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The US and Europe in the age of uncertainty

Washington DC, 05/06/2017, International Conference
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On the occasion of the first conference organized in Washington, DC, by Aspen Institute Italia since the election of President Trump, we discussed the future of the Transatlantic relationship and its current challenges: these are tough times but strong Euro-American ties remain indispensable to European security. The various dimensions of the Transatlantic relationshsip have also been the object of the closed door hoc meetings held on June 6 ("For a new Transatlantic compact: values, interests, policies") and of the panel events held on June 7.

The Trump era has introduced strategic change to US foreign and economic policy.  At the same time, relations between the two shores of the Atlantic feature very prominently in the election campaigns in France and Germany.  While Germany is rediscovering a leading role and considers it essential to preserve a Europe of 27, the Macron factor has revived France's commitment to the EU, though it has yet to achieve such difficult objectives as debt reduction and tha launch of a series of reforms.

Germany will have to deal with what many consider a major contradiction: on the one hand there is the large trade surplus, but on the other hand there is Germany's position within the Euro-Atlantic security context, with a level of spending that certainty does not match the country's potential. 

There is interest in the US administration’s openness to possible new trade deals with Europe. This topic has been at the core of the Washington conference, with the participation of the US Secretary of Commerce, Wilbur Ross, and (in a videconference from Rome), Italy’s Minister of Economic Development, Carlo Calenda. A central point is that will be difficult to manage trade flows between Europe and the United States without an agreement, in view of the complexity of existing supply chains.  Nor must we forget the China factor, which has now reached such a scale as to create new balances that can no longer be managed by means of tools inherited from a period of unchallenged Western superiority.

A "TTIP-light" has therefore been suggested, as a first stage covering some of the most strategic negotiating chapters, leaving other thornier issues to a later stage.  Limited and specific agreements can indeed be more effective, because they are quicker to negotiate and implement.  Some observers do not welcome this approach, particularly on account of the direct link between fair trade and a virtually perfect bilateral equilibrium in the United States' balance of trade with its major partners.

The American economy faces many challenges.  First and foremost, employment, for which – at least according to the current administration – there is only one solution: maximum deregulation.  Simplification is indeed the key to reviving such strategic industries as infrastructure and construction.

Two conflicting outlooks emerged during the debate.  On the one hand there was a positive appreciation of growing consumer spending in America, the strong dollar, low oil prices, and improved job creation in the services sector.  On the other hand, there was a focus on the slower growth of productivity and the sharp slowing in the creation of new enterprises.  Furthermore, some parts of the country are suffering badly from the disruptive effects of relocation, due to technology and commercial competition.  There are concerns about particular sectors, first and foremost automotive, retail, and credit.

Indeed, the recent announcement of Washington’s withdrawal from the Paris climate agreement was attributed to strictly economic and industrial reasons: for the US, having to meet costly commitments right away would have meant granting a considerable advantage to the world's biggest polluters, who would have enjoyed deferred costs.

However, the Trump administration remains firmly committed to helping Europe to reduce its dependence on supplies from the East, which have on several occasions proved vulnerable to political factors, confirming the obvious link between energy security and the diversification of sources.  Still on the subject of security, attention was drawn to the danger of serious vulnerabilities affecting the electricity grid.

The relative importance of renewable sources – now a global trend – is increasing and will not be affected by America's position on climate change.  The transition is taking place very fast.  Even LNG is becoming less important in determining renewable energy prices.

With regard to the solidity of transatlantic ties, NATO remains a complex issue, though still of strategic importance.  Transatlantic security is indeed indivisible, and the Americans have frequently called for burden sharing, even during the Obama presidency.  But financial contributions alone do not determine the real usefulness of the assets made available; the equation must include qualitative criteria for assessing acquisitions, training, and the political will to deploy available forces.

The asymmetrical nature of the commitments on which NATO is based is a structural reality of the Alliance.  Part of the frustration felt on both shores of the Atlantic stems from the strategic context, which does not lend itself to the traditional solutions provided by Article 5 on collective defense.  These problems emerged clearly back in the long years of the military deployment in Afghanistan, particularly in connection with power projection and the sustainable presence of forces in remote theaters.

Russia now presents NATO with a very difficult challenge: the ineffectiveness of the common line pursued hitherto for containing Russia's ambitions merely highlights the risks of a weakening of the Alliance, with member countries apparently each going their own way.  International terrorism, too, presents the Alliance with a dilemma, in view of the shifting and elusive characteristics of the threat.

The same point can be made about cyber-security, which requires innovative tools and methods, as well as the constant cooperation of private players. The areas where efforts must now be focused to enhance capabilities include big data, robotics, and machine-human interfaces.  One fundamental problem stems from the increasingly transnational nature of advanced technology companies, which are therefore difficult to integrate into a domestic strategy.  Even the biggest data-gathering platforms, such as the social media, transcend national boundaries and escape national jurisdictions, despite their huge technological and security importance.

The economy, jobs, foreign policy, defense and security: if the United States and the EU do not, laboriously but tenaciously, find new common ground and different standards for governing globalization, others are ready to do so.  And that will certainly not be in the interest of Washington, Berlin, Paris, Rome, or Brussels.  They must, rather, be ambitious and aspire once more to formulate new ground rules to consolidate their historical alliance.