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Sep 29, 2022

Future-Proofing Transatlantic Relations (I): Repositioning the Alliance

The best way to strengthen the transatlantic partnership is to address immediate challenges in ways that also position both sides to cope with, and even thrive in, a dawning “Age of Disruption.”

NATO leaders gather for a group photo, ahead of a dinner at the Prado Museum in Madrid, June 29, 2022.
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One of Russian President Vladimir Putin’s singular achievements has been to reinvigorate the transatlantic alliance. His ongoing invasion of Ukraine, which is also an assault on Europe and basic principles underpinning the global order, has revived the relationship between the United States and Europe, one that had been plagued by mutual hesitations and doubts.

However, just as earlier US-European squabbles masked deeper wellsprings of transatlantic strength and resilience, today’s unity belies some uncomfortable truths. State and non-state actors are weaponizing flows of energy, food, people, information, data, drugs, medicines, goods, and services upon which societies around the world rely. Putin’s war has deepened Europe’s strategic dependence on the United States and exposed its dangerous energy dependence on Russia.

These dangers are amplified by Russia’s entente with China, as well as by Beijing’s challenges to the global commons and Indo-Pacific regional order, its investments in defense-relevant industries and strategic ports, and its efforts to disrupt basic principles and arrangements critical to the security and prosperity of the North Atlantic region. Incessant (and unrealistic) European debates about how and when the United States might “pivot” away from Europe distract from a more troubling reality: China has already pivoted to the Atlantic. As a consequence of all these developments, the North Atlantic and the Indo-Pacific have become strategically linked.

“The Age of Disruption”

Fortunately, the United States and Europe are better positioned to tackle these challenges today because of important steps they have taken in the past two years to reinvigorate their partnership after the tumult of the previous four years. Looking ahead, the two sides of the Atlantic can best future-proof their partnership by addressing immediate challenges in ways that also position themselves to cope with, and even thrive in, a dawning “Age of Disruption.”

In the security realm, Ukraine remains the crucible of change. The priority task is to back Ukraine politically, economically, and militarily, including with higher-end military armaments and equipment than NATO allies have thus far been willing to provide, and to be prepared to counter Russian escalatory actions, whatever and wherever they may be. Support should also be extended to Moldova and Georgia.

Longer-term, the North Atlantic alliance must reposition itself in two ways. First, allies must follow through on NATO’s Madrid summit decision in June to move from small tripwire forces in the Baltic states and Poland, and provisions for reinforcement, to robust forward defense and deterrence by denial all along the alliance’s eastern flank—the operational implication when allied leaders say they will “defend every inch” of NATO territory. This change will require more US and European troops deployed to NATO’s east, new infrastructure by host nations to receive those troops, a new command structure, and a revised concept for military operations. 

Second, NATO must address the longer-term challenge of rebalancing transatlantic defense, with two military goals in mind. Over the coming decade, European allies should build their conventional military capabilities to a level that would provide half of the forces and capabilities, including the strategic enablers, required for deterrence and collective defense against major-power aggression. Should a conflict simultaneously break out with China in Asia and Russia in Europe, the United States may not be able to deploy adequate reinforcements to Europe. That means that the European allies need to be able to pick up the slack. In addition, Europe should become the “first responder” to most crises along its southern periphery. European allies should develop capabilities to conduct crisis management operations without today’s heavy reliance on US enablers such as strategic lift, refueling, communications, and intelligence.

In the economic sphere, the priority should be to maintain, and where possible strengthen, sanctions against Russia, and to take joint or complementary steps to address the inflationary pressures and supply chain disruptions currently roiling our societies. The $6 trillion transatlantic economy offers both parties a vibrant and resilient geo-economic base from which to address and shape a world of greater competition and ongoing disruptive challenges. In 2021, US-EU trade in goods and services is estimated to have hit an all-time high of $1.3 trillion—42 percent more than the European Union’s trade with China. US companies in 2021 earned an estimated $300 billion from their operations in Europe—23 times what they earned from operations in China. The US’ asset base in Germany is more than double its assets in China. The total stock of US FDI in Europe is four times more than US investment in the entire Asia-Pacific, and Europe’s FDI stock in the US is three times more than that of Asia. Transatlantic R&D flows are the most intense between any two international partners.

Four Times “Yes”

Until now, however, the US and the EU have defined their new Trade and Technology Council with four “Nos”: It will not intrude on regulatory autonomy. It is not a TTIP-lite. It is not an anti-China cabal. It is not a vehicle to address bilateral trade or privacy disputes. As a result, the TTC’s message has become muddled at a time when clarity in strategic purpose is needed. The two parties need to offer a more proactive, affirmative agenda. Instead of saying four times “no,” they need to say four times “yes,” achieving concrete advances together so they a) remain global standard-setters and rule-makers, instead of becoming rule-takers; b) are inclusive innovators; c) are more vigilant and resilient to disruptive threats; and d) affirm their values-based partnership, which has become even more important in the wake of Putin’s madness.

One galloping new reality is that the United States has become Europe’s major energy partner, as Europe weans itself off its energy dependence on Russia, and as US and European companies lead the global transition to competitive clean technologies. The US is now Europe’s largest supplier of liquefied natural gas (LNG), and the Biden administration has worked actively with other energy producers to help Europe manage its move away from Russian energy dependence. US companies in Europe have also become a driving force for Europe’s green revolution, accounting for more than half of the long-term renewable energy purchase agreements signed in Europe since 2007.  European companies, in turn, are the largest foreign investors in the US energy economy.

Even as the US and Europe work to mitigate the energy disruptions generated by Putin’s war, they can future-proof their energy future by forging a Transatlantic Clean Technology Alliance. A TACTA could accelerate the scale-up and commercialization of promising clean technologies; advance public-private partnerships in pre-competitive research and development; and prioritize clean tech innovations that reduce, rather than exacerbate, their already-dangerous dependencies on critical raw materials from China and other unreliable suppliers. Such efforts could be quicker, more sustainable, and more cost-effective if the United States and Europe work together. They must act now.   

Daniel S. Hamilton is Senior non-resident Fellow at the Brookings Institution and Senior Fellow at the Foreign Policy Institute of Johns Hopkins University’s School of Advanced International Studies. He is President of the Transatlantic Leadership Network.

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