Opinion

Thinking Global

Obama’s chance for a legacy

February 19, 2013

President Barack Obama devoted just one sentence in last week’s State of the Union address to call for a new transatlantic trade and investment deal. However, if negotiated with sufficient ambition and presidential engagement, it is Obama’s best chance yet at leaving a positive foreign policy legacy.

The other global issues Obama catalogued in his speech were largely about avoiding the worst: North Korea, cyber threats, Iran, Syria and other Middle Eastern upheavals.  Achieving what Obama called “a Transatlantic Trade and Investment Partnership,” however, has all the makings of grand strategy.

It is about nothing less than combining the world’s two largest economies and communities of common interest in a manner that could reshape all global trade and investment standards. It would also reinvigorate the Cold War’s victors, known then as “the Free World,” at a new inflection point of history. Only through common cause can the United States and Europe ensure they continue to write global governance rules even as they lose relative power and influence to countries that are less committed to democratic rights and free markets.

The magnitude of U.S.-EU economic relations still has no rival. Despite the euro zone crisis and slow U.S. growth, the United States and the European Union still account for roughly 50 percent of the world’s gross domestic product and enjoy more than $3 trillion in cross-foreign direct investment. U.S.-EU trade in goods and services accounts for 40 percent of the world total, or $636 billion in 2011. The U.S. Chamber of Commerce reckons that figure could increase by $120 billion in the next five years  – if the two sides can eliminate tariffs.

Yet numbers don’t tell the whole story. A far-reaching trade and investment agreement would mark a transatlantic recommitment ceremony of historic significance, reversing a dangerous drifting apart.

Former U.S. ambassador to the European Union Boyden Gray has called the prospect of such a U.S.-EU accord “an economic NATO.” His point isn’t that anyone wants to create another cumbersome transatlantic bureaucracy. Rather, the deal could harness the economic attraction of the world’s largest and most robust trade and investment relationship at a time when falling defense budgets and Afghan troop withdrawals endanger the North Atlantic Treaty Organization.

What makes an U.S.-EU accord so crucial is its timing. The National Intelligence Council, in its quadrennial report on global trends, described this era as similar to 1815, 1919, 1945 and 1989  – times when the actions of political leaders shaped history in ways good and bad.

In 1815, Austria’s Metternich and others at the Congress of Vienna redrew borders. They created the Concert of Europe and provided nearly undisturbed peace for almost 40 years.

In 1919, President Woodrow Wilson and others laid the tracks for World War II by signing the Versailles Treaty after World War I.

After 1945, President Harry S. Truman and his allies performed better, giving birth to the global and transatlantic institutions that set the stage for Cold War victory  – and still provide the glue for world governance.

Then in 1989, President George H.W. Bush, German Chancellor Helmut Kohl and Soviet leader Mikhail Gorbachev ended the Cold War without a shot, unified Germany, expanded Europe and ushered in a new era of globalization that has embraced China and others.

The world now faces the most dramatic shift in political and economic power and influence since the 19th century. With its relative economic size and influence in decline (the American share of global GDP has fallen from 50 percent in 1945 to 18.9 percent now), the United States needs Europe more than ever if it is to shape global outcomes.

Obama will have to grasp the historic stakes, however, and be fully engaged with European leaders if he is to overcome the obstacles that lie before one of history’s most complex trade and investment agreements. Vice President Joe Biden at the Munich Security Conference in early February warned that a new U.S.-EU agreement had to be done “on a single tank of gas,” and U.S. and EU leaders have vowed to conclude their negotiations within two years.

As Obama decides how much political capital to invest in the process, he needs first to grasp the enormous stakes. He framed the agreement narrowly in his State of the Union address as something that would help the United States create jobs and growth. But failure to reach agreement will increase the likelihood that China and others will set the rules for the 21st century.

The United States and Europe are still the largest trading blocks. So there is a window of opportunity to reach an accord that could become the standard for other bilateral and regional arrangements. Thus Washington and Brussels must ground their agreement on core principles of nondiscrimination — meaning that others would be allowed improved access to the giant U.S.-EU market if they adopt the same standards. Emerging markets would then be more likely to adopt rather than undercut Western best practices.

The agreement could also reinvigorate a transatlantic relationship that is vital across a great many other issues. U.S.-European cooperation, for example, has given teeth to the sanctions against an Iran seeking nuclear weapons. Close transatlantic collaboration will also be necessary to address Middle Eastern upheavals, particularly now in Syria, and the spread of al Qaeda associates to Northern Africa and elsewhere  – where the French have been disappointed by what they consider Washington’s limited and reluctant support.

There was much fanfare when U.S. officials announced their “pivot to Asia” in November 2011. But the concept caused consternation in China, which feared Washington was seeking to contain its rise, and in Europe, where U.S. allies worried about abandonment.

An Obama administration pivot back to Europe has no such downsides. But it can only succeed if the president seizes the historic moment and makes it his legacy.

 

PHOTO (Top): President Barack Obama delivers his State of the Union speech on Capitol Hill in Washington, February 12, 2013. REUTERS/Kevin Lamarque

PHOTO (Insert): After the chaos of the Napoleonic wars, the 1815 Congress of Vienna brought Europe a peace that lasted almost 40 years. [The Congress of Vienna by Jean-Baptiste Isabey, (1819)] COMMONS

Comments
9 comments so far | RSS Comments RSS

Too little, far too late.

China WILL become the next hegemon in the world, and there is absolutely nothing we can do about it.

On a more practical note, what would we survive on without trade goods from China?

Posted by EconCassandra | Report as abusive
 

It is very hard to see where the benefits of this partnership will be. It won’t be the containment of globalization, because it is US and EU multinationals who started it, and are still expanding this by building factories in Asia. They will not let anybody to stay in their way.

So it seems to me that US is simply looking for a willing partner to help it regain world dominance and some manufacturing jobs (from Europe. I hope down-to-the-ground Europeans will see through this. I can see why this has to be done on one tank of gas.

From pivot to Asia to pivot to Europe – how about pivot back home?

Posted by aussie66 | Report as abusive
 

So Mr.Kempe thinks the “salvation” of our constitutional republic is to ally with socialist Europe? That’s like a drowning person looking for help from someone that can’t swim.

The United States and the United Kingdom and Europe have some common interests. They have NEVER, however, shared common goals when it comes to societies, production, investment and rewards.

People in the U.S. are willing to work harder and longer with less time off in order to be better off financially. The U.K. and Europe are more of the “union” mind set, where getting ahead is by seniority rather than skill or ability to produce “more”. The result is that the U.S. has more people willing to “take a chance” on the “next big thing, more self-sufficient and confident.

Europe has more of the “average” and “below average” because those who would win at the game of life tend to go where they are financially appreciated and rewarded more. China’s big limitation is that their people are not ALLOWED to “think outside the box”. So that will tend to keep them in it.

Posted by OneOfTheSheep | Report as abusive
 

People in the U.S. are willing to work harder and longer with less time off? In many cases I would say they are “forced” by market conditions, collective peer pressure or other factors to take those hours.

Building things is a great creative endeavor, but until we learn to photosynthesize, revving up the engine off production is inherently coupled with environmental degradation – so higher gross domestic product is at best a questionable pursuit.

I love my country, and I love a good many of our modern conveniences, but it is about time that we all stopped burying our heads in the sand like ostriches, and faced the fact that we live in a finite system, where our collective actions have real consequences…

Posted by CanyonLiveOak | Report as abusive
 

@CLO I will agree with you to a certain point. The willingness of the American worker to “work harder” is part of our culture. It’s what makes us relatively unique in the world because we have dissolved many of the class distinctions.

We have been raised (at least to this point) that “the harder you work, the more successful you can be.” (Acknowledging that “success” can be measured in innumerable ways.)

While there are no guarantees, the fact is that economic upward mobility is available to any person who is willing to invest the effort AND assume the risks. Thus, you have people who work more than a forty hour week to help their children pay for higher education, who work two jobs to afford a nicer home or a better car. Yes, in some cases it promotes additional consumption, but the beauty of that scenario is that it is an individual decision–not something defined by government or the class in which you were born.

If one his happy with their status in life, then they can make the appropriate choices. If one aspires to something greater, then they have the opportunity to make the choices/sacrifices necessary.

Where the system fails is at the individual level–where a person makes poor decisions or fails to apply the necessary effort, but expects the same rewards as the person who did.

Posted by COindependent | Report as abusive
 

Obama’s only chance for a positive legacy is to reform entitlements before they bankrupt this country…otherwise his Presidency is an utter failure.

Posted by jaham | Report as abusive
 

Obama’s best chance at a ‘legacy’ would be to step down and admit he couldn’t lead a crackie to a crack house.

Posted by stambo2001 | Report as abusive
 

Where the system fails is at the individual level–where a person makes poor decisions or fails to apply the necessary effort, but expects the same rewards as the person who did.

And that is where we are headed under the current mindset of most of the people in the US and the current adminstration. Big government and they way the last few generations have been raised have sealed the deal.

Look to help from Europe? Sounds about right as the government moves in that direction which will prove to be a huge mistake.

Posted by Crash866 | Report as abusive
 

Kempe is extremely selective in his historical overview of Atlanticism. He clearly missed the significance of the Atlantic Union Movement in the U.S. Congress (49-75). For more information, check out freezona.com/wos

Posted by Freedomist | Report as abusive
 

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