William Krist's Blog, page 47

Raising a caution flag on US financial sanctions against China

China’s policies in Xinjiang, Hong Kong, and the South China Sea and its ongoing support for Iran, North Korea, and Venezuela pose major challenges for the United States, where bipartisan pressure is growing to ramp up punitive sanctions against leading Chinese firms and financial institutions. Financial sanctions freeze the US assets or bar US entry of the targeted individuals and firms and prohibit US financial firms from doing business with them. Schott explains why US officials should carefully weigh the risks to international financial markets and US economic interests before imposing punitive sanctions on major financial institutions engaged with China. The collateral costs of such sanctions would be sizable, damaging US producers, financial institutions, and US alliances. By restricting access of major banks to international payments in US dollars and barring use of messaging systems like SWIFT, tougher US financial sanctions would effectively “weaponize” the dollar; friends and foes alike would be pushed to seek alternatives to dollar transactions that, over time, would weaken the international role of the dollar. Instead of doubling down on current unilateral financial sanctions, US policy should deploy sanctions in collaboration with allies and calibrate trade and financial controls to match the expected policy achievements.

To read the full brief, please click here.

Raising a caution flag on US financial sanctions against China

Something Must Change: Inequities in U.S. Policy and Society

Introduction

For too long, our health care system and economy have marginalized many American communities. Throughout the 116th Congress, the Committee on Ways and Means has explored the root causes of health and economic disparities, inequitable outcomes in national maternal morbidity and mortality, vulnerabilities in our ability to adapt to climate change, and the devastating acts of gun violence tearing apart communities across the country. Most recently, this Committee examined the disproportionate impact of the coronavirus (COVID-19) on communities of color and people with disabilities. The expert testimony and solutions proposed during each of these diverse hearings underscored two key principles: Health does not exist in a vacuum, and achieving health equity will require addressing the economic and social inequities that have long persisted within our country. 

For over a century, health services research has demonstrated the irrefutable link between disparities in health and inequities in employment, income, and wealth opportunities. Pre-pandemic data show that on average, Americans can expect to live shorter and less healthy lives compared to people living in every other wealthy democracy – and, yet, we far outspend the average developed country on health care. Now, the COVID-19 crisis has highlighted how unchecked vulnerabilities within the United States (U.S.) health system cause inequities and impact every other aspect of our lives – how we earn, learn, and live in our communities. In light of these lessons learned, we must prioritize efforts to improve the return from our significant investments in the U.S. health system. 

Our future depends on transcending traditional health and discrimination frameworks to achieve a 21st century vision that creates the conditions for all Americans to thrive. As the committee with jurisdiction over health, tax, and trade policy, as well as social safety net programs, the Ways and Means Committee is well-positioned to address the role that racism, ableism, and other social, structural, and political determinants play in perpetuating health and economic inequity. This report outlines the intersection between health and economic well-being and describes aspects of policies and practices relevant to the Committee’s jurisdiction and efforts to achieve health and economic equity in the United States.

The excerpt on trade below is from page 20 onwards.

Access to the Benefits of Trade for Individuals and Communities

Commonplace discussions about the objectives of international trade policy generally identify and promote the interests of economic sectors – industrial, agricultural, and services, for example. Seldom have trade’s effects on individuals or communities been considered, much less prioritized as such, beyond in any but the most abstract terms. When trade policymakers have taken the time to make the interests of individuals and communities a priority, however, their efforts have generated substantial political support for those policies. Consequential developments in recent years – and in 2020 in particular – are challenging policymakers to investigate further the role that trade policy has played in either perpetuating or exacerbating unequal access to the benefits of trade for certain individuals and communities – both in the U.S. and worldwide. In 2020, the COVID-19 pandemic has highlighted the fact that these disparities in outcomes among different communities result from structural and systemic inequities U.S. laws and policies create – inequities that emerged as far back as some of the first U.S. international economic policies involving the exchange of goods and people.

Globally, the pandemic has also revealed the fragility of our international supply chains and the inequity in the treatment of workers in low-cost labor countries where manufacturing has become concentrated. Predominantly non-White workers from developing countries and former colonies across the world suffer compromised labor conditions while producing goods for U.S. and global consumers. Unequal contracting and employer relationships that have developed from the arbitrage that conventional trade policies enable have encouraged a spectrum of exploitative practices, including the prevalence of forced labor in certain regions. In their attempts to minimize financial losses related to COVID-19, U.S.- and European-based multinational companies have left already low-wage workers in developing countries – also struggling to survive the pandemic – without pay. In this way, COVID-19 revealed how globalization has incentivized supply chain models that depend on finding the lowest cost workforce for production, regardless of living or working conditions, with dire consequences for public health, supply chain resilience, and a disparate impact on those already bearing the heaviest burdens in the existing global economic order. Indeed, some have called on brands and global retailers to remedy inequitable purchasing practices and commit to support millions of garment workers of color around the world who have enabled substantial industry profits, particularly in light of recent corporate public actions to promote racial justice.

For the last 50 years, the U.S. has pursued a policy of aggressive trade liberalization and experienced a painful decline in manufacturing and redistribution of jobs to the services sector. The loss of manufacturing jobs and the increase in service sector work has exacerbated income inequality more broadly because those manufacturing jobs often had union benefits and wages that supported middle- and working-class families, whereas service sector jobs generally did not. In recent years, U.S. service sector jobs have also faced the pressures of globalization and losses to lower-labor-cost countries. Trade policies favoring financial and corporate interests over those of individuals and their communities have yielded lowered labor conditions and standards for American workers in the form of decades-long wage stagnation, weaker labor protections, limited options for quality jobs, and increased unemployment.

Black workers have faced even harsher obstacles to recover from globalization-related job losses due to systemic and pervasive racial disparities across the labor market and in accessing public services. The loss in manufacturing jobs disproportionately impacted Black workers in a multitude of ways, including negatively affecting their wages, employment, marriage rates, house values, poverty rates, death rates, single parenthood, teen motherhood, child poverty, and child mortality. In addition to increases in precarious work, the decline in union jobs has also been cited as a contributing factor to growing inequality. In fact, union jobs help reduce disparities Black workers suffer by enabling more equitable labor conditions that help protect them from discriminatory practices. At the same time, trade liberalization has impacted immigrant and Latino workers in the U.S. who have also suffered job losses and wage stagnation.

An examination of U.S. policies affecting agricultural production and trade, as well as the historical realities that helped shape them, reveals racial inequities in both their development and impacts. The production of certain commodities in the U.S. can be traced back to the founding of the original colonies as part of trans-Atlantic trade when forced labor powered production and comprised a key element of the triangular trade flow. Those commodities continue to enjoy robust support through U.S. government policies – support that is often strategically sheltered from strict multilateral trade disciplines. U.S. policies and systemic inequities have over time restricted the rights and ability of Black Americans to acquire or retain land for farming; Black farmers currently make up less than two percent of all U.S. farmers. Furthermore, policies and practices have been documented that further restricted the ability of Black farmers to access the government support that other farmers receive. Taken together, it appears that benefits and prosperity that U.S. farmers and agricultural producers enjoy from trade and attendant policies lack inclusivity and reflect significant disparities between communities. Thus, such factors must be revisited to promote economic equity.

Some have criticized the globalization resulting in large part from U.S. trade policies of the past decades for a redistribution of wealth that places costs disproportionately on those that are socially and economically disadvantaged in other countries as well. The current application of U.S. trade policies has contributed to imbalanced economic benefits in developing countries and broader unrealized development goals. The disproportionate benefits for corporate entities over individuals and local communities have dramatically impacted the economies and demographics of some developing countries. The resulting job losses in those foreign nations have in many cases spurred mass forced migration. Similarly, U.S. preference programs have historically benefitted a small set of developing countries and have largely left the least developed countries behind. A thoughtful, probing re-examination of the modes and objectives of U.S. trade policy in light of their domestic and international effects is necessary now more than ever before. Only then can reforms and new approaches be adopted to produce a sustainable and inclusive prosperity that prioritizes meaningful economic benefits for individuals and communities, and others who have been left out, overlooked, and exploited.

To read the full report, please click here

WMD Health and Economic Equity Vision_REPORT

A Green Industrial Policy for Europe

The European Green Deal aims to make Europe the first climate-neutral continent by 2050. This is not going to be an easy journey. To be successful, the European Green Deal will have to foster major shifts in the European industrial structure, including transitions from fossil fuels to renewable energy and from combustion engine cars to electric cars. Shifting economies from brown to green would be a major, historic socio-economic transformation.

In this context of broad, paradigmatic, change for European industry, a ‘green industrial policy’ will be fundamental to Europe’s climate change ambitions. But what is green industrial policy? What market failures must it address? Unlike traditional industrial policy, green industrial policy must be directed to twin goals of climate protection and social welfare. Green industrial policy initiatives in the European Union so far, however, have been piecemeal and fragmented. This Blueprint examines how past mistakes can be avoided and how the EU can develop a coherent green industrial policy that will serve the goals of the European Green Deal.

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Global Value Chains: Overview and Issues for Congress

Global Value Chains: Overview and Issues for Congress

Global value chains (GVCs) divide production processes into discrete stages located around the globe. Using GVCs, companies can organize different parts of their value chain strategically, such as locating in a target customer’s home market or a competitor’s base. When deciding where to locate particular stages of production, firms typically consider key inputs such as raw materials and labor—along with associated accessibility, costs, and quality—and domestic policies that may encourage or discourage different types of investment. Congress, in particular, has an interest in understanding the economic and broader policy implications of the ongoing evolution of global value chains on U.S. businesses and consumers.

Since the 1990s, GVCs have shaped the global economy. More than two-thirds of world trade occurs via GVCs each year, representing a shift in how trade and commerce are conducted as trade in intermediate goods and services exceeds that of commodities and finished goods.

Unilateral trade liberalization and lower trade barriers made possible by free trade agreements (FTAs) and the creation of the World Trade Organization (WTO) have spurred GVC growth. Technology advancements and new internet-enabled services that lower costs and provide seamless connections around the world have also been a major factor. Consequently, companies and countries can focus on comparative advantages and specialize in different products and services within value chains, opening economic opportunities and new markets for small businesses and developing countries.

Despite the growing presence of GVCs in the global economy, recent events have highlighted the potential risks and vulnerabilities of GVCs, particularly those that are concentrated in a particular region or reliant on a single supplier. Worldwide natural disasters, emergencies, and other policy-driven circumstances, such as the Coronavirus Disease 2019 (COVID-19) pandemic, have shown that GVC links integrate and create interdependence between economies, which can leave companies vulnerable to external shocks, including interruptions in other countries. At the same time, interdependence can create broader economic growth and strengthened relationships among nations. After a period of rapid globalization through the 1990s and early 2000s, the growth of GVCs has slowed in recent years.

Concerns about U.S. value chains and the ongoing COVID-19 pandemic have raised questions about potential risks that GVCs may pose for particular economic sectors, the economy more generally, and, depending on the product and degree of external dependencies, national security. For example, recent events have shown that certain sectors, such as medical supplies and information technology and communications equipment, are susceptible to risks if the production of key components is concentrated in one country or controlled by one company. Some companies are seeking to diversify their supplier base across countries and regions, in part to increase their resilience and to lower their risk exposure. Some analysts foresee greater shifts in the future. To mitigate risks and vulnerabilities, companies may (1) rethink their business models and seek to build in redundancies for resilience, (2) focus more on shorter local or regional value chains, and/or (3) utilize emerging technologies to lower and diversify risks and costs. These shifts will likely vary across industry sectors, depending in part on the location and availability of suppliers and customers, as well as U.S. and foreign trade and investment policies.

In response to the risks described above, many policymakers, companies, and other stakeholders are reevaluating the role of GVCs in the economy. Several factors influence the formation and configuration of GVCs, including new and updated FTAs (e.g., the U.S.-Mexico-Canada Agreement), along with changes in import policies, rules of origin, export controls, investment regimes, and labor and manufacturing costs. These factors provide Congress with multiple levers to influence corporate decisions. Some U.S. and foreign policymakers have introduced legislation and other measures to incentivize, or in some cases force, companies or certain industries to shorten their value chains and increase domestic production. Such measures could affect the accessibility, quality, and price of goods sought by U.S. buyers.

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The Biden-Harris Administration and the Future of Supply Chains in the Americas

The month of November 2020 marked a turning point for the United States as voters cast their ballots at rates not recently seen in a US election. The historic race saw around 65 percent of the voting population in the United States participating, the highest in more than one hundred years. With three hundred and six Electoral College votes in their favor, former US Vice President Joseph R. Biden and California Senator Kamala Harris will become the next president and vice president of the United States. 

The atmosphere of uncertainty that characterized the 2020 US election was consistent with the rampant uncertainty that has plagued 2020 as a whole. The global COVID-19 pandemic, which has taken the world by storm, has disrupted lives, upended economies, and destabilized supply chains. 

This disruption was profoundly felt in the Western Hemisphere, where suppliers in the Americas were forced to adapt sourcing and inventory strategies as suppliers in Asia and other regions shut down operations, where companies faced shortages and interruptions, and where costs soared as necessary raw materials became harder to source. Even as grocery-store shelves quickly emptied, food and basic necessities became scarce for many, and personal protective equipment (PPE) went on back order, the world stepped up to diversify sourcing and manufacturing locations, setting the stage for the modernization and increased resilience of supply chains in the coming years. 

Supply remains crucial as governments, businesses, and individuals brace for a second wave of shutdowns and prepare to bounce back post-pandemic. A key priority for the next US administration will be working alongside partners and allies in the Western Hemisphere to assure supply-chain resilience is achieved and prioritized. 

President-Elect Joe Biden has pledged to build broad-based supply-chain resilience and to work collaboratively with the private sector to improve productivity and avoid unnecessary costs and bureaucracy.1 Snap polls of businesses show they are counting on the next US administration to deliver on this promise.2 As the inauguration of the forty-sixth president of the United States approaches, the question becomes: how can cooperation across the Americas, under a Biden administration, impact the future of supply chains in the Americas?

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COVID-19 and Domestic PPE Production and Distribution: Issues and Policy Options

COVID-19 and Domestic PPE Production and Distribution: Issues and Policy Options

The novel Coronavirus Disease 2019 (COVID-19) and its rapid emergence as a pandemic have highlighted issues relating to the production and distribution of personal protective equipment (PPE). PPE refers to worn articles or equipment that help minimize exposure to various hazards, including infectious pathogens. Given the role that PPE plays in mitigating the spread and reducing the impacts of COVID-19, PPE demand has spiked both globally and domestically while supply has been undercut by both rapid consumption as well as supply chain disruptions. According to multiple federal agencies, including the Government Accountability Office, the Food and Drug Administration, and various independent organizations, PPE continues to be in short supply, which has led to broad congressional and public interest in PPE production and distribution issues. The availability of effective PPE is critical to the ongoing pandemic response, but also has broader public health, emergency preparedness, and national security implications.

This report considers aspects of domestic production and distribution of PPE in the context of the COVID-19 pandemic. Specifically, the report considers (1) the availability of PPE supplies, including an assessment of PPE demand related to the COVID-19 pandemic; (2) federal actions and activities undertaken to increase PPE supplies in response to the pandemic, organized by executive agency and program; and (3) other policy options under consideration concerning PPE production and distribution, also organized by executive agency and program.

Overall, this report notes that data limitations and conflicting accounts impede the complete assessment of PPE supply chains, and this may undermine federal (as well as nonfederal) efforts to respond effectively to the COVID-19 pandemic. To the extent that data is available, current PPE production and distribution channels appear to continue to be insufficient compared to reported need. Various mechanisms that may be utilized to increase PPE supply or productive capacity, such as the provisions in the Defense Production Act of 1950 (DPA), appear to be applied selectively, and implemented unevenly, potentially based on narrow experience and limited administrative infrastructure within the federal government to oversee and manage its use in a national emergency context.

To download the full report, please click here.

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Michael H. Cecire is the Coordinator of this reports and an Analyst in Intergovernmental Relations and  Economic Development Policy for the Congressional Research Service.

Agata Bodie is an Analyst in Health Policy for the Congressional Research Service.

Frank Gottron is a Specialist in Science and Technology Policy for the Congressional Research Service.

Victoria R. Green is an Analyst in Health Policy for the Congressional Research Service.

L. Elaine Halchin is a Specialist in American National Government for the Congressional Research Service.

G. James Herrera is an Analyst in U.S. Defense Readiness and Infrastructure for the Congressional Research Service.

Erica A. Lee is an Analyst in Emergency Management and Disaster Recovery for the Congressional Research Service.

Heidi M. Peters is an Analyst in U.S. Defense Acquisition Policy for the Congressional Research Service.

Andres B. Schwarzenberg is an Analyst in International Trade and Finance  for the Congressional Research Service.

Kavya Sekar is an Analyst in Health Policy for the Congressional Research Service.

Michael D. Sutherland is an Analyst in International Trade and Finance for the Congressional Research Service.

Karen M. Sutter is a Specialist in Asian Trade and Finance for the Congressional Research Service.

 

Moving Beyond COVID-19: Vaccines and Other Policy Considerations in Latin America

Trade

For much of the region with limited manufacturing capacity, trade will be the most realistic pathway to meeting domestic vaccine needs during the current crisis. Even for major vaccine producers in Latin America, trade is of paramount importance. Vaccines are a highly complex compound involving numerous ingredients and stages of production. Few countries in the world possess all the necessary specializations and basic materials to produce a competitive and fully “local” vaccine. A made-in-Latin-America vaccine could entail active pharmaceutical ingredients (APIs) from China or formulation development in India, as well as adjuvants from Chile processed in Sweden. The import of intermediate goods is critical to the seamless production and assembly of final goods (vaccines) used for domestic consumption or export.

Given the globalized nature of vaccine manufacturing, governments in Latin America and beyond must ensure unimpeded trade flows across borders. Protectionist temptations can be hard to resist amidst global shortages, especially for countries with greater vaccine self-sufficiency. But these measures rarely pan out as desired and could result in dire regional and global consequences, including an unfortunate scenario of “vaccine nationalism.”

The breakdown of global trade in medical supplies earlier this year provided a fresh reminder of the still-present risks of protectionism. In March and April, for instance, eighty countries imposed export restrictions on medical supplies and equipment. This included at least seven countries in Latin America and the Caribbean region, as well as the world’s top three suppliers [China, the United States, and the European Union (EU)], which collectively account for 68.2 percent of regional imports of these critical goods. To protect lives and livelihoods, vicious cycles of commercial isolationism and retaliation must be avoided at all costs.

Specifically, Latin American and Caribbean policymakers can take actions to tackle shared challenges in trade on at least three levels. First, several viable quick wins exist at the national level. Governments should bring down two-way trade barriers on essential medical products and inputs, including import tariffs and export restrictions. Trade facilitation can reduce additional nontariff barriers through streamlined customs procedures and border crossings, electronic filing, expedited certifications and licensing, etc. Brazil, for instance, suspended anti-dumping and simplified administrative processes for import and export licensing of PPE and medical devices. Similar measures should be upheld to safeguard the trade of vaccines, as well as therapeutics, and other lifesaving products and services.

Second, international coordination between governments can further galvanize and amplify country-level actions. The Joint Ministerial Statement to ensure supply chain connectivity amidst the COVID-19 situation, initiated by Singapore and New Zealand in March, is an example to follow. As of July, ten other countries, including China, have joined the initiative, pledging their commitment to keep trade lines open for essential goods. Two Latin American countries, Chile and Uruguay, have also signed on.

Similarly, multilateral fora such as the Asia-Pacific Economic Cooperation (APEC) and regional integration processes such as Mercosur and the Pacific Alliance are other potential avenues to crowd in best trade practices. APEC members, including three Latin American countries, have issued at least three official declarations on trade facilitation. The Pacific Alliance is playing a critical role in trade policy coordination in Latin America and internationally through its COVID-19 Action Plan and ASEAN-Pacific Alliance Work Plan.

Third, collaboration between the public and private sectors is imperative. Delayed arrivals and departures of essential goods can be costly, especially for time-sensitive products like vaccines. Most vaccines are transported in refrigerated (or frozen) conditions and have limited room temperature shelf life, e.g., between two to twelve hours for Pfizer and Moderna’s COVID-19 vaccines. Even before COVID-19 disruptions, in 2019, the average time to clear exports through customs in Latin America and the Caribbean region was eight days; the average time associated with border compliance for imports was 2.3 days. Accelerating clearance can be achieved through efficient prioritization, nonintrusive inspection, digitization, etc. In addition, airports, seaports, and border authorities should work closely with logistics companies, vaccine producers, and various types of Authorized Economic Operators (importers, brokers, warehouses, and others). New requirements, processes, schedules, or contingent plans that may arise during the pandemic must be communicated clearly and promptly.

Another key area of public-private collaboration in trade is “hard” infrastructure. Enhanced interconnectivity can revitalize regional exports and intra-regional trade, benefitting pharmaceutical and many other supply chains in Latin America, making them more competitive. A 1 percent reduction in transport costs—achievable through infrastructure improvements—could boost overall manufacturing exports between 2 percent and 7.8 percent in Brazil, Chile, Colombia, Mexico, and Peru. In the context of the COVID-19 pandemic, reduced shipping costs and time benefit not only regional vaccine acquisition and production, but in-country distribution of the vaccines and treatments. 

To read the full brief, click here.

Moving-beyond-COVID-Vaccines-and-Other-Policy-Considerations-in-Latin-America

Pepe Zhang is an associate director at the Atlantic Council’s Adrienne Arsht Latin America Center.

© 2020 The Atlantic Council of the United States.

 

Making Transatlantic Relations Green: A Common Agenda For Climate Action

Introduction

US President-elect Joseph R. Biden Jr.’s victory in the November 3rd election has raised hopes for greater transatlantic cooperation. On the campaign trail, the former Vice President vocalised his desire to repair relations with American allies, in particular Europe. His pick for Secretary of State, Antony Blinken, is an avowed Atlanticist and proponent of multilateral institutions. As part of a more multilateralist agenda, Biden has stressed that combating climate change will be one of his main priorities. He pledged to rejoin the 2015 Paris Climate Agreement, has proposed a $2 trillion climate plan to make the US climate neutral by 2050, and appointed former Secretary of State John Kerry as his Special Presidential for Climate to demonstrate his commitment to addressing the crisis.

Despite these encouraging signs, the Biden administration will not be a cure-all for climate, mostly as a result of the domestic challenges that it will face. Although his plan is ambitious compared to previous presidents, Biden’s climate proposals fall well short of the left-leaning “Green New Deal” sponsored by Representative Alexandria Ocasio-Cortez and Senator Edward Markey. Furthermore, Biden will restrict –but not ban– fracking and picked several advisers with ties to fossil fuel industries. Politically, any climate agenda will face headwinds (if not outright obstruction) from a likely Republican-controlled Senate and a right-leaning judiciary. While these limitations pale in comparison to the outright climate-denial of the Trump administration, it is still crucial for advocates of transatlantic climate cooperation to be mindful of them. In light of the ambitions and constraints of the incoming Biden administration, this policy brief suggests key areas where the US and the EU could work together to deliver global climate action in the next two years.

Conclusion

President-elect Biden will not have free rein to implement his climate action program. In addition to judicial barriers, Democrats will most likely not control the US Senate. And with Democrats holding only a slim majority in the House of Representatives, and midterm elections usually swinging against the president’s party, Republicans may retake the House in 2022. With so much uncertainty on the horizon, the next two years are therefore crucial to accomplish climate goals.

After Biden takes office on January 20th, 2021, the EU must act with a sense of urgency. It should engage the new US administration on areas where progress can be entrenched in the next two years: relaunching global climate diplomacy, developing a global green recovery program, accelerating clean energy innovation, cooperating on common standards and phasing out of coal. This will be an uphill battle but Europeans need to make the best of the coming two years, They must hope that new ambitious policies will shift climate economics and politics enough to help change the calculus for elected representatives and firms alike, who may realize that climate-friendliness is the most viable way to re-election and a successful business. This is the surest way to forge a substantive American contribution to global climate action.

To read the full brief, please click here.

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Thomas Pellerin-Carlin is the Director of the Energy Centre at the Jacques Delors Institute in Paris.

Edward Knudsen is a Research Associate for the Dahrendorf Forum and Affiliate Research Fellow at the Jacques Delors Centre in Berlin.

A New EU-US Agenda for Global Change

Introduction

The relationship between the European Union and the United States is unique and built on shared history, shared values and shared interests. The transatlantic partnership was born of a promise of collective peace, progress and prosperity. After the Second World War, the Marshall Plan helped rebuild Europe’s communities and economies. The North Atlantic Treaty Organisation (NATO) ensured our collective security. Together, Europe and the US helped design and build the multilateral rules-based system to tackle global challenges. For people on both sides of the Atlantic, transatlantic ties are a vital element in our societies, identities, economies and personal lives.

Today, our combined global power and influence remains unrivalled. We are home to nearly a billion people and are the two largest blocs of advanced democracies. We account for about a third of the world’s GDP and trade, and 60% of foreign direct investment. The density and openness of transatlantic trade and investment creates millions of jobs and shapes large parts of the global economy. We have the reach to set regulations and standards that are replicated across the world. We are the primary drivers of innovation and the world’s research powerhouses, developing technology from 5G to vaccines.

This combined power and influence is indispensable to anchor global cooperation in the 21st century – whether it be on health, security, climate, trade and technology, or on the multilateral rules-based order. Our joint commitment is essential in a world where authoritarian powers seek to subvert democracies, aggressive actors try to destabilise regions and institutions, and closed economies exploit the openness our own societies depend on.

Just as this need for cooperation has become all the more important, so has the transatlantic partnership become in need of maintenance and renewal. In recent years, our relationship was tested by geopolitical power shifts, bilateral tensions and retreats to unilateral policies.

With a change of administration in the US, a more assertive Europe and the need to design a post-corona world, we have a once-in-a-generation opportunity to design a new transatlantic agenda for global cooperation – based on our common values, interests and global influence. This should be the linchpin of a new global alliance of like-minded partners. This comes at a time when there is a commonality of outlook and priorities on domestic and international agendas between the incoming US administration and the European Union.

As we set about defining this new agenda, we should not embark on a nostalgic search for the global order of past decades or the transatlantic partnership of past generations. The US and the EU have changed, as have power dynamics and geopolitical and technological realities.

We should also not fall into the trap of false debates that seek to oppose a stronger Europe and a stronger transatlantic partnership. A united, capable and self-reliant EU is good for Europe, good for the transatlantic partnership and good for the multilateral system – they are mutually reinforcing not mutually exclusive.

It is in this spirit that the EU is putting forward a proposal for a new, forward-looking transatlantic agenda for global cooperation, centred on areas where our interests converge, our collective leverage can best be used and where global leadership is required.

joint-communication-eu-us-agenda_en

To download the full communication, please click here.

JOINT COMMUNICATION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL AND THE COUNCIL: A new EU-US agenda for global change

Introduction

The relationship between the European Union and the United States is unique and built on shared history, shared values and shared interests. The transatlantic partnership was born of a promise of collective peace, progress and prosperity. After the Second World War, the Marshall Plan helped rebuild Europe’s communities and economies. The North Atlantic Treaty Organisation (NATO) ensured our collective security. Together, Europe and the US helped design and build the multilateral rules-based system to tackle global challenges. For people on both sides of the Atlantic, transatlantic ties are a vital element in our societies, identities, economies and personal lives.

Today, our combined global power and influence remains unrivalled. We are home to nearly a billion people and are the two largest blocs of advanced democracies. We account for about a third of the world’s GDP and trade, and 60% of foreign direct investment. The density and openness of transatlantic trade and investment creates millions of jobs and shapes large parts of the global economy. We have the reach to set regulations and standards that are replicated across the world. We are the primary drivers of innovation and the world’s research powerhouses, developing technology from 5G to vaccines.

This combined power and influence is indispensable to anchor global cooperation in the 21st century – whether it be on health, security, climate, trade and technology, or on the multilateral rules-based order. Our joint commitment is essential in a world where authoritarian powers seek to subvert democracies, aggressive actors try to destabilise regions and institutions, and closed economies exploit the openness our own societies depend on.

Just as this need for cooperation has become all the more important, so has the transatlantic partnership become in need of maintenance and renewal. In recent years, our relationship was tested by geopolitical power shifts, bilateral tensions and retreats to unilateral policies.

With a change of administration in the US, a more assertive Europe and the need to design a post-corona world, we have a once-in-a-generation opportunity to design a new transatlantic agenda for global cooperation – based on our common values, interests and global influence. This should be the linchpin of a new global alliance of like-minded partners. This comes at a time when there is a commonality of outlook and priorities on domestic and international agendas between the incoming US administration and the European Union.

As we set about defining this new agenda, we should not embark on a nostalgic search for the global order of past decades or the transatlantic partnership of past generations. The US and the EU have changed, as have power dynamics and geopolitical and technological realities.

We should also not fall into the trap of false debates that seek to oppose a stronger Europe and a stronger transatlantic partnership. A united, capable and self-reliant EU is good for Europe, good for the transatlantic partnership and good for the multilateral system – they are mutually reinforcing not mutually exclusive.

It is in this spirit that the EU is putting forward a proposal for a new, forward-looking transatlantic agenda for global cooperation, centred on areas where our interests converge, our collective leverage can best be used and where global leadership is required.

To download the full communication, please click here.

joint-communication-eu-us-agenda_en