. It can be good or ill. One hopes it isn't always a train wreck or a calamity. But we've had people's attention in a variety of ways. Obviously, it got the world attention when we had those horrible scandals in the United States. It certainly got our attention. But it also got people's attention when with alacrity United States dealt with it and a great deal of Sarbanes-Oxley has been imitated around the world by legislators and by I should say legislators, parliaments and by regulators. There was one particular aspect of Sarbanes-Oxley that didn't go over well in Europe or the rest of the world and that was what we call Section 404, the portion of the law that deals with internal control audits. We have listened very carefully to Europe in that respect. We've been very attentive to European concerns. We have, on multiple occasions, differed compliance with it for certain issuers. We've changed our de-registration rules and the way that one calculates market interest in the United States, so it's easier to withdraw. But because those concerns were not just expressed by foreign private issuers, but also by issuers and many stakeholders in the United States, we've also been very, very busy trying to improve the standard, and so I think much good can come simply from having people's attention. It doesn't always have to be in a bad way. We're going to throw this open to the audience now. I would remind you, you don't have to ask a question. You can make a comment. You don't have to put a question mark at the end of your comment. The only thing you have to do is keep it short or I will cut you off. I promise you.
member. 
