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This is the first in a series of blogs, entitled “Transatlantic Business Works,” focused on the many possibilities to deepen transatlantic ties. Each blog will focus on issues — including the digital economy, life sciences, sustainable development, trade, and security — where U.S.-EU collaboration would benefit businesses and consumers on both sides of the Atlantic, and where failure would have serious consequences. This month, we’re focusing on aspects of the European Commission’s ambitious agenda for 2020.
This week new EU Trade Commissioner Phil Hogan is visiting Washington, D.C. and meeting with U.S. Trade Representative Robert Lighthizer and several other Administration officials, as well as leading policymakers on Capitol Hill. This visit emphasizes that now is the time to lower the temperature in our currently overheated relationship and focus on opportunities that will benefit companies, consumers, and workers on both sides of the Atlantic.
The European leadership team has changed, which represents an opportunity for a fresh start. Ursula von der Leyen, the first woman to lead the European Commission, and her team are working alongside a more politically diverse European Parliament and a European Council of member-state leaders that has also seen notable change in recent months. The EU is also preparing for the departure of one of its largest and most influential members, the United Kingdom.
Europe’s relationship with the U.S. remains the cornerstone of its security — and transatlantic trade and investment ties constitute the most important bilateral commercial relationship on Earth. More than 16 million jobs on both sides of the Atlantic are supported by two-way investment or rely on the $3.75 billion in two-way trade that crosses the ocean each and every day. This relationship, based on shared values of free enterprise, respect for the rule of law, and market competition, has benefitted both Americans and Europeans.
Today, that relationship is being tested on multiple fronts, both commercial and geostrategic. There are major divergences on climate policy, digital taxation, foreign policy, and the efficacy of international agreements and institutions. Yet there are also remarkable opportunities to deepen transatlantic commercial ties, and the U.S. Chamber of Commerce is at the forefront of those efforts.
The U.S. Chamber recently released a report outlining priorities to strengthen the relationship and to ensure Europe remains attractive to investors and exporters alike.
President von der Leyen has dubbed hers a “geopolitical” Commission, and Europe is eager to advance an agenda for economic, technological, and security “sovereignty.” How this is defined is of utmost importance. If the EU opts to wall itself off from global competition or international markets — if it restricts international data flows, limits defense cooperation efforts, boosts “national champions” of industry, or discriminates against non-European actors — the negative long-term effects will be substantial. An inward-looking protectionist agenda that tries to enhance Europe’s strengths at the expense of others would undermine its own growth and innovation prospects and further weaken the fractious EU-U.S. relationship. This outcome must be avoided.
Tearing down barriers to commerce has been a central element in the European project for decades. EU leaders have forged a single market of 28 national economies, negotiated new trade agreements as a single entity, and created a platform for international cooperation on regulatory, tax, health, and defense policy. Advancing Europe’s “four freedoms” — the free movement of goods, services, capital, and people across national borders — has helped ensure peace and prosperity across an entire continent of more than 500 million people.
It is essential that the EU and the U.S. recommit to an ambitious agenda to remove tariff and non-tariff barriers. Both Brussels and Washington need to step away from the rhetorical cliff-edge and recommit to finding innovative solutions that yield shared benefits. For Europe, this should include strengthening the Single Market, including for services and the digital economy, in ways that avoid discrimination against American firms that invest and create millions of jobs in Europe; promoting fair competition; and pursuing a balanced sustainable development strategy that responds to the challenge of climate change while promoting jobs and growth.
On trade, both sides have work to do. The U.S. should step back from ill-founded tariffs on steel and aluminum imports from Europe — which is not the source of the global overcapacity in production of these metals —a nd its ill-conceived threats to impose tariffs on imports of autos and auto parts from the EU. The EU, for its part, should make a renewed effort to “walk the walk” when it comes to its professed adherence to international trade rules, including on digital services taxes and respect for World Trade Organization rulings. Negotiating an end to subsidies in the civil aircraft sector — as both parties have said they would like to do — would be a good place to start. Strengthening opportunities for small and medium-sized companies is also critical.
Joint efforts on workforce development initiatives should be reinforced to promote sustainable prosperity across both economies. Finally, only through open and honest engagement across the Atlantic — along with other key partners like Japan and Canada — can the U.S. and EU effectively address China’s unfair trading practices; enhance cybersecurity; and reinvigorate the World Trade Organization.
Europe and the U.S. are stronger when we work together. Business is ready to contribute to a positive agenda to generate jobs and growth on both sides of the Atlantic.