Free enterprise has done more to advance the cause of human flourishing and improve the lives of people around the globe than any other system or program devised by man. The historical cooperation between Europe and North America in advancing free trade, economic opportunity, and open markets not only serves to connect our nations, but has been a force for good across the globe. A strong and integrative economy is also an antidote to the continuing rise of populist sentiments. It is important, therefore, to continue working toward improving our economic relationship to advance transatlantic opportunities and build a peaceful international community.
1. Free Enterprise and the Need to Limit Unnecessary Regulation.
One major obstacle to free enterprise is the persistence of over-regulation. Some level of regulation is needed to ensure health and public safety, yet many regulations become burdensome and counterproductive. The European Commission, along with several U.S. scholars, identify difficulties in accessing financial capital and markets, transferring or setting up business entities, and cumbersome administrative procedures as major challenges to entrepreneurs.
One possible solution to over-regulation, beyond eliminating or reducing existing regulations, is to restore the legislative function of national legislatures and reduce regulatory power delegated to bureaucratic agencies. Creating regulations causes a significant financial impact, national legislatures in the U.S. and Europe should require their own approval before finalizing the rule making process. This would limit the growth of regulations that inhibit economic growth and opportunity, while giving legislatures ownership in imposing regulations when financial disincentives outweigh the policy rationale.
2. Advancing Technological Development through Education.
The growing technology industry, anchored by universities providing intellectual capital and Research and Development expertise, contributes over 7% of US GPD as well as 8% of GDP in major G-20 countries. Growth prospects in the technology economy are promising for job creation, as new business services facilitate the entry of small and medium sized businesses, which create the majority of new jobs. However, remaining competitive in the tech arena presents a significant challenge as other governments are investing heavily in innovation via their own universities and technical colleges. Moreover, higher education funding in the US and EU has steadily declined. As a result, universities are developing corporate partnerships to fund and facilitate innovation.
While governments must continue to support higher education, they can also support university-corporate collaborations through investments in infrastructure, connecting innovations to rust belt and rural communities. Cities, such as Amsterdam and Kansas City, Missouri, have taken critical first steps by becoming “smart cities,” uniting infrastructure (i.e., energy and transportation) with information technologies to increase efficiency. State and federal governments can advance these concepts by establishing “smart states” and regions. This growing connectivity will meet the needs of corporations in the US and EU seeking to capitalize on new technologies and will generate an environment enabling small and medium sized business to prosper. While these innovations are expensive, costs will be offset by increased efficiency, economic growth, and effective public-private partnerships.
Additionally, these new partnerships generate added value through developing talent. Students participating in corporate sponsored programs gain access to real-world learning and a fast-track to jobs after graduation. The corporate sponsors in America and Europe gain an avenue to engage talent and develop transatlantic workforces through a rich exchange and transatlantic partnership.
3. A More Participatory, Transparent, Evidence-Based and Humble Approach to Free Trade and TTIP.
Free trade agreements, like the Transatlantic Trade and Investment Partnership (TTIP), can greatly benefit national economies, but there are legitimate concerns to be addressed. Common public fears include an erosion of employment, social, environmental, privacy, and consumer standards and that public services and cultural assets will be neglected. TTIP extends beyond traditional trade agreements and is seen as more than an economic arrangement by the citizens. Therefore, narratives of prosperity and financial advantage failed in gathering public support for TTIP. It is time to reframe the public debate through traditional democratic institutions and through more innovative means to provide a transparent, participatory, balanced, and evidence-based consideration.
Independent and transparent economic needs tests should be conducted on all potential trade agreements to prevent the development of unsubstantiated critiques of free trade. After the conclusion of a trade deal, actors must pro-actively assess the impacts of their actions and publish the results to ensure a public discourse based on evidence. One solution to the popular resistance to trade agreements like TTIP is to first focus on narrower measures to build public trust in the efficacy and value of trade agreements.
Bring back humility into the debate: Much of the public pushback against TTIP stems from the lofty goals originally attributed to it. In reality, TTIP will, at best, make modest advances in promoting the economic interest of the transatlantic community. Yet, proponents lauded the agreement as a revolutionary deal capable of solving the EU’s economic woes. Reality is more complex, and single agreements, such as TTIP, are not a panacea and should not be advertised as such.
The general approach to reducing non-tariff barriers to trade should be mutual recognition rather than all-out harmonization. The barriers to trade will effectively be removed, while the democratic responsibility will be left with each partner state, addressing the major concern that TTIP might undermine the democratic process and serve as a platform for the interests of big business.
Andrea Becerra is an International Relations graduate student at the Fletcher School focusing on Environmental Resource Policy and Development Economics.
Michal Blank is a PhD in law candidate at the University of Erlangen-Nuremberg and works for a law firm in Berlin.
Brian Marrs is the Director of Policy & Strategy for NRG Energy, Inc., a Fortune 200 company, and holds a graduate degree in Energy Policy & Economics from Yale University.
Nina Maturu is a business strategist for digital products, she holds an MBA and Master in Public Policy and is interested in innovative economic models, which can boost local economies.
Nora Sophie Schröder is a PhD candidate and Fulbright alumnus, working at the University of Augsburg (Germany) at the Peace- and Conflict Studies Department.
Julia Schütze is a Euromaster Transatlantic Track student and a working student at Wikimedia Germany.
Brandon James Smith is a lawyer currently working in state government in the United States, he previously worked for a legal and policy think tank in Washington D.C., and as an adjunct professor at American University.
Eric Swenson is the Director of External Relations for MacMurray College in Jacksonville, Illinois.
Inga Trauthig is working as a political consultant in Berlin after earning her M.Litt in Middle Eastern, Central Asian and Caucasus Security Studies from the University of St. Andrews.
Steffen Zenglein is a graduate of Master in Economics with a focus on international trade at the renowned Ludwig-Maximilians-University in Munich.
Lorenz Zimmermann is a marketing executive at Allianz SE, and holds a PhD in quantitative marketing from LMU Munich.