Grounds for a European global strategy

Barack Obama’s support for a transatlantic free-trade agreement (TAFTA to us, TTIP to them) was widely welcomed as a boost to the EU. Yet, some pro-Europeans have since been quick to play it down. This may seem like an odd reaction, but the raw sense of relief that met the President’s February speech has worried them.

The TAFTA initiative was instinctively greeted as a means to anchor the US to Europe, to improve the EU’s resilience to globalisation and to trounce the Chinese – as a silver bullet, in other words, for an EU that is struggling to sustain itself. Fans of the EU are concerned that the bloc’s standing is being undermined.

They counter that the US doesn’t need anchoring in Europe. Its refocus towards Asia is designed to be in the EU’s interest as well its own, and its predicted energy self-sufficiency doesn’t amount to energy independence, meaning Washington will remain involved in the EU’s unstable neighbourhood if only to influence energy prices.

They also suggest that TAFTA is not just a distant prospect but a tough one. Tariffs are already low, meaning that progress will require the tricky harmonisation of regulatory regimes. And, although this will bring an aggregate economic boost (especially to the US, according to the latest projections), few individual employers will actually feel the difference, except perhaps in the form of increased competition.

As for the Chinese – why seek to trounce them? By some measures China is already the EU’s major trading partner, and its burgeoning middle class consumes just the kinds of unnecessary goods and services Europeans now specialise in. China’s stagnation not its economic rise is the real threat.

Well maybe. But if TAFTA remains so appealing, it’s because nobody has actually shown that the EU could flourish without it. Playing down the potential benefits of the agreement or the severity of the international situation is not the same as demonstrating that the EU has a realistic global strategy of its own.

Confidence in the EU’s capacity to hold its own internationally was not always this low. The long period of navel-gazing from the Constitutional Treaty to the euro crisis appears to have obscured an important fact: that the very point of the EU is its ability to handle international change.

The EU was established to balance out shifts in big power relations. Its internal policies – the single market, passport-free travel area, currency cooperation – allowed mistrustful West European states to cohere around common values and goals in the face of the Soviet threat. And, following the collapse of the USSR and the replacement of bipolarity by unipolarity, it was again the EU that provided the means for Europeans to accommodate newly-independent eastern states in the form of enlargement and neighbourhood policy.

Enlargement and neighbourhood policies were an important prong in the EU’s efforts to manage the ensuing wave of globalisation too, bringing close competitors under the bloc’s ambit. As part of this effort, the EU also became the first mover on issues from data protection to social-security coordination, inspiring international standards; it concertedly supported global institutions as a way to bind others; and, through redistributive policies such as development aid or the Social Funds, it weakened resistance to globalism amongst its discontents.

More recently, the EU has stretched to meet the challenge to global rules posed by emerging powers. Today’s hegemons tend to be of the regional variety. That means that they can ignore global norms and dominate the countries around them but lack the reach to solve bigger international problems like trade or the environment. In regionalism, the EU provides a possible answer, binding such countries into a local cooperative regime and using region-to-region cooperation to solve the bigger issues.

Of course, these approaches badly need adapting to take into account the EU’s recent weight-loss, the anachronistic overrepresentation of its members in global institutions, and the fact that the Union is a mere regional organisation in a globalised world. TAFTA and a strengthened transatlantic relationship could help the EU carry out that shift.

To achieve this, the EU would have to work hard to ensure that TAFTA negotiations involve the WTO at an early stage, are open and transparent to other states, and at the same time provide something of a gold standard for other regional trade regimes. In its current mood, however, this seems unlikely.

Today, the EU risks using any transatlantic trade agreement to cling to an outdated vision of unipolarity, to avoid integrating new powers into the international order, and to cement regionalism as a form of protectionism rather than international cooperation. In other words, the time for a strategic conversation is ripe.

  1. #1 by Marc on March 4, 2013 - 9:09 pm

    As long as the French are clinging to the outdated CAP, don’t expect any change from the Eurosoviet Union.

  2. #2 by jon livesey on March 4, 2013 - 9:40 pm

    This is an interesting analysis of the raison d’etre of the EU, but it really illustrates how many begged questions lurk inside the EU. It also illustrates the difference between saying something exists “to” do this, that and the other, and the question whether it actually *can* do those things.

    For example: “…it was again the EU that provided the means for Europeans to accommodate newly-independent eastern states in the form of enlargement and neighbourhood policy.”

    Well, haven’t we been here before? When the Russian and Austrian Empires collapsed in 1917-18 a host of new small independent countries appeared, and the League of Nations was set up to “accomodate” them, but within 20 years the big beasts started to move in the forest and one by one they were swallowed up.

    And what’s that, you say? the League proved incapable of defending its members? OK, and you think the EU can?

    So maybe we’d better stay away from Grand Strategy and concentrate on trade policy, where the EU is going to present the World with a “Gold Standard”.

    Well, in the first place, this supposed Gold Standard gets trade all mixed up with some sort of federalist slop. I don’t think we want to aim for a World in which trading with Korea encourages Korea to try to set your food standards or work week.

    But perhaps more important, the EU is busy inventing wheels that were invented long ago. The WTO already exists, and is sometimes successful in achieving trading round agreements.

    Of course the WTO is sometimes not successful, but do we imagine that if all the main trading countries can’t agree to a trade round sitting in the same room, somehow the EU will inspire them to be more reasonable by its own example? Wouldn’t that require the EU itself to be a bit reasonable?

  3. #3 by Hilda on March 4, 2013 - 11:33 pm

    Noam Chomsky call this book “Economics in real world.” Book was written by Korean profesor of economics at Oxford Mr Chang: Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism.

    You will not miss money for this book, or money back guarantee. He explains everything about globalization and Unholy Trinity: WTO,IMF and World bank.

    Look at car. You have car broken but you do not undrestand how system worx. So you must call mechanic to fix it. We all thing, even professor Chang in the book said couple times how he was mislead while study, that we know because they tought us in school. Wrong. They just tought us everything what is good for them to keep status quo.