Is Atlanticism Fracturing?

16.06.2017

Is the sun slowly setting on America’s transatlantic imperium?  Donald Trump ascended to the presidency on the basis of an “America First” project of protectionism, cooperation with Russia, and the rejection of NATO as “obsolete.”  Nevertheless, under intense pressure from the foreign policy establishment, following the ouster of General Michael Flynn as National Security Council Advisor he appointed Atlanticists to key foreign policy positions. Contrary to the provocative rhetoric of the campaign his administration signaled that the United States would resume negotiations on a U.S.-EU trade and investment treaty and a revised North American Free Trade Agreement.  Stephen Bannon, the principal nationalist and architect of the America First strategy, was cast out of the White House inner circle.  

Yet, according to many observers the “America First” project has been revived.  At the NATO summit in Brussels on May 27 President Trump pointedly refused to endorse NATO’s Article 5 doctrine of collective defense by deliberately omitting 14 sacramental words from a speech that had been approved by the Pentagon, State Department, and National Security Council:  “The U.S. commitment to the NATO alliance and to Article 5 is unwavering.”  On June 1, he announced that the United States would withdraw from the Paris Climate Accord. 

These steps produced shockwaves on both sides of the Atlantic.  Lamenting that “Germany has lost faith in America,” the German daily Handelsblatt warned that President Trump is “entirely willing to tear down the geopolitical architecture that his country helped build after World War II—namely the principles of free trade and multilateralism based on international institutions.” The influential U.S. magazine Foreign Affairs entitled its May issue “Present at the Destruction?” and contemplated “the beginning of a new China-EU axis in global politics.”  German Chancellor Angela Merkel and French President Emmanuel Macron endorsed a European Commission plan to put aside 1.5 billion euros for joint defense spending amid fresh calls for the construction of a European army.   Merkel concluded that “We Europeans have to take our fate into our own hands.”

To be sure, although Atlanticism remains popular in the East, it is engendering  growing skepticism on both sides of the political spectrum throughout Western Europe.   Many Europeans do not share American perceptions of Russia as a hostile power and serious threat.  They are strongly resistant to increasing defense budgets to accommodate U.S. demands at a time of low growth and austerity.  They  understand that migration has been driven in large part by U.S.-led wars in the Middle East in which many of their own governments have participated.  These views are especially prevalent in Germany, where hundreds of thousands demonstrated against the Transatlantic Trade and Investment Partnership and, more recently, prominent social democrats such as former foreign minister and President Frank-Walter Steinmeier have warned against “provocative” NATO deployments in Poland and the Baltic states.  These sentiments contributed to the strong performance of Jeremy Corbyn’s Labour Party in the British elections of June 6. 

Yet, European governments are individually and collectively constrained by the imperatives arising from deep integration of the transatlantic economy, which limits their ability to challenge the strategic preferences of the American superpower. 

The transatlantic space remains by far the most important, profitable, and dense economic area in the world. The United States is the largest export market for many European countries, including Germany. However, while the transatlantic space accounts for 27% of global exports and 31% of global imports (in 2015), trade data vastly understate its significance.  The United States and Europe account for 2/3 of global outward foreign direct investment (FDI) and 57% of inward FDI.  The sales of U.S. foreign affiliates in Europe in 2016 exceeded U.S. exports to the world; those of majority-owned European affiliates in the United States were three times greater than European exports to the United States.   More than 2/3 of U.S. FDI went to Europe (in 2016), while only 21% flowed to the entire Pacific region.  The accumulated U.S. investment stock in China represents only 13% of that in the U.K. alone.  The deep interdependence of the transatlantic economy is especially pronounced in finance, the military industrial sector, and in U.S. natural gas and oil exports to Europe that are projected to increase substantially in the coming years as a result of the policies of the Obama and Trump administrations.  The transatlantic space is notable for its especially high levels of intra-firm trade.

Some observers propose a reorientation to Asia as an alternative to continuing European dependence on an increasingly unilateralist United States.  However, notwithstanding the rapid growth of the Chinese economy and the immense potential of the “belt and road” project, the deep integration of the Euro-Atlantic economy cannot easily be replicated in a Euro-Asian sphere. Moreover, if the Euro-Atlantic relationship is fundamentally asymmetrical, there are also important elements of reciprocity that explain why systematic protectionism will not be pursued and transatlantic negotiations on a trade/investment pact are likely to be resurrected.  For example, BMW’s factory in South Carolina is the largest in the world, producing 411,000 vehicles in 2016, 70% of which were exported.

Trump did eventually endorse NATO’s Article 5 on June 9 at a White House press conference with President Klaus Iohannis of Romania, expressing satisfaction that "The money is starting to pour in…other countries are starting to realize that it's time to pay up.”  He will reaffirm the commitment on his July 6 visit to Warsaw and the G-20 conference, where he is also expected to announce the sale of F-16 and F-35 fighters to Poland. Lost in the uproar over Article 5 is its purposeful vagueness, insisted upon by Washington in 1949 in order to guarantee full U.S. freedom of action.  Article 5 provides no obligation of military support, committing an alliance member to undertake only “such action as it deems necessary” in the case of an armed attack on an ally. 

Trump’s actions, and the outsized reaction to them on both sides of the Atlantic to them, were at least partly a result of domestic politics.  Facing intense political pressure and a zealous special prosecutor, the deliberate snub of NATO heads of state and withdrawal from the Paris Accord helped Trump to shore up his populist base and appease key allies (and donors) in the oil and gas sectors.  While the long-term implications of withdrawal from the Paris Accord are alarming, the immediate consequences for the global environment are less clear.  It is voluntary and, hence, non-binding.  U.S. compliance will be phased out over a 4-year period and future presidents (and even Trump) could renegotiate the accord.  U.S. states and corporations will continue to play a major role in reducing carbon emissions. 

Angela Merkel’s dramatic remarks were also made with a view to domestic politics - the coming September elections - but were carefully (and awkwardly) qualified: “The times in which we can fully rely on others are partially coming to an end.”   Recent events highlight the fragility of the U.S.-led Atlanticist order, but not its demise.  European leaders’ angst is a reflection of their inability to see beyond it. 

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.

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