From Bubble to Beltway

According to the Wall Street Journal earlier this week, it seems those of us who believe in the benefits of free trade are losing the argument here in the U.S. It strikes me however that an upcoming event at the U.S. Chamber of Commerce on the economic opportunities afforded by increased U.S./E.U. trade may at least provide some of the antidote. If only we could get U.S. business and political elites to stop fixating on Asia and instead see the political and economic upside of a political reengagement with Europe on trade.

The Chamber event should hopefully build upon the case made by a study funded by the European Commission from 2009 that suggested that addressing actionable non-tariff measures  would result in benefits of €41 billion (USD 56.7 billion) per year for GDP and 6.1% for export for the United States.

Alas, despite the best efforts of the folks at the Chamber one has to feel a little bit despondent as a European in D.C. I have been to a number of E.U. focused think-tank events in recent months and have to report that you are lucky to find half a dozen students in attendance. Forget policy or business elites. One commentator I heard speak noted that the White House is the first in living memory not to have a natural reflex towards Europe as a continent, while another noted that he could count those business people interested in U.S./E.U. engagement on one hand. When speaking to committed free traders out and about, I have to remind them that their biggest trading partner is the E.U. not the Canadians. It’s all rather sad given the progress our project has made in the last fifty or so years.

A renewed focus post elections on removing trade barriers with Europe should be interesting for a number of reasons. The Commission study points to concrete measures that would result in concrete gains for the both economies. At a time when the American economy still needs a boost, such gains would surely be welcome on both sides of the Atlantic.

Politically, it would seem hard for even the most ardent opponent to argue that lowering trade barriers with Europe would lead to jobs being shipped overseas due to lower labor costs or poor environmental standards. Indeed, it would be interesting to see whether the White House would have an interest in working with Congressional Republicans post-election on this issue in order to slay some of its own party’s demons on free trade, as well as of course prove that it’s not anti-business and it is for economic growth. The increased exports forecast by the Commission study would of course help Obama’s own goal of doubling exports within five years.

There are clearly some challenges to be overcome. Firstly, Europeans need to realize that they have to make a public case here in the U.S. As the recent Transatlantic Trends study highlighted, the average American and the average European do believe they share values. However, the average American also believes the U.S. shares as much common interests with China as it does with the E.U. It will be interested to see what political elites think when the GMFUS releases its opinion leaders survey later this year. In any case, Europe has no automatic claim on American’s mind space, we’ve got to make the case that collaborating with Europe is in their interests more than collaborating with the Chinese or other parts of Asia.

Secondly, we still have a job to do in educating such elites on the European Union. Americans are still I think scratching their heads over the impact of Lisbon. If we don’t seek to explain the powers of and importance of our Union, the perception will be only of increased complexity of having three Presidents and increased powers to those pesky MEPs who veto sensible trans-atlantic data protection agreements.

Finally, the new European Union delegation needs to work hand in glove with trans-atlantic business in a concerted effort to put this issue on the agenda with opinion leaders, in the media and in Congress and with the Administration. I am not convinced any of the current fora, including the Chamber have the laser like focused required to do this job. A single issue coalition is required to give business on both sides of the Atlantic a true rallying point.

James