Reset, refresh, rekindle: for a new approach to the transatlantic relationship

Opinion by Susan Danger, CEO, AmCham EU

As from 20 January 2021, President Joe Biden has taken office as the 46th President of the United States. The election itself saw the greatest voter turnout in the history of the US. This was an important reaffirmation of democracy. In the aftermath of this most fiercely contested election, the shocking and disturbing scenes from the Capitol Building on the day of the certification of the election results will serve as a reminder to President Biden that his principal task must now be to unify the country, alongside mapping the path to recovery from the COVID-19 pandemic.

News
19 Jan 2021
Transatlantic
Reset, refresh, rekindle: for a new approach to the transatlantic relationship

Beyond the domestic political arena, another area where unity must prevail is in the transatlantic relationship. Under strain since the negotiations on a Transatlantic Trade and Investment Partnership (TTIP) ended in stalemate, tensions have flared and threats of tariffs have foreshadowed cooperation. As CEO of the American Chamber of Commerce to the European Union, I call on the US and the EU to use the new presidential term as an opportunity to ‘reset, refresh and rekindle’ the transatlantic agenda.

Reset transatlantic relations

With President Biden now at the helm, both sides must seize the chance to reset the relationship and focus not on that which divides us, but that which unites. The EU-US economic relationship supports 16 million jobs on both sides of the Atlantic. It is worth one third of global GDP and accounts for half of global personal consumption. It is the largest economic relationship in the world. Both sides can surely agree that now is the time to dial back the adversarialism in favour of constructive proposals to rediscover common ground. The EU and the US should seek out sectors where barriers to trade and investment can be stripped away relatively easily (ie, manufacturing). The limited tariff reduction agreement concluded over the summer is a good example of avenues to advance a positive agenda. Both sides should certainly continue to seek opportunities to cooperate on emerging issues (ie, artificial intelligence) where they can lead the way in setting global standards. A high-level EU-US summit early into the new administration’s term would set the tone, by sending a message that both sides consider this partnership a priority.

Refresh multilateralism

Across the world, there has been a trend in recent years towards policies that put domestic interests first. However, prioritising the domestic at the expense of the international is short-sighted in the interconnected and globalised economy that we have built. In the face of common problems, including a global pandemic, or a climate crisis, no nation can absolve itself of its responsibility to engage with the wider world. For global challenges, we need global solutions – and to find such solutions, we require multilateral fora. As a business community, we agree that multilateral institutions such as the World Trade Organization (WTO) are imperfect in their current form. These institutions must be refreshed in order to make them fit for purpose in the twenty-first century. The US must engage constructively from within these institutions and alongside its partners and allies in Europe and beyond to shape this modernisation process. A good first step would be to resolve the stalemate surrounding the appointment of the WTO’s next Director-General.

Rekindle EU-US leadership

The EU and the US are bound by a common history, common democratic values and a sense of common destiny. Throughout their common history, Americans and Europeans have stood shoulder to shoulder to fight for a better future. In the current context, our societies face a host of new challenges. A geopolitical challenge in the form of China; an existential challenge by way of the climate emergency, and the need to adapt our economies to cleaner and more sustainable living; and a technological challenge as the digitalisation of our economies and societies becomes ever more far-reaching. The EU and the US must work together to coordinate their approach to these societal challenges. Together, they can use their combined economic weight to set global standards. Together, they can leverage their common democratic values to shape global governance structures. Together, they can lead the fight for a more sustainable and more prosperous future. Now more than ever we must rekindle EU-US leadership, lest rival geopolitical powers step in to fill the void.

As American businesses invested in and committed to Europe, we want to see the strongest possible transatlantic relationship. This is good for business; it is good for citizens; and it is good for our societies. A strong, outward-looking transatlantic relationship is the lynchpin to a prosperous and deeply interconnected global economy. The EU’s recently published proposal for ‘a new transatlantic agenda for global change’ recognises that the new US administration represents an opportunity to reset, refresh and rekindle our relationship. Each side must grasp it with both hands.

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On Saturday, 4 July, the US marks 250 years as a nation built on the right to life, liberty and the pursuit of happiness. As Americans at home and abroad celebrate this important milestone, it is an apt moment for Europeans to reflect on their own role in the story of the US. From having shaped the political ideals that are at the heart of modern democracies to becoming a global technological and cultural force, the EU and the US can be proud of all that our shared history has inspired across the world.

This relationship is underpinned by the $9.8 trillion transatlantic economy and the 16 million jobs it supports. However, it was never a given that the ‘Old World’ and the ‘New World’ would forge the largest, most consequential economic relationship on earth. There were periods when wars, economic crises and political shifts kept Europeans and Americans from seeing eye to eye. Yet over time, Europe and the US ultimately found ways of moving forward together, united by aligned interests and shared goals for the future.

Over the centuries, what we achieved together reflects the work not only of political leaders but of ordinary, enterprising citizens, who started businesses and expanded their horizons. They were essential to building the partnership, one transaction and one contract at a time. If we were to rewind to 1776, business owners from Boston and Philadelphia to Berlin and Paris would be familiar with some of the challenges transatlantic business currently faces: shifting policies, supply chain disruptions and uncertainty about what comes next. What might surprise them, however, is the sheer depth and breadth of the partnership in 2026 and its impact on not only Europe and the US but the rest of the world.

The depth of the economy

In the 18th century, crossing the Atlantic took weeks, often making the ocean more of a barrier to trade than a link. ‘Trade’ meant raw and manufactured goods slowly and dangerously sailing on ships between Europe and the nascent US. Merchants could only have dreamed of the $6.4 billion that Europe and the US now trade every single day. With the advent of high-speed transport and the digital economy, every value chain in our economies is shaped by transatlantic commerce. And services have become critical to that. In fact, the EU and the US are the two largest traders of services in the world and are each other’s most important services trading partners.

Important as it is, trade now makes up the smaller part of the $9.8 trillion transatlantic economy: $7.5 trillion comes from selling locally to each other’s markets through our respective foreign subsidiaries, a testament to how deeply integrated the EU-US partnership is. Today, there are 5.3 million employees of European companies in the US and a further 4.6 million employees of US companies in Europe.

The stakes of the partnership

The transatlantic relationship has evolved almost beyond recognition in the last 250 years – giving citizens on both sides of the ocean a myriad reasons to celebrate. It has enabled Europe and the US to grow, innovate and project influence together in a way that would have been impossible alone.

Looking back at the rich shared history of Europe and the US over the past 250 years also provides vital perspective: the undisputed gains for businesses and citizens cannot be taken for granted. The international system is anchored in the transatlantic relationship; the current tensions, rapid technological change and global instability further underscore its vital importance to the world. If businesses and governments grow complacent and fail to maintain the EU-US partnership, the next 250 years could see the relationship lose its ability to protect and nurture the things we hold dear.

This anniversary is the right moment to celebrate America’s role in the world and to recognise how far we’ve come as partners in building our shared destinies. It must also remind us that what the EU and the US have created together is precarious and requires wise and continuous political stewardship from both sides for a prosperous future.

American companies will continue to play their part in bringing the EU and the US together for our shared benefit in a rapidly changing world. On behalf of AmCham EU and our 165 member companies, we congratulate the US on everything it has achieved over the last 250 years, and we join in the celebration of all that we have accomplished together.

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