Dec 01, 2020

The Art of the New Transatlantic Deal

The election of Joe Biden gives Europe the chance to reinvent the transatlantic relationship. To fully embrace this opportunity, the EU should offer the incoming US administration some concrete proposals in several areas.

President-elect Joe Biden
All rights reserved

The doom and gloom that has characterized transatlantic relations during the past four years under US President Donald Trump has virtually overnight been replaced with a burst of new energy and excitement. European governments have in no subtle terms welcomed Joe Biden’s election victory as a chance to restore closer ties with Washington and some such as German Foreign Minister Heiko Maas have even pledged to pursue a new transatlantic bargain with the incoming US administration. In the coming days, a joint paper from the European Commission and the External Action Service will outline a set of concrete set of proposals the European Union could engage the new Biden team on. There will be plenty of opportunities to discuss these proposals as Biden has been invited to attend a special NATO summit in Brussels and will also participate in both a virtual and an in-person summit with the EU early next year.

This frenzy is a welcome change and demonstrates that European leaders have learned a crucial lesson from the past elections of both Barack Obama and Donald Trump. In neither of those cases did Europe come prepared with any clear agenda or approach for engaging the new incoming US administration, thus leaving them to play catch up. This time around, however, the stakes are even higher. The transatlantic relationship, which constitutes the backbone of the rules-based international order, is in a dire state after Trump’s repeated assaults and serious divisions across the Atlantic. While Biden has declared that “America is back” and moved quickly to offer reassurances that the US remains committed to the transatlantic relationship, the specter of a possible return of an “America First” administration in 2024 or 2028 means that Europeans must now demonstrate that a more multilateral American diplomatic approach under Biden yields better policy results than Trump’s bullying and transactionalism.

Reinventing Atlanticism

The question facing European leaders is accordingly not whether transatlantic relations will improve under Biden—they most certainly will, though some difficulties will also remain—but rather how to reinvent Atlanticism for a new era. Here the starting point for the EU must be to take the initiative in order to advance an ambitious yet practical agenda during the first year or two of the new US administration. In the areas the EU hopes to engage the incoming Biden administration team on—such as global health, climate, technology, multilateralism, China, and trade—what concrete offers should it make in order to score some quick wins and help get the relationship with Washington back on track?

Global pandemic response: The global response to the COVID-19 pandemic has been marked by a clear lack of leadership from Washington as Trump withdrew the US from the World Health Organization and halted funding. Despite its initially wobbly handling of the pandemic, the EU ultimately came together on both a more coordinated European response and took the lead on global initiatives such as hosting a global vaccine fundraising conference, pledging additional funding to the WHO, and collaborating with Australia on launching an investigation into the WHO’s response.

Biden’s nominee for Secretary of State, Antony Blinken, has characterized Trump’s handling of pandemic as “going AWOL” and remarked that the US should “publicly hold Beijing to account but also seek to work with China, if possible.” The return of the US to the multilateral fora, such as rejoining the WHO, provides an obvious opportunity for the EU to reengage Washington on an ambitious reform agenda of the WHO to enhance transparency and speed up early warning. Even some of the reform proposals produced by the Trump administration which Trump walked away from could be revisited here. The EU should also urge Biden to join the COVAX initiative to ensure vaccine distribution to developing countries. In exchange, EU governments could commit to maintaining their increased levels of funding for the WHO, even if Biden unfreezes Trump’s funding cuts. Finally, the EU should offer to eliminate transatlantic tariffs on pharmaceuticals and medical supplies as part of broader trade talks.

Climate and the environment: Whereas European leaders were dismayed by President Trump’s withdrawal from Paris climate agreement and denial of man-made climate change, Biden is expected to take a very different approach, prioritizing countering climate change as a top domestic and foreign policy issue. Biden has pledged to announce on his first day in office that the US will reenter the Paris agreement. A further sign of Biden’s commitment is his appointment of John Kerry as special envoy to spearhead the administration’s global climate diplomacy efforts and the fact that climate has featured prominently in several congratulatory calls with foreign leaders. Though there are question marks about Biden’s ability to implement an ambitious domestic climate agenda if the Republicans maintain control of the Senate, European Commission President Ursula von der Leyen is right to note that EU-US cooperation on climate can help form “a backbone of a new global alliance.”

An early focus of transatlantic climate cooperation should be to align positions to push for ambitious new emissions targets at the upcoming COP26 in Glasgow in November. Beyond that, the EU should engage the Biden team on a wider transatlantic green new deal consisting of a common approach to carbon border taxation, setting new common standards around green technology and renewables, and joint approaches to green bonds and sustainable finance. Finally, the EU should capitalize on John Kerry’s previous work to protect global oceans—an area the European Commission has shown leadership on—and propose a new joint EU-US oceans initiative and joint stewardship of vulnerable marine environments in the Arctic.

Digital and technology governance: Under President Trump, the transatlantic tech agenda fell short as Washington disengaged from the OECD process on digital taxes and the US-EU Privacy Shield collapsed following a recent European Court of Justice court ruling. While details surrounding Biden’s digital agenda are still spotty, a new Democratic administration is likely to take a different approach, reflecting a growing desire to rein in “Big Tech.” The EU should try to work with the Biden administration to advance a common transatlantic digital agenda encompassing data protection, anti-trust regulation, online platform moderation and counter disinformation, and a digital services tax.

These conversations should ideally take place within a newly established EU-US Technology and Trade Council bringing together senior government and industry representatives from both sides. On data sharing, the EU should pledge to restore the US-EU Privacy Shield if Biden can start implementing federal data privacy standards, perhaps building on California’s Consumer Privacy Act. However, France and other EU governments must pledge to hold off on unilaterally imposing digital taxes until a broader agreement can be fleshed out within the OECD format next year, lest they want to risk unleashing an early clash with the new Biden team.

On countering hate speech and disinformation, rather than trying to impose its own rules on the US, the EU should take advantage of the growing debate in the US to seek agreement with Washington on banning algorithms used for manipulation and the incitement of violence. Moreover, given the US participation in the Global Partnership for AI under President Trump, there is potential for the EU to engage the Biden administration on ethical AI legislation based on shared values and norms, possibly as part of a dedicated new transatlantic working group on AI.

The EU should also capitalize on the growing transatlantic convergence on the issue of 5G to spearhead a joint agenda for deploying 5G and reaping benefits from its applications by investing in setting shared security standards and promoting reasonably priced alternatives to Chinese solutions. Finally, the EU should double down on setting shared standards for emerging technologies with the US, including working together to offset Chinese influence in international standard-setting bodies.

Multilateralism: Europeans have been deeply concerned about the US disengagement from multilateralism under President Trump. While disagreements on multilateralism are not new—George W. Bush, for instance, walked out of the Kyoto Protocol and the International Criminal Court—Europeans saw Trump as abandoning America’s traditional commitment to a rules-based order in favor of a dog-eat-dog competitive order and transactionalism. This galvanized Europeans to try to step up their own efforts—such as the Franco-German-led Alliance for Multilateralism—though with mixed results. In contrast, the Biden team has warned that Trump’s “America First” approach “simply creates a vacuum” and has pledged to commit to return the United States to multilateralism. Even so, the deeply-held US skepticism of the UN system will likely persist.

Europe should therefore engage Biden on an ambitious reform agenda of multilateral institutions to make these more effective and transparent. This will require a willingness on behalf of EU leaders to also acknowledge the shortcomings of international organizations, promote their integrity, counter authoritarian influence, and protect core values. For example, the EU could propose to the Biden administration a set of minimum goals for reform and jointly present these to China while also being willing to potentially downgrade the role of some organizations if reform proves impossible. At the same time, since Biden wants to build out new global partnerships and coalitions, Berlin and Paris should extend an arm for the US to join and pitch new ideas for the Alliance for Multilateralism and propose setting up a new D-10 to handle global supply chain issues between likeminded democratic partners. Meanwhile, the EU should offer to help play a leading role in shaping Biden’s Summit for Democracies which he has pledged to hold during his first year in office.

China: Despite Trump’s unilateral and hawkish approach toward China, there has actually been a growing convergence between the EU and the US when it comes to diagnosing the economic and strategic challenge posed by China’s rise. Yet, so far this has not translated into any meaningful joint agenda. Biden is expected to continue the focus on China but engage partners to a far greater extent in pursuit of a more coordinated approach toward Beijing. For example, Blinken has said that the Biden administration would use improved relations with the EU to pursue a reset of economic and tech relations with China as part of a coordinated approach. Blinken has rejected the notion of decoupling as “unrealistic” and expressed interest in engaging China on the pandemic and climate—views that are widely shared by Europeans.

The EU should seize on this opportunity to pursue a joint agenda with Biden on addressing shared challenges stemming from China. In this regard, the EU should seek to make quick use of the new EU-US Dialogue on China to coordinate positions on investment screening and export control restrictions, diversify critical supply chains, and align approaches to connectivity and infrastructure construction to offer attractive and high-standard alternatives to China’s Belt and Road. The EU and the US should also cooperate on addressing Chinese human rights abuses such as coordinating on sanctions over Hong Kong or Xinjiang. Similarly, the EU should offer to join hands with Washington in solidarity with countries such as Australia that are subject to repeated Chinese economic coercion.

Trade: Europeans have been highly critical of Trump’s protectionist approach to trade—such as quitting the TTIP and TPP trade talks, imposing unliteral Section 232 tariffs against European steel and aluminum makers, undermining the World Trade Organization, and pursuing bilateral “managed trade” deals with China. The Biden team has signaled that it would end “artificial trade wars” against Europeans and seek to coordinate more on global trade issues.

Though a return to comprehensive TTIP-style transatlantic trade talks is very unlikely, Europeans can expect that Biden will at least help stabilize the trade relationship. More modest objectives in the near term could be to sign a bilateral trade in services agreement, reduce nontariff trade barriers, build a transatlantic digital economy, and promote regulatory cooperation especially on emerging technologies that can provide the basis for new global standards. To advance such a fruitful trade agenda with the new US administration, Europe should first of all commit to helping resolve the 16-year old Boeing-Airbus legal dispute, including holding back imposing additional tariffs until a resolution can be found so as to avoid a further tit-for-tat. In order to kickstart new bilateral trade talks, Paris must also be willing to discuss agricultural market access.

To fix the broken WTO appellate court, the EU must commit to a far-reaching WTO reform agenda to forcefully address the role of China’s excessive state subsidies and forced technology transfers. The EU should ask the US to file a joint claim against China while also being open to pursuing other multilateral frameworks should China ultimately resist such reforms. Finally, the EU should engage the Biden administration on a shared transatlantic industrial policy so as to avoid both sides slipping toward protectionism. This would include new initiatives to make supply chains more resilient and to shape a more common approach investment screening and export control of critical technologies.

Toward a More Strategic Partnership 

One thing is certain: despite the election of Joe Biden, the transatlantic relationship of the past will not return. Too much has changed since 2016 under President Trump. But nor should this be the goal: nostalgia about the past will get us nowhere. While Biden is no panacea against the structural forces threatening to weaken transatlantic relations, the fact that for the next four years the Oval Office will be inhabited by a staunch Atlanticist provides a historical opportunity at a critical juncture to reinvent the traditional transatlantic relationship. A key objective in this regard must be to upgrade and elevate the EU-US partnership, making it more strategic in nature and oriented around addressing the most critical challenges facing the rules-based international system.

Here Europe has the opportunity to pivot back to the transatlantic relationship by taking the initiative, making bold but practical offers, and setting out its own expectations for the incoming Biden administration. Meanwhile, the Biden administration would be wise to promote rather than discourage the EU’s quest for greater sovereignty, recognizing that in a time of growing competition from an increasingly assertive China on the international stage having a stronger and more capable Europe as its key partner is a tremendous asset.

Such a new transatlantic bargain—with a Washington that remains fully committed to Europe and multilateralism, and a stronger EU still firmly anchored in the transatlantic bond with the United States—would not only be a welcome respite from the divisions and turbulence of recent years. It would also offer the greatest chance to make the transatlantic relationship relevant for the years to come long after Biden is gone.

Erik Brattberg is the Director of the Europe Program and a Fellow at the Carnegie Endowment for International Peace in Washington, DC.

Read more by the author

Erik Brattberg
Torrey Taussig

Bonding over Beijing

How to deal with China will be one of the dominant issues in transatlantic relations in the coming years.