Is the transatlantic economy faring better now than it will post-Bush?
Despite the strains on the transatlantic relationship caused by events like the Iraq war - as evidenced in public opinion studies, like GMF's Transatlantic Trends - optimism is rising about improved relations with a new U.S. administration in 2009. But underlying the political aspect of the relationship has been a flourishing economic relationship that helps preserve both the political relationship and the need for the political relationship.
GMF Transatlantic Fellow Joe Quinlan, in a just-released opinion piece, says the strong economic ties of the United States and Europe of the last eight years has been the "glue" of the transatlantic partnership. And while many talk of a renewed political relationship next year on issues ranging from the Middle East to climate change, what about that valuable economic relationship? U.S. voters have grown skeptical of globalization. The dollar is low, and jobs are moving to developing countries. Will a new administration in 2009 also bring a new era of closed borders between the United States and Europe when it comes to trade and investment?
Looking to the campaign trail, it is no surprise, then, that the credentials of both presidential candidates, Barack Obama and John McCain, have come under scrutiny when it comes to trade and overseas investment. Obama has taken some anti-trade stances, going so far as suggesting amendments to the North American Free Trade Agreement (NAFTA). McCain, a proponent of freer trade, has consisently voted for agreements that promote openness and greater liberalization. However, as Quinlan describes in "The U.S. Presidential Election and the Prospects for Trade and Investment," the longer the U.S. economy muddles along in its feeble state, the greater the anti-trade pressure on any U.S. president, Democrat or Republican."
Such anti-trade rhetoric according to Quinlan could be problematic for Europe as any move toward protectionism by the United States could retard the transatlantic economy specifically, and may even affect the global economy more generally. "A more protectionist tone from a new administration in Washington would likely engender a similar response or course of action from Europe, leaving the world dangerously exposed to a rising tide of protectionism," Quinlan writes. While "change" is in vogue on both sides of the Atlantic, Europeans, according to Quinlan, should be "tempered since the next president of the United States will be elected by a populace weary of foreign commitments and increasingly suspicious of the benefits of globalization, including cross-border trade and investment flows."
Democrat or Republican, a new president in the first part of his administration will be less open on trade issues, reacting to the mood of a country still recovering from a financial mortgage crisis, rising oil prices, and a weakening dollar, Quinlan says. The transatlantic economy, the largest in the world, is strong. However, Quinlan wonders "whether the policies of the next U.S. administration will help or hinder the growth and prosperity of the transatlantic economy remains to be seen. If protectionist rhetoric in the United States translates into policy beginning in 2009, many in Europe will come to miss President Bush." It's an unusual prediction, but one that could prove surprisingly true.
The views expressed in GMF publications and commentary are the views of the author alone.