The time has come for an Atlantic internal market
The following article by Federal Foreign Minister Guido Westerwelle was published in the 19 January 2013 issue of the Süddeutsche Zeitung
In just a few days US President Barack Obama will begin his second term in office. There is no doubt that European-American relations have improved in the past four years, that our coordination and cooperation have grown even closer. Nonetheless, in the face of a pressing need for reform, both Europe and the US have become more inward-looking in their economic and financial policy than is good for us in a rapidly changing world.
The world’s two largest and most prosperous economic areas are searching for the right approach to state regulation in order to learn the right lessons from the real estate, debt and banking crisis that shook our economic model to its core. At the same time, on both sides of the Atlantic we are trying to generate impetus for growth in order to create new jobs. The time has come for us to reflect on the thing that binds us together and offers us tremendous further potential: the world’s most closely tied trade areas and investment locations.
In a few days the EU-US High-Level Working Group on Jobs and Growth will present its report. It has scoured the closely meshed transatlantic network for new opportunities for growth. I would be very surprised if the Working Group did not strongly recommend that we now take a courageous and ambitious step in order to open up our economic areas further and integrate them better.
The economic reasons to do this are plain to see. Every other economic area pales in comparison to the Atlantic area. Together we generate nearly half of the world’s economic output. The exchange of goods between the US and Europe totalled more than 500 billion euros in 2011. We are each other’s most important trade partners. To this day, more than half of all US investments abroad go to Europe. And in the other direction, European investments in the US add up to more than eight times our investment in China and India together. This close, mutually complementary interconnection has created millions of jobs on both sides of the ocean. Why should we not harness these conditions to take the quantum leap to an Atlantic internal market? Such a market would also be more open in terms of services, financial services and public procurement. Although it may not be easy to precisely calculate the potential benefits to our prosperity, they would definitely fall in the range of hundreds of billions.
Technical as it may sound, this is also a matter of norms, standards and regulation issues. These factors determine the chances of market success for many good inventions and products. Together, we on both shores of the Atlantic have the expertise and influence to set standards that find worldwide acceptance. We want to be the ones to set tomorrow’s norms and standards, from electric mobility to the protection of intellectual property. Our social and environmental standards, which are stringent in global comparison, could be used as a model for future economic agreements with the rest of the world.
A transatlantic agreement holds potential that goes far beyond the strictly economic. This would send a strong political signal about the West’s ability to shape our world. It would set standards for the kind of open economic order that we want to preserve and expand around the world. Such an agreement could serve as a model for many follow on agreements, from Vancouver to Vladivostok and from Barcelona to Beijing. It would also inject new momentum into our close security partnership in NATO as well as our cooperation on almost every important foreign policy issue.
Why now of all times, when we have failed at similar attempts in the past? The answer is simple. We have a wide-open window of opportunity. The a priori economic grounds for the agreement have long since undergone rigorous analysis. These grounds are now amplified by three important factors. On both sides of the Atlantic we need strong impetus to spur action in the business and political spheres. The political constellations are favourably aligned for the necessary support, with the start of 2013 marking the outset of the new Obama administration as well as the Irish EU and UK G8 presidencies. After all, in the years since the start of the financial crisis we have all become aware of how rapidly the rise of China and other global players is changing the world. If we succeed in pooling the economic and creative strengths on both sides of the Atlantic, we can shape the newly emerging multipolar world in a way that preserves our interests and is firmly anchored in our shared values.
I hope that the European Council will send out a strong political signal for an ambitious treaty, ideally at its meeting in February. A suitably comprehensive mandate could then be adopted by summer under the Irish EU Presidency, paving the way to concrete negotiations. Our chances of successful negotiations will rest on whether we throughout Europe stay focused on the overwhelming economic, political and strategic value of such an agreement and thereby manage to overcome the obstacles and hurdles that will inevitably arise. This will require political will from both shores of the Atlantic, and it will take the broadest possible alliance of supporters. We need to start forming this alliance now.
This is a major opportunity for us to break out of the inward-focused uncertainty of the past few years and turn instead to the tremendous strengths we have on both sides of the Atlantic. We are societies that reward the most astute thinkers, that generate the most creative ideas, that offer the best opportunities for each individual to fully develop his or her potential. Now the time has come for an Atlantic internal market – to our mutual benefit, but also in the interest of the liberal international order that began after the Second World War and has granted us our unprecedented prosperity. This potential is far from exhausted. A comprehensive transatlantic agreement would send a persuasive message that Europe and America are asserting ourselves in the globalized world and that we are determined to shape our future according to our own standards.