THE NEED FOR A COMMON EU-US AGENDA

Author: Arnault Barichella FONDATION ROBERT SCHUMAN / EUROPEAN ISSUE N°417 / 17TH JANUARY 2017

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1. Trade

The EU remains the largest single market in the world and the first trading partner for the US. Thus, the EU is in fact in a more solid position than may appear to negotiate trade issues with Trump. It is essential that the EU and its Member States pro-actively dialogue and engage with the US administration in order to reach mutual understanding on trade as soon as possible. The EU must underline the central economic importance of transatlantic trade for both sides, and be ready to demonstrate good will by making some concessions to reduce the trade deficit. Even if the EU were to lose a little economically, it currently benefits from a very high trade surplus vis-à-vis the US and can afford concessions to maintain healthy trade relations with the US over the next four years.

2. NATO

If European allies significantly increase their military spending, they are also likely to enhance their influence within NATO. In fact, European countries should insist that any increase in spending be proportional to expanded influence in the organization’s decision making processes. A more equitable partnership can only be beneficial for the evolution of transatlantic relations, making the alliance more sustainable over the long run. Moreover, given the unstable context of international relations, increased defense spending is a wise investment. In order to demonstrate to Trump that Europe is serious about contributing its “fair share”, all European countries should aim to meet the 2% NATO quota for military spending within the next five years. By significantly increasing military spending, Europe will make itself a more valuable and thus more relevant ally.

3. Russia

First of all, détente with Russia may help to stimulate the European economy at a time of sluggish growth. The European economy has been affected by the sanctions since Russia is the EU’s third largest trading partner, and Europe is highly dependent on Russian energy resources. Russia has retaliated with its own sanctions such as an embargo on certain EU agricultural products, leading to a fall in agri-food exports. Transatlantic unity has been key in securing a European consensus on Russia. The sanctions were jointly imposed by the US and the EU, and several countries remain strongly opposed to removing them, including Poland, the Baltic States and Germany, in particular. However, Austria, Bulgaria, Cyprus, Czech Republic, France,Greece, Hungary, Italy, Slovakia wish the lifting of sanctions as they view them as counterproductive. It is imperative for the EU to pro-actively engage with Trump as early as possible to begin developing a common position on Russia. The EU must redouble efforts to maintain a close dialogue with the US over the next four years to ensure that European views and interests are taken into consideration. If EU Member States succeed in increasing defense spending to reach the 2% NATO quota, this would send a positive signal of goodwill to Trump. However, increasing military spending on its own is arguably insufficient, and the EU needs to make itself not only relevant, but also indispensable to the US on the world stage. One way to do this could be for the EU to try and position itself as a strategic mediator between Trump and Putin. For this to succeed, however, Europe needs to be in a position to offer potential solutions. Overall, the EU will only succeed as a mediator if it manages to strike this delicate balance between dialogue and firmness vis-à-vis the Kremlin. By acting as an intermediary with Russia, the EU could serve as an indispensable ally for Trump. The EU will have to be willing to impose its economic clout, as there is no guarantee it will be listened to by either the Russian or the US side. Nonetheless, the EU is arguably well placed to take on the role of a mediator because of its very nature. On the one hand, as a regional organization, it can present itself as an impartial referee between conflicting parties. On the other hand, the EU is far more cohesive than other international organizations such as the United Nations, which makes it a potentially more effective go-between. The possibility for the EU to make itself an indispensable ally for Trump as an intermediary when dealing with other world powers is not restricted to Russia.

Iran

The EU and its Member States must seek to position themselves as indispensable partners to the US by acting as an intermediary with Iran. For example, Trump, together with his European allies, could propose to renegotiate issues having to do with researching and developing new centrifuges, or the expiry dates on centrifuge numbers. Since Iran may not be willing to make any further compromise, Europe is in a key position to safeguard the JPCOA by acting as a mediator to ensure that the diplomatic option prevails and that tensions do not escalate between Trump and Iran.

China

The EU should seek to position itself as a mediator between the US and China if tensions continue to escalate. One reason for this is the absence of any other potential mediators in the region. The main challenge for Europe is that Trump’s policy risks making Europe irrelevant in global politics by relegating it to the sidelines in a world dominated by the US, China and Russia. Despite resentment over the colonial period, the EU has succeeded in establishing deep and enduring ties in Asia.  Over the last decade, the EU has succeeded in carving-out a strategic presence in Asia that could potentially allow it to assume the role of regional mediator. For example, the EU has become a prominent member of the Asia Europe Meeting (ASEM), a bi-annual forum created in 1996 to bring together European and Asian leaders. Likewise, the EU is by far the largest contributor of financial and technical assistance to the Association of Southeast Asian Nations (ASEAN), and also supports other regional organizations such as the South Asia Association for Regional Cooperation (SAARC). Over the long run, the EU is also hoping to negotiate a bloc-to-bloc trade deal with ASEAN. Moreover, the EU has gradually developed strong bilateral relations with four strategic partners in Asia – China, Japan, India and South Korea. In the meantime, the EU has also successfully concluded ambitious bilateral trade deals with Singapore and Vietnam, and is currently negotiating with other countries in the region such Malaysia, Indonesia, the Philippines and Thailand (which were suspended following the military takeover). Likewise, the EU has emulated the US by concluding its own free trade agreement with South Korea, and is hoping to do the same with Japan. Regarding China, the EU’s priority has been to secure a bilateral investment agreement, even though negotiations on this issue have mostly stalled this past year. Over the last decade, however, the EU has successfully negotiated with China to remove obstacles and red tape that have impeded fair access for European companies to the Chinese market. This has made it possible for the EU, as the largest single market in the world, to become China’s number one trading partner. As a result, the fact that China has such a positive commercial balance with Europe may in fact contribute to providing the EU with leverage in its role as a mediator. Furthermore the cancellation of the TPP by the Trump administration may encourage East Asian nations to be more open to negotiate free trade agreements with the EU, including great powers such as Japan and China, which had been reluctant up until now. This would considerably enhance the EU’s strategic position in East Asia, making it an indispensable mediator if tensions were to escalate between China and Trump. Of course, it is clear that unlike the US, Europe has not had a significant military presence in Asia since the era of decolonization, thus it cannot match American armed presence in the region. Nonetheless, the EU has succeeded in asserting itself as a “soft security” actor and a valuable contributor in terms of its diplomacy. For example, it played an important role in brokering a peace deal to end the decades-long insurgency in the Aceh province of Indonesia in 2005. Likewise, the EU has been involved in helping to end another decades-long insurgency in the Mindanao region of the Philippines. EU diplomacy has also provided consistent support for the Northeast Asia Peace and Cooperation Initiative (NAPCI) process, launched in 2013 by South Korea. The EU’s support for NAPCI has allowed it to take the lead on anti-piracy operations in the Gulf of Aden in cooperation with several Asian countries, as well as organize high-level seminars for ASEAN about maritime security. Furthermore, the EU has provided most of the funding for reconstruction efforts in Myanmar and Afghanistan, and was influential in pushing for further UN sanctions against North Korea following its nuclear testing. For all these reasons, the EU’s growing strategic presence in Asia makes it ideally positioned to act as a mediator should tensions between Trump and China escalate in the next four years. The EU can rely on the fact that it is the largest market in the world and the first trading partner of both China and the US, providing it with strong leverage in negotiations. The EU can also mobilize its strategic engagement with other countries across Asia to put pressure on China and bring it to the negotiating table. The EU should engage with China to persuade Beijing to resolve differences with its neighbors within the framework of international law. At the same time, Europe should rely on its strong ties with the US to dissuade Trump from relying on the military option in Asia. The EU should focus on issues of mutual concern where the US and China need to work together, such as counter-terrorism or North Korea, in order to bring them to cooperate and dialogue with one another. There is no guarantee that the EU will succeed in imposing itself as a mediator, and both Trump and China could simply choose to ignore Europe. Nonetheless, even if these attempts fail, the very act of positioning itself as a mediator will make Europe more relevant to Trump. In the case of success, the EU will become an indispensable partner for the US on the world stage. Either way, Europe must adopt an intelligent and assertive strategy to reduce the risk of a weakening of transatlantic relations over the next four years under Trump’s presidency/

Conclusions

There are several ways for Europe to make itself relevant for Trump. The main danger over the next four years is “death by neglect”, thus the key for Europe is to succeed in making itself an indispensable ally for the United States. If the EU does not handle the situation well, there is a risk that Trump’s presidency could well mark a deathblow to transatlantic relations. Nevertheless, if Europe succeeds in managing the next four years in a constructive way, Trump’s challenge to the status quo also presents many opportunities to rekindle the flame of the Atlantic alliance. However, transatlantic relations would need to change, modernize and adapt to the new situation of the 21st century. This would involve two significant transformations. First, the Atlantic alliance must be reformed so that it becomes more balanced between Europe and the US. This involves at the same time correcting the important trade deficit America has vis-à-vis the EU, as well as Europe significantly increasing spending on defense with more equitable burden sharing within NATO. Second, it would involve expanding the reach of transatlantic relations so that the Atlantic Alliance acquires a more global role. This means that the EU should seek to position itself as a mediator, so as to become an indispensable ally to the US on the world stage when dealing with other powers such as Iran or China. Therefore, balancing and globalizing transatlantic relations represent at the same time the two most significant challenges, as well as the two greatest opportunities to rekindle the flame of the Atlantic alliance under the Trump administration.