What Happens to America’s Transatlantic Relations after the U.S. Elections?

October 30, 2020 Topic: Politics Region: Americas Tags: ElectionJoe BidenDonald TrumpDemocracyPolitics

What Happens to America’s Transatlantic Relations after the U.S. Elections?

If the United States under a new Biden administration puts aside Trump’s “America First” rallying cry and extends the hand of cooperation to the European Union, then it will be in the EU’s own interest to find ways to make its sovereign ambitions consistent with closer transatlantic relations.

Until the election of Donald Trump in 2016 transatlantic relations were undergoing a steady shift in focus. As the European Union grew from an embryonic six-nation grouping in 1957 into today’s economic superpower of twenty-seven member states the United States and the EU increasingly focused not only on managing their bilateral agenda but also on promoting their common global interests. In other words, the transatlantic relationship became less about itself and more about the world.

This evolution slowed to a halt with the advent of the Trump administration. The president’s campaign was built on grievances about the U.S. global role, portraying the country as a victim of the liberal international order that it had constructed after World War II. Europe had become the principal U.S. partner in defending this rules-based order and the multilateral organizations that constitute it—NATO, the United Nations, the World Trade Organization, and the International Monetary Fund. The Trump administration’s ideology of “America First” devoted to the maximization of the U.S. freedom to act means the relationship with the EU based on common support for the liberal order is suspect. 

If Trump achieves a second term, then the most important question for the transatlantic relationship is whether the president would be content to continue acting as a disruptor of established U.S. commitments or rather would he adopt the more brutal pose of a “deconstructor”? Would he be satisfied with continued displays of defiance toward international norms? Or would he prefer to leave a more historically potent legacy—pulling apart the post–World War II international order based on liberal notions such as the rule of law, openness, multilateral cooperation, and the primacy of the individual over the role of the state?

The transatlantic relationship and the liberal international order it supports could well deconstruct during a second Trump term. Yet that would be most likely to happen not because of deliberate attempts to destroy it but rather through the centrifugal forces unleashed by the lack of a coordinating role played by the United States (and the broader transatlantic relationship) to maintain it. As T. S. Eliot put it, “not with a bang but a whimper.”

One case in point: the multilateral trading system.

Despite Trump’s criticisms of the WTO, the United States has remained a member of the global trade body during his administration. It has even brought cases to the WTO’s dispute settlement system, which could be seen as an indirect endorsement of it. But the Trump administration has seriously weakened the WTO by blocking the appointment of new judges to its Appellate Body out of unhappiness with a number of its decisions, effectively rendering the dispute settlement system toothless. And the president has on multiple occasions threatened to withdraw the United States from the WTO. 

Yet the Trump administration is unlikely to leave the WTO because of the huge economic costs that would entail. Instead, under four more years of a Trump administration, it is what does not happen, it is the accumulation of U.S. inactions that is likely to lead to the de facto end of the rules-based trading system. 

What the rules-based trading system needs is not so much a large-scale multilateral negotiation like the Doha Round, which was launched in 2001 but never concluded. Rather, it is more informal efforts among like-minded economies—bilateral and plurilateral trade agreements, mutually agreed norms for artificial intelligence, harmonizing approaches to climate and digital taxes—that will preserve a high-standard global economy. 

But it is precisely here that the United States could be expected to neglect to empower the transatlantic relationship during a second Trump term. Not only has Trump portrayed the liberal international order as harming U.S. national interests; he has also shunned opportunities for leadership where the U.S. has had to share the spotlight with other countries.

What would be in store for the transatlantic relationship under President Joe Biden

Biden can be expected to rebuild U.S. alliances and to rededicate the country to multilateral cooperation by rejoining the Paris Climate Accord and the World Health Organization from which the country withdrew under the Trump administration. Biden has called Europe the “indispensable partner of first resort” for the United States and this idea should remain a guiding principle for a new Biden administration.

Biden’s presidency, however, will not only be one of restoration; it will also be characterized by attempts to achieve transformation. This is partly due to the economic devastation produced by the coronavirus pandemic, in part because of increased concerns about economic, social, and racial inequality, a Biden administration can be expected to pursue domestic policies that would bring the United States much closer to what in Germany would be called a “social market economy.”

He would focus on making capitalism more equitable, inclusive, and politically and economically sustainable over the long term through government investments in infrastructure, the workforce, social services, and to combat climate change, as well as by strengthening labor unions and small businesses. It would accelerate an emerging concern that American capitalism needs to move from its strong current focus on shareholder value to a conception taking account of broader stakeholder interests.

These steps could help to reinforce a sense of partnership between the United States and Germany and other countries in the European Union based on common values. The approach to economic policy and the role of the government on both sides of the Atlantic would come to resemble each other more closely, even if ingrained historical and cultural differences mean that the two societies will remain distinct in significant ways.

But precisely because of a Biden administration’s focus on an ambitious domestic agenda, a return to the Obama administration’s approach of negotiating a U.S.-EU trade agreement is not likely to be high on its list of priorities, at least at first. While Biden has not ruled out eventually engaging in new trade deals, these would have to come after investments in the U.S. workforce that would make it more likely to succeed in a globalized economy. Instead of a formal free trade negotiation, a Biden administration would be apt to devote its economic diplomacy to rebuilding transatlantic habits of cooperation on global issues like the multilateral trading system, climate change, cybersecurity, global supply chains, public health, and development. 

This approach could include working with the EU to lead a coalition of like-minded countries to reform the WTO and to promote high-standard rules to counter China’s state-capitalist system. If this does happen, then a Biden administration would be resuming the earlier evolution of the transatlantic relationship since the end of the Cold War from one focused on internal bilateral affairs to one dedicated to mutual prosperity and security through joint actions to create a more stable and more just rules-based order. 

But the arrival of a Democratic administration would not change a fundamental fact about the international system: its increasing polarization owing to the rise of China. There will be an urgent need to find the right balance between defending the transatlantic relationship against the impacts of Beijing’s state-capitalist system and preserving the benefits of existing trade and investment ties with China.

As a unitary state and a long-standing great power, the United States is accustomed to weighing economic opportunity against national security imperatives in its international strategy. This balancing act does not come as naturally to the European Union, which is a trade, competition policy, and regulatory superpower but is lacking a single foreign and security policy. 

As can be seen in President Ursula von der Leyen’s call for a “geopolitical” European Commission, the EU is waking up to the need to act more coherently across policy areas on the world stage. That is a welcome development for U.S. interests. But there is a risk the EU will prioritize its independence—for example, its “technological sovereignty”—at a time when a unified transatlantic strategy encompassing trade, technology, and security will be the best guarantee that the liberal international order continues to prevail as China’s power grows. 

If the United States under a new Biden administration puts aside Trump’s “America First” rallying cry and extends the hand of cooperation to the European Union, then it will be in the EU’s own interest to find ways to make its sovereign ambitions consistent with closer transatlantic relations.

Peter S. Rashish is a senior fellow and Director of the Geoeconomics Program at the American Institute for Contemporary German Studies at Johns Hopkins University.

Image: Reuters