Free Trade Between The U.S. & The E.U. Woud Boost Economic Growth

Free Trade Between The U.S. & The E.U. Woud Boost Economic Growth
White House (Pete Souza) [Public domain]

Free Trade Between The U.S. & The E.U. Woud Boost Economic Growth

Berlingske has this blog from Lykke Friis:

Do you mean business, Mr. President?

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Europe has been one of the dirtiest words in the recent American campaign. Just ask President Barack Obama: The Republicans accused him during the entire campaign of being soft and having European sympathies – two traits that in American politics apparently join up. Or, just think back to the beginning of the year, as Mitt Romney excelled in the following tirade: “Europe doesn’t work in Europe – and will thus not work in the USA.

The trend is far from new. During the 2004 campaign Europe was used as a political insult. The Democratic candidate, John Kerry, who might be Barack Obama’s new Foreign Secretary, toned down his otherwise excellent French. Otherwise he risked being dyed as a European – which in American political rhetoric is synonymous with socialism, laziness, and decadence. Actually John Kerry was pressed to say he preferred American bottled water to the French Evian.

In that light, it might seem politically tone-deaf and removed from reality to plead for advancing Europe to the top of the President’s ”to-do-list”. Never the less, it was precisely what several European political leaders immediately suggested when the vote was counted. Time must finally have come to close the file on a transatlantic free trade agreement and tear down the last trade walls. Realistically seen, a free trade agreement is the closest thing to a kick-start that actually works – note: On both sides of the Atlantic!

Despite the strong focus on the BRIC-countries on both sides of the Atlantic, the EU and the USA are already sharing destiny. We are each other’s closest trading partners and we invest in each other hammer and tongs. According to a study by the Center for Transatlantic Relations, performed by Johns Hopkins University, the American investments in the BRIC countries (Brazil, Russia, India and China) are only 7.2% of total American investments in Europe. The USA invests more in Ireland than in all the four BRIC-countries put together. And, what is more thought provoking (at least in a Danish context): Since 2000, the USA has invested more in Denmark than in Russia.

The trend is a two-way street across the Atlantic, where European businesses have the lions share of direct foreign investment in the USA. In terms of human impact it means stated briefly that millions of jobs in the USA depend on European investments. It is estimated that 3.5 million Americans are employed by European subsidiaries. The corresponding number in Europe is 4.2 million – or 35,500 alone in Denmark. And that is just employees in subsidiaries. Apart from that, there are all the jobs that derive from the transatlantic trade in general.

If we tore down the last walls and entered into the free trade agreement, the numbers would be even more impressive. According to the EU-commission, the trade would increase about 50 pct. Other research points to over a million new jobs created in the EU and the USA. Fortunately, the EU’s heads of government are, after the October EU-summit, very close to start negotiating free trade negotiations. So all we need now is that the President re-elect enters the matter wholeheartedly and gets the negotiations started at the beginning of the New Year. So, congratulations, Mr. President and hopefully you mean business!

Lykke Friis is a liberal former minister and perhaps the closest thing to a shadow foreign secretary there is – in my estimate.

She is one of the brighter elements in the opposition and doesn’t really mingle with lesser stuff.

To perpetrate gossip:

Politikken has:

Where former Danish PM and present NATO Secretary General Anders Fogh Rasmussen is mentioned as a possibility to either being EU-President after Herman Van Rompuy or head the foreign service after the lacklustre Catherine Ashton.

Now bringing up names early is a common way to poison-pill a candidacy and Fogh Rasmussen also denies being interested. The field is rather open, however, due to the fact that none of the major nations in Europe want their rivals on top jobs.

And JyllandsPosten quotes Anders Fogh Rasmussen as characterising the personal working relationship as the very best.


The interesting thing is the attention away from the internal squabble in the EU and US campaign sound-bytes. The other thing is the focus on security, where there are major Nato-reorganizations under way, with considerable savings on both sides of the Atlantic. Heaven knows tax cuts are needed both places.

Another factor: With rising food prices the petty subsidies and finagling of trade regulations should be able to stop. The behind the scenes sharing of information in the different banking scandals does seem to work pretty well.

With China looking less than stable and Russia in its usual budget crisis, there is a need to look for some real growth. How much?

Well, with all raw materials in a state of flux price-wise and China not being able to afford paying the rest of the world for the privilege of selling them stuff: We just might see some (not a lot) jobs and growth, where everything considered, the price and quality of both the US and Europe might measure up, despite the higher pay checks. Where, how, and how much is a set of very much unknown factors; but that is playing to the strengths of the West: The very speed adaptations can be made (not always the best choice in hindsight; but…) at will play into the strengths of the USA and Europe.

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