Business

Commercial harmony is music to the ears of the liberal world order


In the whirlwind of summits during President Joe Biden’s week in Europe – the G7, NATO, the US, Russia and a series of bilateral meetings – one of the least commented on may be the most important. european american summit Last Tuesday marks a sharp change in transatlantic relations, and in the influence of the previously waning West in the world.

The headlines focused on the most specific achievement – an agreement to end the long trade war over subsidies from aircraft manufacturers. While this was welcome, he missed out on what was really important at the top and actually in the flight deal itself. A five-year suspension of trade sanctions may or may not resolve the dispute between Boeing and Airbus. Much more important, the conflict is stalled, goodwill is re-established and both sides are committed to making policy guided by their common values ​​and interests rather than the issues that divide them.

The ramifications go beyond traditional trade liberalization or ending the tariff war from Donald Trump’s presidency. Both Europe and the United States have increasingly used trade policy in the service of non-commercial values ​​and geostrategic concerns. This trend will now be more coordinated.

The summit statement makes clear that trade has become a common geopolitical tool, “to help combat climate change, protect the environment, advance workers’ rights, and expand resilience . . . supply chains” among other things. Even when China is not mentioned, perhaps in reference to European sensitivities, there is little doubt who is meant by “non-market economies that undermine the global trading system”.

The most important outcome is the creation of the US-EU Trade and Technology Council. Count that as a result of the European Union, which I suggest exactly that To the next US administration in December. Brussels might be a little surprised by how Washington embraces the idea. The council will include three of Biden’s Cabinet members — the secretary of state, the secretary of commerce and the trade representative — and various working groups on everything from technology standards and data management to investment vetting, security issues and human rights.

We can reasonably hope for two positive outcomes. The first is a more consistent approach to managing the digital economy. This would facilitate the deepening of digital trade and data transfer between the two economies. It helps that the United States moved quickly toward a more European approach to discipline private tech companies. The latest sign of this shift is Biden Lina Khan set, a critic of Big Tech’s market power, as a competition regulator.

The second is more cooperation in setting standards. That includes the Internet – the summit statement sets out the “objective to promote a democratic model of digital governance” – but must extend to physical technological standards. At a time when China is actively seeking to Dominate the setting of global standardsA more coherent approach across the Atlantic is a game-changer.

I used to succumb to the rise of ‘splinternet’, with the growing digital barriers between the US, EU and China as they set different rules for the digital economy. I am now more optimistic about the possibility of minimizing the transatlantic regulatory divide. This will fundamentally change the balance of influence on governance and standards adopted elsewhere, increasing pressure on China to adapt to the Western model rather than the other way around.

Of course, hard work still has to be done. Both sides are jealous of his organizational supremacy and are aware of the competitive rivalry between them. Moreover, previous incarnations of co-ops have been disappointing. But today is different: the awareness of shared weakness is greater, the Trump era is still fresh in people’s memory, and the feeling that global economic rules are rapidly rewriting is overwhelming. Cooperation in writing new rules is more promising than trying to resolve differences between the United States and the European Union over old rules.

None of this will increase the likelihood of a traditional EU-US trade deal. But that is not what is meant. In the twenty-first century, trade policy is increasingly about finding common approaches to domestic regulation — to facilitate trade flows, yes, but just as important to setting the global rules of the game.

The summit puts the winds in the sails of Biden’s plan to show that the world’s democracies can work together to achieve better outcomes for citizens than the alternatives promoted by strongmen around the world. With revived relations between the European Union and the United States, the old liberal world order lives to fight another day, then some fight.

martin.sandbu@ft.com



Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button