On Monday, January 22nd, the German Marshall Fund of the Unites States hosted a dinner discussion on the issues raised by Chancellor Merkel's call for action to deepen the transatlantic marketplace.  Gabor Steingart, Berlin bureau chief of the German weekly newspaper Der Speigel and author of the book "World War for Prosperity" (available in English soon) set out his views on the Chancellor's agenda and its context; Dr. Adam Posen of the Peterson Institute for International Economics provided a response. The event was moderated by GMF Transatlantic Fellow Richard Salt.

This discussion followed an earlier lunch event where Gabor Steingart discussed his recent book addressing the issue of China's rising role in the world economy, and the challenge this posed to both the U.S. and Europe. 

In his opening remarks, Mr. Steingart began by explaining Chancellor Merkel's biography and how she came to embrace what he called "American ideals".  These ideals of opportunity and ingenuity are, he asserted, a significant force behind her vision of a deeper and more closely integrated transatlantic relationship.  He argued that a belief in shared and common values underpin, in his view, the need for a transatlantic "Trade NATO" in order to protect against rising economic power in low-wage, emerging market countries - particularly China - encompassing what he described as an economic "toolbox" of trade policy weapons to protect Western values and help provide a level playing field. Steingart's argument is set out in an Opinion paper, available here

In response, Dr. Posen provided a comprehensive critique of Mr Steingart's analysis and proposed solutions, challenging, in particular, his portrait of globalization as a zero-sum game. Dr. Posen noted that trade and globalization were often the scapegoats for domestic economic underachievement, arguing that Germany's economy had not performed to its full potential for several decades (Dr Posen is the author of a forthcoming book Reform and Growth in a Rich Country: Germany, partially supported by a grant from the GMF). He agreed with the importance of strengthening the transatlantic economic relationship, but emphasized that this should be because of the mutual economic benefits it would provide - not based on the exclusion of any other economy. Integration of China into the world market, rather than their exclusion, is the best way for the West to influence outcomes and gain from the economic opportunity China offered.

A productive discussion on the topic followed, drawing together around 20 participants from government, the think-tank community, business, journalism and academia.  Most agreed that the idea of a transatlantic marketplace was a positive idea, noting that, the German double presidency (EU and G8) is an excellent opportunity for the advancement of these ideas and that further efforts should be made to achieve progress. The depth of the transatlantic relationship meant that even progress towards opening in specific sectors could have huge economic benefits for the EU and US - a point often overlooked. Several participants thought that high-level political impetus would be necessary to advance the agenda, though skepticism was also expressed as to whether the transatlantic partners had new ideas regarding how to succeed where previous efforts had largely failed.