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Editor's Note: What I Did On My Winter Vacation

Dec 17, 2004, 23:30 (7 Talkback[s])
(Other stories by Brian Proffitt)

By Brian Proffitt
Managing Editor

It is, I fear, a typically American mindset that gets me to wait until the second week of December to start using up my allotted vacation. Taking time off it seems, is not something citizens in my country do very well.

This was just one of the lessons I learned reading The United States of Europe while on vacation last week. Written by T.R. Reid, this book examines the growth of the European Union as a very strong political and economic force in the world. In essence, the book proclaims, the EU is becoming (or has already become) a new superpower in the world--one that should neatly topple the unipower vision of the world currently held by many in the US government.

Reading this book was a pleasure, and it got me to thinking about how it is that Europe (and many other nations in the world) seem to "get it" about Linux and my government seems to lag way behind. I will be honest with you; up until reading Europe, I thought that it was basically a case of anti-Americanism at work. Windows equaled Microsoft equaled corporate America equaled evil. That sort of thing.

But in Europe, which compares and contrasts the US view of the world versus the EU view, I learned that it is not quite so one-dimensional.

From the book, I get the sense of a cooperative spirit and thoughtfulness that allows European leaders to examine Linux with at least an objective eye. Even if Microsoft were made in Bonn or Nice, I get the sense that in Europe they are going to hold all software up to the same standard: will it be the best solution? Not, will it keep jobs in my city/state/country?

Interestingly, Linux is mentioned at one point in the book, when Reid lists the many examples of technological advances that come from Europe. This would tend to lend credence to the whole anti-US idea, but the book goes on to describe the EU as a place where individual nation-states have learned that capitalism at any cost is just not necessary anymore--a lesson the US has not learned yet. Cooperation seems to be the key, and it seems to be a key that has unlocked the door to massive economic power.

In one case, the book describes in some detail, the travails of General Electric's attempted merger with Honeywell. This merger flew through the US Securities and Exchange Commission as an okey-dokey proposition, and everyone though this was pretty much a done deal. But then the EU stepped in.

According to Mario Monti, the European competition commissioner, these two companies merging was not a good idea.

"Such integration, unless corrected, could have resulted in the foreclosure of the market for competitors," Monti said in a 2001 BBC interview.

And with the EU's decision, the merger was kaput, just like that. US business leaders went ballistic. After all, these were two US companies, doing a merger in the US. What the heck did the EU care about a merger that was already approved by the SEC? What right did they have to block it? Many pundits and colleagues suggested that then-GE CEO Jack Welsh ignore the EU's decision and go ahead with the merger anyway.

Welsh, however, knew what was what. Doing the merger anyway would have been disastrous, because a merged GE-Honeywell would have been locked out of the EU market. A market that by anyone's measure is one of the largest single markets on the planet today. Without EU customers, a new GE-Honeywell shrivel and die on the vine. That, Welsh knew, gave the EU the right and the might to nix the merger.

This book is full of such examples of how the EU and the US diverge in many areas. So, when I read all of the hullabaloo about the proposed EU patent directive, I have to wonder how long this turkey is going to fly.

Opponents of the new patent laws have outright accused large corporations, especially Microsoft, of heavy lobbying to get these laws passed. Laws which many believe will give the EU a very US-looking patent system, especially for software. Personally, I don't doubt it for a minute. And, interestingly enough, it looks as if the pressure is being applied on individual nations rather than on the EU as a whole. This has allowed a key few to push legislation through that a majority of the EU does not want.

If I really wanted to try out the tin-foil hat, I would wonder aloud that it is indeed most curious that the loudest proponents of the patent directives, such as the UK and the Netherlands, are getting lots o' new MS desktops deals of late. If I wanted to try such a hat on, of course.

As a unified force, it is very clear that the EU is an entity to be reckoned with. I am personally hoping it shakes off all this divide-and-conquer lobbying and remembers that it has the political and commerical power to tell all these large corporations to take a flying leap. After all, it's happened before--faced with massive sanctions, Microsoft has already altered its desktop offerings to comply with EU will. Maybe not much, but a darn sight more than what the US could do.

It could be that proponents of the EU patent law are right when they say their new patent system won't go the way of the US'. I hope so, but I doubt it. If the EU can negate this proposal, not only will it put their citizens in a better position, but it could also lay the groundwork for eventual EU pressure on the US to get its patent system in order.

Sounds far-fetched? Try this on for size: In October of this year, the US repealed of the Extraterritorial Income (ETI) Credit. This was a tax break given to US companies who exported goods. Lots of nations protested this policy for years and the US basically ignored the concerns. Then the EU went to the World Trade Organization and filed an official complaint. The WTO ruled the ETI an illegal export subsidy.

When the US began stalling, the EU backed the ruling up with levied retaliatory trade sanctions on over 1,600 US products (incidentally aimed at products coming from states that were very important in the US presidential campaign).

Forced with trying to explain to their constituents the very real and very painful application of a sanction tariff that will reach the 14% mark by the end of 2004, House and Senate members very quickly pushed through a bill to repeal the ETI. The sanctions are scheduled to be lifted on January 1, 2005.

In essence, the EU had directly influenced US tax and export laws.

As a US citizen, it would not seem logical to applaude such tactics, but I'll do it anyway. I think everyone, whether one person or a massive nation-state, needs to have a friend who is not afraid to tell them when they are being an idiot. Such friendships are few and far between, but I know that when I have had such friends, I cherish them greatly. Sure, it's uncomfortable to hear criticism, and perhaps get slapped upside the head every once in a while. But getting good advice is always worth it, if you care to listen.

The US and the EU can be such friends: quarreling at times, cooperating at others. I am looking forward to the day when the EU's (and South America and Asia and Africa and so on) progressive embraces of open source technologies will be a lesson that the US will be more receptive to learn.