In reaction to a previous post about the boring, technical nature of transatlantic economic cooperation, Atlantic Review reader John in Michigan made the important point that "the political process requires an engaged citizenry to function well. Any topic or area that an ordinary citizen would rightly find dull, doesn't belong in politics".
Transatlantic economic cooperation is a process that produces winners and losers and thereby has political implications. As it deals with economic relations between the world's two largest economies by far, these implications will likely prove to be significant. The cooperation process, however, is technical to a degree where the political implications are likely to be registered late, and to lead to oblique reactions.
At the core, being 'dull but important' is a dilemma, which has to be solved by making transatlantic economic cooperation more interesting. This could for instance be done by clarifying the political implications of very technical issues like eliminating 'non-tariff barriers'. That, however, is a very difficult analysis to make, and will be contested.
Interest in transatlantic economic cooperation is hard to sell to the public. That is the conclusion of Philip Whyte at the Centre for European Reform:
If the potential economic gains from deepening the transatlantic economy are marked, why is the TEC’s [Transatlantic Economic Council - Nanne] agenda not better known? The (largely justified) perception that it is dull does not help. Let’s face it: the mutual recognition of GAAP and IFRS accountancy standards, or, for that matter, the transatlantic dimension of the EU’s chemicals directive, are not the sorts of subject that most normal people are inclined to discuss when they kick back and relax after work.
A lot of transatlantic economic cooperation is very detailed work that is hard to render in political terms. The overall direction towards greater liberalisation of trade might be worth talking about. But that political aspect has become murky, hidden behind the details, implicit. That is partially because it has become presumed to be only responsible position by much of the media.
Non-tariff barriers as dealt with by the TEC are a catch-all phrase for regulation that sometimes largely serves to harass imports, sometimes just hasn't been coordinated, but in other cases serves political goals other than rank protectionism. It has become hard to have a sensible debate on the balance of this as well as other trade topics because the only positions that are argued are either an implicit bias in favour of all forms of liberalisation, or the diametrical opposite, which is in favour of protectionism as a goal in itself -- the thereby 'unserious' left.
William Drozdiak, president of the American Council on Germany and the former chief European correspondent for The Washington Post, wrote an op-ed about transatlantic relations. (Hat tip: Don) Unfortunately, the Washington Post editors chose an headline "4 Myths About America-Bashing in Europe," although only two of the four myths could be put into the category America-Bashing. The headline choice indicates that they find the term "America-Bashing" more profitable than the term "transatlantic relations." So it is not just the European media, which focuses on the negative aspects on the other side of the Atlantic. Excerpts from Drozdiak's op-ed:
Opinion polls cite widespread dismay with the Iraq war, our dog-eat-dog social model and the arrogance of an imperial superpower that places itself above international law. But behind the surveys about "why they hate us" lies a reservoir of goodwill waiting to be tapped among foreigners who would prefer to see the United States succeed rather than fail. This love-hate melange has perpetuated four modern myths about transatlantic relations that deserve to be debunked. 1. The French hate us: There is scant evidence to suggest that exploiting anti-American attitudes wins elections. During the French campaign, Sarkozy was often derided by his Socialist opponents as "an American neoconservative carrying a French passport." (...) In Germany, where anti-American views have hardened in recent years, Merkel has not suffered because of her support of the United States. Indeed, she has steadily increased her popularity with high-profile visits to Washington. (...) 2. Europeans look down on the American way of life: Young Europeans are more eager than ever to work and study in the United States. A brain drain from France and Germany has sent some of their best and brightest to the United States. (...) When I spoke last year with about 50 Germans studying at MIT and Harvard, not one of them expressed a desire to return home. They all wanted to live and work in the United States, where, they said, opportunities are far more abundant. 3. "Old Europe" no longer matters because China and India are the future: With the collapse of the Soviet Union and the end of the Cold War, Europe supposedly lost its relevance. Not true. In fact, Europe and the United States still act as the twin turbines of the global economy, accounting for 60 percent of all trade and investment flows. Americans invested five times as much money in Germany last year as they did in China, and U.S. firms in total have poured four times as much money into tiny Belgium as they have into India. Europe provides three-quarters of all foreign investment in the United States, creating millions of American jobs. 4. Europe loves only Democrats: Most Europeans loathe George W. Bush, and his departure from the White House will be cheered in capitals around the world. But that doesn't mean that Europeans want a return to the kumbaya-ism and humility evinced by President Jimmy Carter and the early years of the Clinton administration, when the United States failed to lead in stopping genocide in the Balkans.
Europe has eclipsed the US in stock market value for the first time since the first world war in another sign of the slipping of the global dominance of American capital markets. Europe's 24 stockmarkets, including Russia and emerging Europe, saw their capitalisation rise to $15,720bn (€11,819bn) at the end of last week, according to Thomson Financial data. That exceeded the $15,640bn market value of the US. (...) The shift mirrors a trend in the debt world, where European activity has caught up, and in some cases overtaken the US.European shares have outperformed the US, with their market capitalisation rising 160 per cent since the start of 2003 in dollar terms, said Thomson Financial. That compared with a 70.5 per cent rise for the US stock market. Over that time the euro has risen 26 per cent against the dollar.
The Independent calls the shift "a historic occasion," but also describes the criticism of the comparison between the European continent and the United States:
For the record, the figures come from Thomson Datastream, not the traditional calculators of indices, such as FTSE or MSCI. These others strip out government holdings and other shares that are not generally available to investors, which lowers the value of European markets, which include many partly privatised companies and the like. The first reaction of many on Wall Street yesterday was to dismiss the figures as a distortion or an irrelevance. Russia shouldn't be included as part of Europe, some said. Others asked, what is the point of a comparison with a geographical area that covers two and a half times as many people as the US? And still more said that FTSE and MSCI figures better reflected the size of the equity market available to investors, where the US still wins by anything from 15 per cent to a third. Fair points all, but none diminish the significance of the underlying trend identified in the Thomson figures.
The Independent also points out:
Now that the news is out there, it has immediately been pitched into the argument over whether New York is in danger of losing its position as the financial capital of the world. For London, it is another piece of evidence to back the Stock Exchange's boasts that it is attracting foreign companies that would previously have looked to list in the US. And for some Wall Streeters, it adds new urgency to their calls for looser regulation and other measures to win back lost business.
Usually there are calls for looser regulation in Europe rather than in Wall Street... (Thanks to Zyme for pointing out this story.)