EU flexes muscle on the big issues
Europe finally finds its voice as the US waffles
At global summits, national leaders like Donald Trump, Vladimir Putin, Xi Jinping, or Angela Merkel typically get the bulk of the attention. During last week’s Group of 20 meeting in Hamburg, a more faceless entity — the European Union — took the lead, especially on trade and climate change.
The EU, the only non-state participant among the world’s most powerful economies, more often lets its members do the talking, preferring to simply coordinate positions and represent the interests of countries in the bloc that don’t have a seat at the table. But with few other distractions and the US looking inward, the EU is flexing its muscle on the biggest issues of the day.
Trade and climate “were the two geopolitical dividing lines in the G20,” said Andre Sapir, of the Bruegel think-tank in Brussels. “The Trump factor is giving Europe an opportunity to send a new message.”
Though Trump has repeatedly called on Merkel to trim Germany’s US$65 billion trade surplus with the US, it’s the EU that negotiates trade deals for its 28 members — as the German Chancellor has made clear. With the bloc enjoying a resurgence of unity and its brightest economic outlook since the start of the debt crisis in 2010, its leadership in Brussels is moving ahead with deals while the US threatens greater protectionism.
On July 6, the EU struck a preliminary free-trade agree- ment with Japan, six months after Trump pulled out of the Trans-Pacific Partnership that Barack Obama had negotiated with 11 countries. In September a similar accord with Canada will go into effect.
The EU is in a “combat mood,” European Commission President Jean-Claude Juncker said before the summit, promising retaliation against punitive steel tariffs Trump has threatened.
While all of the EU’s mem- bers have signed the Paris Accord designed to limit emissions of carbon-dioxide and slow the global rise of temperatures, the EU itself is also a signatory. The bloc has said it will devote as much as
180 billion — in addition to what member countries spend — to reducing greenhouse gas emissions in the six years ending in 2020.
The EU runs the world’s biggest, and first, emissionstrading market, where companies can buy credits allowing them to pollute (and profit by selling them if they clean up). It’s the world’s top aid donor, making it instrumental in efforts by rich countries to help the poor build sustainable economies. The bloc joined 18 countries in declaring that the Paris deal is “irreversible” while the US was mum on the issue.
The EU “has been very aggressive in setting targets” on climate, said Kristine Berzina, a senior fellow at the German Marshall Fund of the United States, a transatlantic thinktank. “It’s a sense of moral responsibility and an opportunity to lead globally.”
With 512 million residents and a 14.6 trillion economy, the EU’s position has been bolstered by its growing economic clout. For the first time since 2012, when Greece nearly dropped out amid the financial crisis, all of the EU’s members are seeing economic expansion. The European Commission expects output to grow at 1.9 per cent this year, and 10 million jobs have been created since 2013.
The economic recovery frees up “time, energy and money for international leadership,” said Fredrik Erixon, director of the European Centre for International Political Economy, a think-tank in Brussels.
The EU appears to have forged greater unity out of Brexit. And “Trump has so far helped to galvanise the EU around trade,” said Jan Techau, head of the Richard Holbrooke Forum in Berlin. “Even to a lot of sceptics, the protectionism and isolationism of the US don’t sound attractive.”