Anthony Luzzatto Gardner1
(1)
London, UK
Anthony Luzzatto Gardner
When I reflect on the direction of US-EU relations, my thoughts frequently return to a tale of two speeches delivered in the same city by two US secretaries of state: the first by John Kerry in early October 2016 and the second by Michael Pompeo in early December 2018.1 The speeches were both held at the Concert Noble, a historic building in the center of Brussels. Although both speeches dealt with the transatlantic relationship, they could not have been more different in style or substance.
I was in the front row for the first speech and had contributed to it. Secretary Kerry, in his last few months on the job, was passionate and humorous. During his speech and the question period, he impressed the audience of senior political and business leaders with his command of the subject matter. He demonstrated that he had been born to be Secretary of State and, thanks to his many years as chairman of the Senate Foreign Relations Committee and strong family connections to France, that he knows Europe intimately. I was not present at the second speech, but I saw the video and spoke to many who were. Secretary Pompeo delivered the speech in a rather brusque manner and did not stay for questions. According to the Financial Times, Pompeo left his audience “open-mouthed.”2
At my suggestion, Kerry referred to Belgium’s motto “L’Union fait la force” (unity makes strength) and to the US equivalent, “E Pluribus Unum” (out of many, one). He made a strong endorsement, as had so many of his predecessors from both political parties, of the EU and a strong US-EU partnership:
I cannot emphasize too strongly the twin propositions that unity within Europe, and partnership between the United States and Europe, remain absolutely indispensable to global security and prosperity…We should never take for granted the good that has been achieved by the unity of Europe.
In an oblique reference to the very different views of Donald Trump, Kerry argued that the United States acting alone simply cannot address all the world’s challenges without allies, including Europe, and the multilateral institutions that were shaped by the transatlantic community after World War II:
You can’t just sit here in Europe and we can’t just sit across the pond in the United States and somehow believe you can wall yourself off from the world. Not in today’s economy, not in today’s world, not in today’s marketplace, and not with today’s security challenges….
Kerry catalogued many of the achievements of the US-EU partnership, including the Paris climate change accords, the Iran nuclear deal, the implementation of biting sanctions on Russia and Iran, the cooperation in dealing with the Ebola outbreak in West Africa, and the coordination of foreign aid and humanitarian assistance. This book describes these and several other important areas of cooperation in some detail (Fig. 13.1).
Fig. 13.1
Ambassador Gardner and Secretary Kerry at Brussels airport in the Summer of 2016
(Source From author’s own collection)
Pompeo’s speech presented the opposite view of multilateralism and the European Union:
Multilateralism has too often become viewed as an end unto itself. The more treaties we sign, the safer we supposedly are. The more bureaucrats we have, the better the job gets done…Is the EU ensuring that the interests of countries and their citizens are placed before those of bureaucrats here in Brussels?…We aspire to make the international order serve our citizens – not to control them.
My successor, Gordon Sondland, thought that the speech was “very subtle.” I thought it contained grotesque cartoon-strip caricatures, including the suggestion that EU bureaucrats are placing their interests above those of EU citizens. Anyone with even a rudimentary understanding of the EU knows that its bureaucracy is hardly excessive, even compared to a single US government department (the Department of Veterans Affairs employs ten times the number of bureaucrats), that the EU is controlled by the member states and has increasingly become more intergovernmental, and that regulation comes about because the member states propose much of it and agree to all of it.
Sondland repeated similar caricatures of the EU. According to him, bureaucrats of the European Commission “are off in a cloud, regulating to their hearts’ content…” They are utterly obstructionist: “…if I ask someone at the EU what time it is, the answer is ‘no.’”3 His EU expertise stems from being the founder of an Oregon-based hotel group who contributed $1 million to President Trump’s inauguration through several limited liability companies.4
No US administration, democratic or republican, and no European country, has considered multilateralism as an end unto itself. None has ever believed that we become safer simply by signing treaties. None has ever wanted an international order to subjugate its citizens. Membership in international organizations and participation in an international rules-based order do not usually subtract from sovereignty. To the contrary, they often enhance it. In his speech, Pompeo paid fulsome tribute to George H. W. Bush, who had died a few days before, but I doubt very much that Bush would have agreed with a single word as he was a fervent believer in multilateralism. Before the Trump administration, US presidents and secretaries of state would have agreed with the closing statement of Secretary of the Treasury Henry Morgenthau at the Bretton Woods conference in 1944:
We have come to recognize that the wisest and most effective way to protect our national interests is through international co-operation — that is to say, through united effort for the attainment of common goals.5
The entire postwar system and its defining institutions—including the World Bank, the International Monetary Fund, and the World Trade Organization—are based on this foundation.
The contradictions in Pompeo’s speech were manifest. He exhorted every country to put its national interests first, just as in the United States, but suggested that every country would do best to simply follow the US lead. There was no explanation of why some rule-breaking by a few countries and occasional overreach by some organizations justified tearing down a multilateral rules-based system that has served the postwar world so well. He did not explain how a might-makes-right world in which every country fights according to the laws of the jungle will make anyone better off, including the United States. The suggestion that the Trump administration was breaking new ground by putting US interests first was insulting to prior administrations of both parties that clearly sought to do the same. The reality is that “America First” policies under this administration have usually meant “America Alone.”
Pompeo’s speech revealed the deep disdain for the European Union that has characterized the Trump administration at the highest level. This disdain may be based on the view that the EU is a minor player in the realm of military and security policy. That view reminds me of Stalin’s foolish question that underestimated the Vatican’s power: “How many divisions does the Pope have?” That was obviously the wrong question and it is obviously the wrong metric to judge the EU. The EU is not a superpower in the traditional sense, but in trade and in the regulation of certain sectors, especially data privacy and the digital economy, it is a world leader that sets global standards.
This “Brussels effect” will be a major phenomenon for many years to come. One recent study has found that nearly half of roughly 450 active legislative proposals across the world relating to antitrust, digital taxation, content regulation, access to data, and the breakup of technology firms originated with the EU or individual member states.6 The “Brussels effect” has recently been accentuated by a far more active regulatory approach in the EU than in the US toward competition law and merger control. Antitrust prosecutions, for example, have dropped significantly under the Trump administration. Scrutiny of the digital economy is also tougher in the EU.
Some officials in the White House appear to think that the EU is worse than a distraction: It is based on the illusion that countries can pool their sovereignty for the greater good. The EU, according to this view, is a nuisance because it magnifies the EU’s influence on the world’s stage, complicating the ability of the US to get its way. President Trump has said as much when he repeatedly describes the EU as a “consortium” set up by Germany to get its way in trade. Astonishingly, Trump has even described the EU as a “foe” and has said that it is “worse than China, just smaller.”7 This is the view of a property developer focused entirely on maximizing short-term advantage. This book describes how absurd that view is, even in the contentious area of trade.
The Trump administration’s disdain for the EU reflects a shocking degree of aggressive ignorance about the EU. In a lengthy article about the president’s “Trump doctrine” on foreign policy, former Deputy National Security Adviser for Strategic Communications and Speechwriting Michael Anton states:
Washington has encouraged its friends and allies to cede their sovereign decision-making, often to anti-American transnational bodies such as the EU…8
Anti-American? I doubt he has spoken to a fraction of the high-level EU executives that I have over many decades. Many have waxed emotional to me about how much the US has meant to them. Commissioner Andrus Ansip of Estonia, for example, would relate how he would eagerly listen to Radio Liberty and Voice of America when growing up under Soviet tyranny. Commissioner Vytenis Andriukaitis of Lithuania showed me mementos in his office relating to his involvement in the anti-Soviet underground. Like many others, the United States has been their North Star. I could point out dozens of other examples. Even Commissioner Margrethe Vestager, whom Trump has described as that “tax lady who really hates us,” is certainly not anti-American. There isn’t a shred of evidence to support the criticism.
In a line of argument that probably reflects the Trump administration’s view about the EU, Anton argued that the EU:
was a fraud from the beginning…it was sold to the European public on false pretenses: it was supposed to make travel easier and lower trade barriers and other costs of doing business across borders while allowing states to maintain their sovereignty and citizens their individuality. But if anyone had forthrightly told European voters that “Brussels is going to henceforth regulate the size and shape of your vegetables and dictate your immigration and border policies,” most would have instantly replied, “No, thanks.”9
These Alternative Facts would be accepted in some of the tabloid rags of the United Kingdom. Even a cursory reading of the Wikipedia entry for the EU, however, would reveal that this is just plain wrong. European integration was conceived in the aftermath of war, by the survivors of war to prevent further war. The EU has indeed made travel easier, lowered trade barriers and other costs of business. But not only: It has enabled generations to travel and study freely within the EU and it has made the EU more prosperous and secure in all the ways described in this book. That is why so many European countries have wanted to join (and why so many more are lining up to enter). Regulating the size and shape of vegetables is a tiny and absurd example that amuses more than it informs. Member states retain control of their borders, although the EU has been increasing its role (with member states’ support) in order to ensure that the EU has common policies to deal with migration flows.
In the weeks following the 2016 presidential election, I worried that the new president simply didn’t understand the EU. I worried that he was getting twisted advice about the desirability of Brexit from Nigel Farage, a demagogue whom I had frequently seen perform in the European Parliament. I was struck that in Trump’s first call with a senior EU official, European Council President Donald Tusk, Trump asked pointedly which country would follow the UK out of the EU and refused to believe Tusk when he said that none would. My worries were confirmed over time. The president appears to believe that Brexit was merely a manifestation of the desire to “take back control,” similar to his own campaign rhetoric about blaming foreign forces and unaccountable bureaucrats for all evils. Quite to the contrary, Brexit will prove bad news for the EU, the UK, and the United States itself for all the reasons stated in this book.
It rapidly became apparent that Trump didn’t only believe Brexit is great but that a rapid hard Brexit was desirable despite the mountain of evidence to the contrary. Robert “Woody” Johnson, co-owner of the New York Jets football team before being appointed as the US ambassador to the Court of St. James, has been an avid cheerleader for Brexit despite the fact that roughly half of the British public opposes it. Moreover, Trump has clearly sought to promote further exits in order to undermine the European Union. He has avidly courted the most euro-skeptic leaders in the EU member states, especially in Hungary, Poland, and Italy, while repeatedly insulting German Chancellor Angela Merkel and humiliating British Prime Minister Theresa May. No wonder that President Tusk took the historically unprecedented step of listing the United States as one of the key geostrategic risks facing the EU. Tusk told fellow EU leaders that thanks to Trump “we have got rid of all illusions. He has made us realise that if you need a helping hand, you will find one at the end of your arm.”10
The extraordinary anti-EU aggression from the Trump administration is one of the reasons why the EU is seriously concerned about a global context that is becoming more threatening and uncertain. As a result, European Commission president von der Leyen has described her Commission as “geopolitical.” She has noted that the EU “needs to be more strategic, more assertive, and more united in its approach to external relations.”11 The concrete manifestations of this new approach, as set forth in the European Commission’s policy program and instructions to the new commissioners, include the objective that the EU should strengthen its ability to act “autonomously” and promote its values and interests around the world. Moreover, the program of the European Commission is focused on enhancing Europe’s “technological sovereignty” and promoting investment in key industries through an industrial strategy. The creation of a new directorate-general for the defense industry and space is potentially significant. So is the intent to use whenever possible EU treaty clauses that allow certain decisions on common foreign and security policy to be adopted by qualified majority voting (rather than unanimity).
The words “sovereignty” and “autonomy” have rarely been uttered before in the hallways of the Brussels bureaucracy. Time will tell whether the European Commission can deliver on its promise of being more assertive in promoting its interests in a more challenging world. But if it does, Donald Trump can certainly take some of the credit. The European Coal and Steel Community, the precursor to the EU, was in part the legacy of Joseph Stalin. Could a more “geopolitical” EU be the legacy of Donald Trump?
That would not be the only irony. Despite his best efforts, Trump will fail to promote more Brexits. Indeed, Brexit and Trump himself have served as a mighty vaccine against euro-skepticism. Much of Europe is aghast at the dysfunction of the UK political system over the past few years, the decline in sterling and foreign direct investment, the possibility of Scottish secession, and the certainty that the UK will play a far diminished role outside the EU. Recent Eurobarometer polls show that support for the EU has gone up since the Brexit referendum as citizens fear the consequences of losing the advantages of membership. No EU member state is following the UK out the door. Even Brussels-bashing populists want to stay within the club. Although some populist movements, especially in Italy, strengthened their position in the much-feared 2019 European elections, the four leading centrist parties in the European Parliament largely retained their aggregate position of decisive influence.
The Trump administration’s policy of actively seeking the breakup of the European Union reminds me of the famous statement, often ascribed to Napoleon’s chief of police Fouché after the execution of Louis Antoine de Bourbon, Duke of Enghien: “C’est pire qu’un crime; c’est une faute” (it’s worse than a crime, it is a blunder). It is a blunder of historic proportions for all the reasons set out in this book.
The United States and the European Union have cooperated intensively, and should continue to do so, especially in the three areas that I have identified: commercial policy; security; and saving the planet. The nine specific policy chapters describe the important work we have done in trade policy, digital policy, and data privacy (commercial policy); military security, sanctions, energy security, and law enforcement (security); and climate change, foreign aid, and humanitarian assistance (saving the planet). My focus has been on the Obama administration because that is what I personally witnessed. But that work built on the achievements of prior administrations. Why on earth destroy this essential partnership?
There is no doubt that the exit of the United Kingdom will weaken the EU. Nearly every piece of analysis about the impact of Brexit on the EU and the US-EU relationship that the Obama administration prepared, and in which I was closely involved, has proven to be accurate. Shorn of the UK, the EU may be a less effective partner on sanctions policy, law enforcement, and military security cooperation because the UK has been such an important contributor to the EU in these areas, in both financial and intellectual terms. It will be harder for the United States to ensure alignment of interests with the EU on trade, digital policy, and data privacy without the UK remaining on the inside to promote an open, free-market approach that balances security with privacy. The United States will no longer be able to rely, as it has in the past, on the UK as a source of information and ally on the inside of the EU club. While it is true that the EU is getting rid of an ever-present pebble in its shoe and can now proceed faster in certain policy areas, the EU 27 will have lost a capable member that has provided leadership in key areas. Nonetheless, the partnership between EU and the US will remain critical to address many issues of regional and global concern.
My successor has defended the Trump administration’s new approach to the EU by claiming that it is a long-overdue focus on cutting deals rather than useless diplomacy:
We’re interested in substance and then resetting certain relationships between us that have gone completely out of balance, instead of coming here and taking nice photos and attending lovely soirées and allowing the underlying issues to fester.12
Perhaps my highly qualified predecessors and I failed to realize that we were waltzing from one cocktail reception and photo op to another, rather than doing any real work to promote US and shared transatlantic interests. History will judge what is real work that leads to results and what is empty sloganeering that is needlessly destructive.
In the area of trade, where I devoted a substantial portion of my time, the US and the EU have made significant progress liberalizing world markets through multilateral and plurilateral agreements. We failed to get TTIP over the line, to my great regret, but we did make progress and we prepared the ground for an ambitious agreement (or series of agreements) in the future.
President Trump likes to claim that the EU is highly unfair with the US in transatlantic trade. While there are indeed areas where the EU imposes significant barriers, especially in agricultural trade where the imbalance contributes to the overall trade deficit, it is of course absurd to suggest that the US doesn’t impose significant barriers of its own. Trump keeps repeating that the EU imposes a 10% tariff on imported cars, higher than the US 2.5% tariff on EU car exports. What he doesn’t mention is that the US imposes a 25% tariff on imported pickup trucks, whereas EU tariffs are far lower.
Trump’s obsession with the $168 billion merchandise trade deficit with the EU (in 2018) is also misplaced. As Dan Hamilton, one of the most experienced experts on the EU and transatlantic trade, has pointed out, “trade in goods, as even trade itself, is a misleading benchmark of international commerce.”13 The US surplus in services trade (especially digitally deliverable services) and US so-called primary income from foreign affiliate earnings as well as investment income earned in Europe more than offset the merchandise trade deficit.
When the Trump administration withdrew from the Trans-Pacific Partnership (TPP) and essentially abandoned TTIP, the net result was a setback for US farmers, ranchers, and manufacturing exporters who want to sell in global markets. Asian countries, including Japan and Vietnam, rushed to the EU to conclude free trade agreements because they felt abandoned by the United States and did not want to be left alone with China. Canada and the EU proceeded to conclude a deep and comprehensive free trade agreement as well. As a result, the members of TPP appear to have better access to Asian markets, including Japan,14 than their US counterparts and Canadian exporters have better access to the EU market than their US counterparts. Now how exactly does any of that advance US commercial objectives?
The EU’s power to negotiate trade agreements on behalf of its members naturally enhances its negotiating leverage, something that irritates the Trump administration. The president would much rather deal with each EU member state on its own to exert maximum pressure. When the president met German Chancellor Angela Merkel in the Oval Office in April 2017, he asked her ten times if he could negotiate a trade deal with Germany. Each time she replied that the US could only negotiate a deal with the EU. On the eleventh refusal, Trump finally got the message and replied: “Oh, we’ll do a deal with Europe then.”15 In a separate exchange with European Commission President Jean-Paul Juncker, Trump said he wanted to do a deal with him, not with the European Union. Juncker politely replied that a deal with him was a deal with the EU as the European Commission has sole responsibility for trade matters.16
The US and the EU should restart their transatlantic free trade discussions but based on the lessons outlined in this book’s chapter on trade. Seeking the fragmentation of the EU and repeatedly threatening it with tariffs on spurious national security grounds are misguided policies. They should also restart their work on sponsoring plurilateral trade liberalization, including the Trade in Services Agreement and the Environmental Goods Agreement discussed in chapter 4.
A US-UK free trade deal is desirable, but it will not be quick or easy and it should not come at the expense of a far more meaningful US-EU deal. A US-UK agreement will be burdened by many of the same obstacles as in the latter. Even if one is signed, it is highly likely that the UK will not get as favorable terms as the EU would get in a US-EU deal because of the UK’s diminished leverage. And it may have to “pay” for the agreement by aligning itself with the United States on a host of issues unrelated to trade. The UK may be desperate to show it has an alternative to the EU, but it should also be realistic about the chances of a real estate developer being sentimental about the special relationship. The Trump administration’s threats to impose arbitrary import tariffs on UK exports if the UK implements a digital services tax is just one sign of how the relationship could become turbulent.
The Trump administration has quite rightly increased the focus on unfair Chinese trade practices. But it makes no sense that the United States has failed to engage with the European Union on reforming the WTO and jointly pressuring Beijing to play by the rules. Although the United States probably agrees with the vast majority of the EU’s very specific proposals for WTO reform, it has preferred to deal with China alone outside the WTO. The administration does not appreciate that together we would be far more effective in dealing with China and that changes in trade rules promoted by both would have far greater legitimacy.
I have greater sympathy for the view, exploited brilliantly by the Trump administration, that world trade rules have failed to work for the middle class. Global trade liberalization has generated enormous prosperity and is often unfairly blamed more than technology and automation for causing job losses (especially in the manufacturing sector) and wage stagnation. Nonetheless, global elites, including on both sides of the Atlantic, have failed to plan for the trauma that has accompanied the benefits of trade. The anger felt by middle-class voters about free trade is real and needs to be addressed. I was reminded of this by some fan mail I received several minutes after appearing on CNBC in April 2019 in which I criticized Trump’s threatened tariffs on the EU:
Your traitorous support of asshole Europeans has come at the expense of (me) poor and middle class Americans (there are very few middle class Americans left due to traitors like you)…f you. The great US has been supporting the turds in Europe for decades…Europeans have been eating our lunch for decades…unfair and illegal trade practices (on their part)..and their refusal to contribute to their OWN EUROPEAN DEFENSE…fuck Europe and fuck people like your traitorous ass that like to contribute to their unfair shit…
My fan was shooting at the wrong target, of course. Trade and Europe are not the enemy. As many Presidents (even before Trump) have stated, Europe has indeed been a free rider of the US security guarantee for far too long and many successfully nudged some European states to do more. The point remains valid even in light of the fact that Europe has shouldered more burdens than the United States in other areas, such as climate change and immigration.
A major focus for US-EU cooperation in the future should be on ensuring that the spoils of trade are shared more equitably. The case for free trade will continue to be challenged if the lion’s share of benefits accrues to the already prosperous and well educated, while blue-collar workers continue to fall behind and suffer from economic anxiety. In the mid-1960s, male high-school graduates in the United States were about as likely to be in the workforce as college-educated men and were earning slightly less than the latter; half a century later, high-school graduates had fallen substantially further behind.17 While social welfare systems in Europe have prevented income inequalities from rising as fast as in the United States, the European middle class has experienced, like the American middle class, far more serious wage stagnation in the decade ending 2014 than in the prior decade. President Obama eloquently captured the challenge in an Address to the People of Europe in April, 2016:
…the economic anxieties many feel today on both sides of the Atlantic are real. The disruptive changes brought about by the global economy, unfortunately, sometimes are hitting certain groups, especially working-class communities, more heavily. And if neither the burdens, nor the benefits of our global economy are being fairly distributed, it’s no wonder that people rise up and reject globalization. If there are too few winners and too many losers as the global economy integrates, people are going to push back.18
It is no good preaching the gospel of trade’s wealth creation when job losses are visible and concentrated. It may be unfair to point to Chinese imports as the scapegoat, but they have unquestionably played a major role. According to one study, they eliminated nearly one million American manufacturing jobs from 1999 to 2011 (the figure rises to 2.4 million if suppliers and other related industries are taken into account).
The rich world has neither dedicated the resources nor the effort to cushion the blow from globalization and free trade. Members of the OECD set aside an average of only 0.6% of GDP per year on “active labor-market policies” such as job centers, retraining schemes, and employment subsidies to ease transition to new types of work. The United States spends just 0.1% of its GDP on such policies.19 Its Trade Adjustment Assistance Program, dating back to 1962, is underfunded, complex, and ineffective. With a modest budget of about $1 billion per year, it pays for retraining of workers who lose their jobs because of foreign competition. But that retraining is too often ineffective as it does not translate into marketable skills: Workers remain jobless or with lower incomes than those who signed up for unemployment benefits and looked for other work.20
Every other major economy spends at least twice as much on national trade adjustment assistance programs as the United States. France and Germany spend five times as much, while Denmark spends 20 times as much. Although Britain’s economy is about twice as exposed to foreign trade as that of the US, it provides almost no assistance to those displaced by globalization and trade.21 Its “rapid response service,” with the princely budget of several million pounds per year, can’t provide much training and support in the case of mass redundancies. This insouciance has real-world effects, as made patently clear in the Brexit referendum, results where those regions most exposed to Chinese competition had the highest percentage of voters seeking to leave the European Union.
The EU’s Globalisation Adjustment Fund has a budget of just €150 million for the period 2014–2020 and is rather limited in scope, especially as it can only be applied in circumstances where over 500 workers are made redundant by a single company or if a large number of workers are laid off in a specific industry or region. EU member states can’t continue to expect the European Commission to promote trade liberalization without also giving it a proper budget to provide a safety net on a pan-European basis.
The US and the EU should cooperate, preferably on a multilateral basis, to crack down on multinationals’ tax avoidance; negotiate with China agreements to correct significant Chinese overcapacity in key products such as steel; and cooperate at the WTO to attack unfair trading practices, especially by China, including the theft of intellectual property and continuing restrictions on Chinese market access. Both the US and the EU have an interest to ensure that their systems for screening foreign investments prevent the acquisition of strategic technologies that can lead to the loss of security or long-term competitiveness. Governments need to convince the public that protection is legitimate, while protectionism is self-defeating and the first is possible without the second.
While trade is a hugely significant feature of US-EU relations, this book’s section on commercial issues also addresses two other important aspects: data privacy and the digital economy. The Trump administration has fortunately protected the achievement of the Privacy Shield Agreement. But numerous legal challenges before EU courts to various means of transferring personal data from the EU to the US may mean that further intensive work will be necessary to ensure data flows may continue without endangering the important work US intelligence services do to protect citizens on both sides of the Atlantic. The US and the EU will need to continue collaborating intensively to ensure that their high standards of data privacy are as similar as possible and that they become de facto global standards. While pursuing the necessary goal of data protection, both sides must avoid data protectionism. The latter would stunt innovation and global growth, as well as give authoritarian regimes all over the world further excuses to build national data fortresses.
Similarly, as a vibrant economic area with many of the world’s most innovative companies and over 800 million sophisticated consumers, the US and the EU have a joint interest in continuing their collaboration on the digital economy. We don’t know what new technologies will develop in the coming years. We do know, however, that how we coordinate now on these issues will determine whether we end up building incompatible regulatory frameworks that stunt growth or instead are able to harness the promise of new technologies for the good of Americans and Europeans alike.
The US should join with the EU, as it has proposed, to counter Chinese attempts to define the technologies of the future. Such an alliance would focus on pooling research in such areas as robotics, 5G technology, the Internet of Things, artificial intelligence, nanotechnology, 3D printing, and self-driving cars—all critical to maintain transatlantic economic competitiveness. Together the US and the EU can set global standards in these and other areas; if each goes its separate way, the Chinese will do so. That is clearly their intent, as evidenced by their growing influence in bodies such as the International Telecommunication Union and the International Organisation for Standardisation that set technical criteria for new products and technologies.
As we harness the opportunities of digital disruption, the US and the EU will also need to focus on addressing the challenges, including to our labor markets, our tax base, and our middle class. The consequences of each side pursuing different, and perhaps incompatible, approaches in its competition policy and taxation rules respecting the digital economy would be extremely negative. While the US has legitimate concerns about discriminatory digital services tax regimes being introduced in the EU, it should continue to work within the OECD to achieve a global compromise or, failing that, it should bring a complaint to the WTO rather than impose unilateral sanctions.
This book’s section on security covered areas where the US and the EU work together to improve their mutual security. In addition to cooperating with many EU member states on law enforcement issues, the United States should continue to reinforce its cooperation with Europol in the many areas detailed in this book, including online child sexual exploitation, human smuggling, drug and weapons trafficking, and terrorism. Fortunately, the Trump administration has seen the value of this cooperation, despite its disdain for the European Union. A key next step will be for the US and the EU to negotiate an agreement enabling law enforcement authorities on either side of the Atlantic to request internet service providers on the other side to provide electronic evidence necessary in criminal investigations (subject to due process safeguards and data protection requirements).
Moreover, military security cooperation should continue as long as the EU’s military missions are complementary to, not competitive with, NATO’s role. That has certainly been the case, especially in Africa, as this book has argued. There is almost no indication that the EU’s future ambitions in this area will be any different. With Britain’s departure from the EU, the US concern should be that the EU will have insufficient means to provide security in its neighborhood, not that it will be too autonomous.
The US and the EU should continue to work together on promoting European energy security for the good of Europe and the United States. Washington should not allow the short-term goal of promoting exports of LNG to dominate the far more important objective of minimizing European over-reliance on Russian gas. Gazprom’s plans, including the completion of the Nord Stream II pipeline, represent a continued threat in this regard, notwithstanding the important achievements in recent years to diversify energy sources and import routes. New sources of gas, especially in the Mediterranean, need to be brought to European markets as quickly as possible. By providing appropriate political and economic conditions, the US and the EU can ensure that this happens.
Future crises will require that the US and the EU continue to impose and implement tough sanctions programs, just as they have done so successfully in the cases of Russia and Iran. While there is no doubt that the US can inflict pain even when acting unilaterally, as is clearly the case currently in its sanctions program against Iran, past history suggests strongly that sanctions are only effective in the long run if implemented in coordination with allies and when they enjoy widespread international legitimacy. Short-term efforts by the United States to exploit the role of the dollar and its predominant role in the international financial system yield tactical advantages, but at the risk of undermining US leverage in the long term as non-dollar payment systems and alternatives to the SWIFT secure financial message service evolve.
Finally, the US and the EU are natural partners in their ultimate goal of saving the planet. As the largest providers of humanitarian assistance and foreign aid, it is imperative that they continue to coordinate their policies to relieve suffering and promote sustainable development in the developing world. If they do not, they will waste money and perhaps even pursue incompatible goals. Cooperation in these areas is crucial to address the risks that poverty and climate change will unleash even more terrorism and mass migration that will strain our democratic societies. The ability of the US and the EU to come together to achieve an ambitious outcome at the Paris climate change accords, and their continuing collaboration in many areas of environmental protection, including the protection of endangered species and the oceans, demonstrate what they can achieve.
It is doubtful whether the EU and progressive forces in the United States, including some states, cities, and businesses, can ensure the implementation of the goals in the Paris climate change accords if the US federal government remains unengaged and Chinese emissions rise (as they are projected to do by 2.6% in 2020). The Von der Leyen Commission has committed to a Green Deal for Europe that will include a 2030 goal of cutting emissions by 55 per cent and enshrining carbon neutrality by 2050 into EU law. But these measures are not enough by themselves. In light of the alarming signals that the earth’s atmosphere is warming at an increasingly rapid pace, with potentially irreversible and catastrophic consequences for the human race, it is essential for the US and the EU collaborate once again to combat climate change, as they did so effectively under the Obama administration.
There is so much more the US and the EU could be doing beyond the areas described in this book. For example, both sides are engaged in ambitious programs to improve our knowledge of the human brain. Researchers on both sides of the Atlantic are seeking to map and simulate the human brain in order to improve the diagnosis and prevention of brain disorders. Although they are regularly keeping each other informed of their objectives and progress, there is ample scope for them to be working together under a common program to avoid duplication and ensure faster progress. Similarly, both the US and the EU are engaged in ambitious programs to combat the growing global threat of antimicrobial resistance. Current trends suggest that drug-resistant infections will spread widely over the coming decades if we do not curb the use of antibiotics and accelerate the pipeline of new antimicrobial drugs.
Less concretely, but just as importantly, the US and the EU need to work together to preserve open, liberal societies that respect human rights and democracy. In order to do that, we need to work on preserving “the topsoil of trust,” in the words of Tom Friedman. Without trust in institutions, nothing can grow. Vladimir Putin has predicted that liberal values have become “obsolete” and have “outlived their purpose.”22 We must prove him wrong.
Populist demagogy on both sides of the Atlantic is promising attractive sound bites but no solutions to our common challenges. Democracy risks dying in darkness as politicians brazenly feed the voters “alternative facts.” The United States and the United Kingdom, two of the world’s oldest parliamentary democracies, are in serious crisis. Like the third generation in Thomas Mann’s novelBuddenbrooks, the US and the EU are at risk of forgetting the virtues of their ancestors and gambling away their precious inheritance. If we do that, autocratic regimes around the world, including China and Russia, will increasingly shape the values and set the rules for the future. As Benjamin Franklin was reported to have said at the signing of the Declaration of Independence: “We must, indeed, all hang together or, more assuredly, we shall all hang separately.”
In this age of social media and politics as entertainment, it seems fitting to end with some tweetable summaries of this book’s arguments: The postwar multilateral system deserves protection; as 60 years of bipartisan US foreign policy have shown, the US and the EU are essential partners; if they want to go far, not just fast, they must go together; they have an opportunity to continue setting global rules for trade, privacy, the digital economy, protection of the environment, and so much else; our destinies are intertwined. A song by Joni Mitchell puts it succinctly: “Don’t it always seem to go / That you don’t know what you’ve got till it’s gone?”23
Footnotes
1
https://2009-2017.state.gov/secretary/remarks/2016/10/262750.htm and https://ua.usembassy.gov/remarks-by-secretary-pompeo-at-the-german-marshall-fund/.
2
Editorial Board, “Mike Pompeo’s Threadbare Defence of US Leadership,” Financial Times, December 2, 2018. https://www.ft.com/content/93946f66-f964-11e8-8b7c-6fa24bd5409c.
3
David Herszenhorn, “Trump’s Man in Brussels Slams ‘Out of Touch’ EU,” Politico, December 10, 2018. https://www.politico.eu/article/trumps-man-in-brussels-slams-out-of-touch-eu/.
4
https://www.nbcnews.com/politics/donald-trump/donors-trump-inaugural-committee-got-ambassador-nominations-are-they-qualified-n990116.
5
Martin Wolf, “Bretton Woods at 75: Global Co-operation Under Threat,” Financial Times, July 10, 2019. https://www.ft.com/content/e82a1f48-a185-11e9-a282-2df48f366f7d.
6
Madhumita Murgia, “Europe a ‘Global Trendsetter on Tech Regulation,’” Financial Times, October 30, 2019.
7
https://uk.reuters.com/article/us-usa-trade-eu/trump-says-eu-treats-u-s-worse-than-china-does-on-trade-idUKKCN1SN2FJ.
8
Michael Anton, “The Trump Doctrine,” Foreign Policy, April 20, 2019. https://foreignpolicy.com/2019/04/20/the-trump-doctrine-big-think-america-first-nationalism/.
9
Michael Anton, “The Trump Doctrine,” Foreign Policy, April 20, 2019.
10
https://www.consilium.europa.eu/en/press/press-releases/2018/05/16/remarks-by-president-donald-tusk-ahead-of-the-eu-western-balkans-summit-and-the-leaders-agenda-dinner/.
11
https://ec.europa.eu/commission/sites/beta-political/files/mission-letter-josep-borrell-2019_en.pdf
12
Demetri Sevastopulo and Guy Chazan, “US Rift with Europe Widens Ahead of Orban Visit,” Financial Times, May 12, 2019. https://www.ft.com/content/c17089f0-748f-11e9-be7d-6d846537acab.
13
Dan Hamilton, “Transatlantic Policy Impacts of the U.S.-EU Trade Conflict,” Testimony to the Subcommittee on Europe, Eurasia, Energy and the Environment of the Committee on Foreign Affairs, U.S. House of Representatives, June 26, 2019. https://transatlanticrelations.org/wp-content/uploads/2019/06/HFAC-US-EU-testimony-June-26-2019-dh-final.pdf.
14
As this book was going to press, the US and Japan were in the process of finalizing a partial trade deal that appears to open up Japan’s agricultural market to US goods in exchange for some cuts to US industrial tariffs.
15
James Dean and Bruno Waterfield, “Trump Puts EU Ahead of Britain in Trade Queue: Merkel Lands Brexit Victory for Brussels,” The Times, April 22, 2017.
16
Interview by Der Spiegel of President Jean-Claude Juncker, November 1, 2019. https://www.spiegel.de/international/europe/interview-with-eu-commission-president-jean-claude-juncker-a-1294486.html.
17
By 2014, 83% of male high-school graduates were in the workforce, against 94% of those who finished college; they were also earning 60% of what college-educated males were earning. “Coming and Going: Truth and Myth About the Effects of Openness to Trade,” The Economist, October 1, 2016. Statistics from a report of the Council on Economic Advisers.
18
https://obamawhitehouse.archives.gov/the-press-office/2016/04/25/remarks-president-obama-address-people-europe.
19
“Coming and Going,” The Economist, October 1, 2016.
20
“More Wealth, More Jobs, But Not for Everyone: What Fuels the Backlash on Trade,” The New York Times, September 28, 2016. https://www.nytimes.com/2016/09/29/business/economy/more-wealth-more-jobs-but-not-for-everyone-what-fuels-the-backlash-on-trade.html.
21
Edward Alden, “How to Help Workers Laid Low By Trade – And Why We Haven’t,” PBS, November 16, 2016. “How to Help Workers Laid Low by Trade,” “Collateral Damage,” The Economist, July 30, 2016. The budget of Britain’s trade adjustment assistance program in 2012 was a pitiful £6 million. Only 15% of those on unemployment benefit receive any sort of training.
22
Lionel Barber, Henry Foy, and Alex Barker, “Vladimir Putin Says Liberalism Has Become ‘Obsolete,’” Financial Times, June 28, 2019. https://www.ft.com/content/670039ec-98f3-11e9-9573-ee5cbb98ed36.
23
Big Yellow Taxi. Lyrics @Sony/ATV Music Publishing LLC, Crazy Crow Music/Siquomb Music Publishing.