The Foreign Service Journal, April 2017

32 APRIL 2017 | THE FOREIGN SERVICE JOURNAL based producer of luxury Mercedes automobiles, has warned that, come 2020, more than half its skilled workers will be more than 50 years old—and it is struggling to find enough young apprentices to replace them. Meanwhile, Volkswagen has revealed that a third of its vehicles are already being produced by factories in Asia. The TTIP-ing Point? Where, then, do Europe’s difficulties leave the trans-Atlantic relationship? The short answer is largely unaffected for the time being, but vulnerable to substantial change in the longer term. More than half a century of trade and investment across the Atlantic has created an extraordinarily robust joint economy. American-owned assets in Europe are worth $14 trillion, says the U.S. Bureau of Economic Analysis, accounting for 60 percent of all U.S. foreign investment around the world. For their part, European investors account for two-thirds of all foreign-owned holdings in the United States. The fairly recent U.S. “pivot” to Asia still has a long way to go before it makes a dent in the trans-Atlantic relationship. Trade in goods across the Atlantic is, at about half a trillion dollars yearly, rather less buoyant. That’s a reflec- tion of the competing local attractions of the European and American domestic mar- kets, but also of protectionist tendencies in both. It is also why, in recent years, Brus- sels and Washington invested a good deal of political capital in the unsuccessful effort to conclude a Trans-Atlantic Trade and Investment Partnership. The idea has been to overcome regulatory differences, and also to fashion a common U.S.-E.U. front against the inroads that Asian competitors—China today, India tomorrow—are making in global markets. “The TTIP is not a free trade agree- ment; it’s a hell of a lot more than that!” says Christian Lef- fler, the former Swedish diplomat in charge of economic and global affairs at the European External Action Service, the E.U.’s increasingly powerful foreign policy arm. “Its importance lies in a shared approach to regulations and standards.” Elements of the agreement may survive the protectionist sentiments of Pres. Trump and some members of his Cabi- net, but much of it looks set to share the fate of the cancelled Trans-Pacific Partnership. The closing months of 2016 saw TTIP increasingly bogged down, both on key questions like disputes settlement arrangements and also over abstruse and unimportant details. “There seemed irreconcilable differences, for instance, between American experts who insisted that the purity of, say, oysters and clams depended on the water they’re grown in,” recalls former U.S. Ambassador Tony Gardner, “and Europeans whose testing methods concern their freshness.” Still, the immediate outlook for trans-Atlantic trade should not be cause for concern. The bureaucratic hurdles erected by European or American officialdom are not insuperable, if there’s enough goodwill. It’s also unlikely that the flows of goods and services across the Atlantic will be quickly disrupted, even by ugly spats between political leaders. More worrying is the longer-term risk that the European Union and the United States may be embarking on divergent geopolitical paths. Their shared concerns during the post-World War II years are fading. The certainties of the Cold War are a quarter- century out of date, and have anyway been eroded by disagreements over policy toward the Middle East, with Syria following Iraq and Iran, and by increasing differences of approach toward militant Islam and Russian assertive- ness. Although these disagree- ments arise within Europe as well as across the Atlantic, the overall trend seems to be away from the common threat assessments that have been such a strong feature of U.S.-E.U. relations. Differences over security are creating sharper frictions than competing economic inter- ests have ever done. Some began to question the value of the North Atlantic alliance after the 1989 fall of the Berlin Wall and the subsequent collapse of the Soviet Union. Since then, Russia’s military resurgence and more assertive foreign policy have given NATO a new lease on life, but that has been somewhat negated by the failure of its European members even to maintain their modest defense budgets. Their “freeloading” has long provoked irritation in the United States, and Pres. Trump’s apparent hostility to the alliance may even spur European governments into plowing funds into defense. In the ever-tougher conditions of the globalizing world economy, Europeans know that not even the continent’s largest countries can expect to make their voices heard and advance their own interests.