European Affairs

The answer depends on two conditions. One is how well both sides manage the transatlantic community amid new uncertainties. A recovery in civility already seems apparent between the EU and the U.S., and a similar, more substantive improvement in transatlantic relations starting in 2009 is widely anticipated among most European leaders and a large part of the American electorate. But change may turn out to include some disappointments. The sooner leaders start working to head them off, the better the chance of making the most of the transitional moment before it is skewed by unexpected problems such as military burden-sharing and not-so-latent protectionism.

The challenge – to make the most of the opportunity for change – starts now, and it starts with the need to preserve the best of what exists. A key example of such useful arrangements is the Transatlantic Economic Council, founded last year – at an EU-U.S. summit meeting – with promising expectations of freeing up regulatory red tape. This body needs to remain pro-active over the interim 18 months when there will be changes in the American administration and in the European Commission and the European Parliament later in 2009. Seeking to embed this dialogue deeper into the fabric of U.S.-EU relations, the U.S. Chamber of Commerce has told the Bush administration that it is “vital” to maintain the momentum of this nascent institution. What makes this particular body so important is that the TEC involves cabinet-level officials with authority across the board of economic, technological and regulatory relations.

The TEC could prove invaluable as the current global financial crisis unleashes a new wave of U.S. regulatory measures on capital markets. Any move of this sort will almost certainly have consequences for Europe, including many unintended ones. A valuable service for both sides can come from European insistence on protecting and expanding the momentum toward a transatlantic marketplace where capital flows have overtaken trade in importance.

Moves are underway to improve military relations between NATO and the EU. There are even tangible signs of more enlightened cooperation, such as the Pentagon’s choice of the EADS’ airborne refueling tanker over its domestic rival, Boeing.

The second, perhaps even more crucial condition is what each side – the United States and Europe – does to reshape its own house in response to global financial turmoil and to security challenges in the broad Middle East.

Looking ahead, there are risks that the United States will retreat from its readiness to supply much-needed public goods. Even in the face of European disdain for the Bush administration, Washington pursued military strength of a sort that enabled most allied countries to cut back their defense efforts. These U.S. policies stemmed in part from “unilateralism,” an approach that often alienated allies but, simultaneously, brought these broad common benefits. Economically, the U.S. market has remained open for imports of consumer goods, i.e. for exports powering growth in European countries. A third trend, less frequently mentioned, is the U.S.’s public-private crusade against AIDS in Africa that has resulted in treatment for 30 percent of AIDS sufferers, compared with two percent six years ago.

As Washington sheds its hegemonic view of its place in the world, will Europeans pick up some of the slack? For the time being, EU capitals seem to be keeping things on hold, waiting for a new administration in Washington next year that they expect to be more congenial. Unsurprisingly, Europeans are anticipating a more flexible and more multilateral-minded United States. And, indeed, all three remaining candidates for the White House are committed to two actions much desired in Europe: (1) closing down the Guantanamo detention facility and (2) presidential leadership in fighting global warming. Beyond these U.S. initiatives, both sides of the Atlantic will certainly be looking for opportunities for a fresh start with a new set of leaders in both Washington and key European capitals. Their chances of success will improve with lucid recognition of some downside risks about the impending change in Washington.

The next White House team will be more congenial to the allies, but it may have limited scope for more accommodating U.S. behavior. For one thing, the new Congress will almost certainly have a Democratic majority with a stronger say in U.S. policy than at any time for eight years. This is a mixed blessing. The Doha trade talks, for example, are unlikely to find support in the next Congress; protectionism is in the air. So leadership from the very top will be needed on both sides of the Atlantic to support free markets. European Commission President José Manuel Barroso recently under-scored this point in calling for strong defense of free-market policies. Washington may become readier to envision a more robust EU defense option in conjunction with NATO, but any shift will be paired with pressure from a more cost-conscious Washington for increased European military spending. In other words, when Washington starts to talk more about multilateral consultations, it is also liable to ask, in return, for more output from Europeans on tackling global challenges.

Amid promising signs of convergence on some issues, notably about global warming, there are also signs of an emerging American mood that may surprise many Europeans. For one thing, polls show shifts in U.S. attitudes toward the Iraq conflict: the war remains deeply unpopular, but the majority of voters – perhaps influenced by recent signs of improvement on the ground in Iraq – seem to be moving away from support of early troop withdrawal. That seems likely to leave America grappling with two unfinished wars, in Iraq and in Afghanistan. What if another crisis blows up in the danger zone from Beirut to Tehran? A Democratic administration would probably be inclined to go along with European preferences for an extensive diplomatic effort, but a military confrontation could fracture the Western consensus. The Pentagon remains openly skeptical about some key European allies’ willingness and readiness to fight as part of a U.S.-led (or NATO-led) coalition. To overcome this problem of European capability and credibility, France has started working with Britain to persuade the other EU nations to do more militarily. In addition, with the Pentagon looking for ways to start rebuilding U.S. military strength, it will resist any call for new military interventions, even on humanitarian grounds. It is another example of the kinds of gaps that may be opening up – for Europe, too – as American power retracts. Can Europe step up?

There is also clear evidence that Americans favor stronger emphasis on domestic affairs in the period ahead. Economically, a form of protectionism can already be seen in U.S. policies pushing further down the falling dollar (as Paul Horne explains in this issue of European Affairs). Already, the currency differential with the euro is prompting some European manufacturers to shift some manufacturing jobs to the United States.

These U.S. reflexes – in economics and security – fuse with calls for “rebuilding America at home” that will resonate in the next Congress. This means money and attention spent on education, housing and health care to restore the human and physical national infrastructures that many Americans feel have been neglected because of foreign involvement under the Bush administration. These trends probably foreshadow an America turning inward in attention and priorities.

Such a redirection in the United States may afford Europeans more running room, but it could mean less emphasis on the value and importance of transatlantic cooperation. Both sides need to resist any such devaluation. In some cases, the atmospherics seem propitious – on global warming, for example. All three major U.S. presidential candidates have come out in favor of mandated ceilings on carbon and a cap-and-trade system of emissions trading (of the sort the EU has started) to tackle climate change. But here again, leadership will have to be followed through. In American political terms, the issue of climate change has not surfaced in the electoral campaigns, and the candidates, while pledging actions of the sort sought by European governments, have never publicly tackled the thorny point that any serious response will require sacrifices by American voters.

Europeans have no monopoly on inflated transatlantic expectations. In Washington, frustrations with Germany arose because too much was expected from the Merkel government, particularly about Russia. (See the article by Simon Serfaty in this issue.) The U.S. honeymoon with President Sarkozy has yet to prove an enduring marriage.

As preparation for any broader agenda of stronger cooperation, there are opportunities for both the U.S. and the EU to do things to set the stage now. Take energy. Each side has its own challenge. Washington will have to sell the need for carbon curbs to an American electorate that cares more about jobs than about global warming. The EU needs to broaden its focus, moving beyond environmental alarm to tackle the crisis of energy supply. This means diversifying supply with new gas pipelines – and perhaps with clean-coal technology. It also means a more hard-headed approach to nuclear energy. If those pieces were in place, the transatlantic community would be better positioned to ensure China’s effective integration into a new global energy economy.

If waning American hegemony leaves a void, Europe should worry about helping to fill it. As Kori Schake has warned, a vacuum could bring unruly global turbulence in which a hegemon, even with clipped wings, fares better than others. If opportunities open for Europe, Europe must be up to seizing them.


This article was published in European Affairs: Volume number 9, Issue number 1-2 in the Winter/Spring of 2008.