Economic Atlantik-Brücke

When Angela Merkel visited the US two years ago she made a very sensible proposition, one President Bush welcomed but that got very little attention in the American press. Her idea was to incorporate the US and the European Union along with probably Canada and Mexico, into a single free trade zone. We really should treat this more seriously. As Richard Rosecrance points out in the current issue of The American Interest America owes it’s place in the world as much to our status as an economic powerhouse as a military one, and that’s about to change. The EU’s economy is now bigger than ours is, China’s is about to become so, and India’s may not be far behind. In thirty years we could find ourselves in fourth place with a corresponding reduction in influence. I not sure we’ll be able to maintain the enormous defense expenditures required to continue acting as the world’s policeman either. So who’s going to do that? China? It’s time we started rethinking what sort of world order might be emerging and Mrs. Merkel’s suggestion would be a good place to begin.

A combined market would encompass about 13% of the world’s population but somewhere around 60% of it’s production. It would represent an alliance of people with a great deal in common with shared values and much to agree on. As the EU has amply demonstrated, the trade ties would have huge implications for a more peaceful world. On a continent that saw almost continuous warfare for at least two millennia, Germany is now no more likely to go to war with France than Virginia is with Maryland. Access to such a market would be a very large incentive to put a break on any bellicose ideas others might have. The same mechanisms that work to maintain orderly trade can also help in addressing all sorts of intractable issues from clean air to potential pandemics.

I can imagine that Japan might like to be in on the deal, and would have to open up long protected markets to get there. Mexico would have to adopt reforms that might finally bring prosperity on our southern border, and solve an illegal immigration problem that has frustrated every American administration in my memory. That’s exactly what has happened in Eastern Europe as former Warsaw Pact members have clamored for admission to the EU. For a short time Polish workers were flocking to Ireland. Now they are going home. Poland and Ireland both benefited.

A pact with Europe wouldn’t be subject to the same Xenophobia as the often proposed Free Trade Zone of the Americas. Ross Perot’s giant sucking sound wouldn’t have the same ring. Americans love to complain about the French but most of us would jump at the chance to spend a summer in Provence. Congressional trade demogogs would have to produce an entirely new line of rhetoric. It is we, not the Europeans, who might have to make concessions on environmental and labor issues. American unionists and clean air advocates ought to be all for it, though I’m not holding my breath.

In fact I’m not so naïve as to think any such grand offing is in the cards any time soon. Protectionists have the upper hand at the moment. Globalization has become a dirty word. But all of that is bad for the economy and in the long run that is bad for politicians. We could be in for some rough years. Our foreign oil bill alone is staggering. Between that and the declining dollar we may be about to see another round of stagflation, a word so long out of use anybody who doesn’t remember the Carter years probably doesn’t know what it means. Carter was a one term president. It took another sagging economy to bring a Democrat back into office. Politicians would do well to remember that.