Today’s transatlantic partnership often is reduced to security issues, institutionalized in NATO and bilateral cooperation. But it was the European Recovery Program – known as the Marshall plan – after World War II, which lay the cornerstone of this partnership. An economic program was the accelerator for the bond between North America and Europe and the common tremendous success story. Besides the security element and the economic element, the transatlantic partnership is heavily based on common principles and values.
Freedom and prosperity are the foundation of the transatlantic partnership for 70 years. Our freedom is guaranteed by a strong national defense and steady democracies, our prosperity is based on a market economy complemented by social cohesion. Both freedom and prosperity depend on the rule of law and make human rights possible.
Though, our common values and the future of the West are at risk today: Authoritarian states like Russia try to influence our democratic elections and compromise the territorial integrity of our allies. These exterior threats need to be dealt with hard power and soft power security approaches, which will not be part of this paper. At the same time, there are a number of changing developments which are threatening our social cohesion, our democracy and the rule of law from within: populism, migration and social disparities. Additionally, impacts like globalization, technological progress or environmental changes influence our societies. As a consequence, a number of people feel or are left behind in an economic or intellectual way. Many of them are no longer part of our economic success. It is my assumption, that this fosters populist movements on both sides of the Atlantic contrary to our transatlantic values. Therefore, the transatlantic partners have to focus on two issues: free trade and smart economic instruments.
Free trade promotes wealth in general, as we have seen (not only) in the past 70 years. It has a long tradition in transatlantic states, reaching back to the Hanseatic League in the 12th century and to the independence of the United States in 1776. It was the United States, which created significantly agreements like GATT and the Bretton Woods institutions. It is essential, that the West does not let authoritarian states with unfair trading practices, like China, shape global trade and do not let its states play off against each other, but set its own standards and act as one. Free trade agreements, like CETA between Canada and the European Union, are the current gold standard of free and fair trade. Unfortunately, instead of promoting TTIP or other free trade agreements, the United States is currently moving towards another direction and considers free trade as a zero-sum game, as 2017’s G7 summit has shown.
Free trade alone cannot be the solution, as contemporary problems and dissatisfaction in certain areas of economic decline, like the so-called Rust Belt in the United States or the Ruhr Area in Germany, illustrate. Thus, we need additional, smart instruments and maybe an active role of the state to streamline our economical participation. The qualification of the people is crucial for the economic competition in our technological developed and sophisticated world. Getting a decent qualification is a problem in particular for the lower social class. Free education – financed by the state – and a qualified apprenticeship system – supported by the companies – contribute to a competitive and qualified workforce for our economies and a good perspective for a reasonable paid job for the people. The various successful ways and means of qualification throughout North America and Europe should serve as best practices for each other.
Another keystone for economic success can be state development banks, which are a market based approach for the state to shape the economy. These government-owned banks, like the European Investment Bank or the German KfW –established for the Marshall Plan–, finance certain projects, companies or industries, when commercial banks do not show interest and when these financings are in the public interest. Development banks cover a wide range of tasks: They invest, using low-interest promotion loans or equity financing, in certain companies focused on prospective trends or challenges like digitalization or environmental changes. Also, they are an instrument to save bankrupt companies crucial for the economy, e.g. by a guarantee, so a state will not have to nationalize a company like the United States did with General Motors and some financial institutions in the end of the 2000s. Another task are investments in social housing and new infrastructure projects in the public interest by using the strong credit rating of the state owning the bank. For this occasion, Canada plans to set up the Canada Infrastructure Bank in 2017. As a counterpart to the free trade approach, state development banks can adjust shortcomings of the market. A capable transatlantic development bank could be an option to counter the Chinese dominated Asian Infrastructure Investment Bank.
Economic success and economic participation allow the freedom to bother about values and principles. A large number of citizens, living sound, sufficient and confident in a liberal society, have the ability to appreciate our institutions. Prosperity facilitates freedom and sense of responsibility – and vice versa. This must be the future transatlantic narrative.
It is crucial to develop our transatlantic partnership from a security focused partnership to an additional economic partnership. Looking at China’s strategy to create massive political and economic influence in Eurasia with its “one belt, one road” initiative, the 21st century silk road, a deeper economic partnership based on free trade and smart instruments is the key to modernize the transatlantic narrative, which can become the beacon of prosperity, freedom and hope for people outside the free world once again. Prosperity and freedom for all people in our countries is the key to get more global legitimacy for the transatlantic nations to shape the international order for a free world. Otherwise, our world is shaped by the leaders for the leaders of authoritarian states and getting much darker in the future.