Trends and Prospects of Transatlantic Economic Relations

Transatlantic relations have been under stress. In the run-up to the Iraq war and since, it seemed at times that the former partners of Cold War days had turned into hostile camps, as their leaders embarked on unilateral action (the US) or inaction (Germany), threw invectives at each other or each other’s supporters (Messrs. Rumsfeld and Chirac), and reinforced popular negative stereotypes. Of course, some of the strains preceded the 9/11/01 tragedy and the Iraq war in the wake of a rising tide of cross-Atlantic complaints, many of them having to do with the perception of US unilateralism on the European side, and of European indecisiveness on the US side.

Since 9/11/01, much of the stress in transatlantic relations has centered on disagreements in the foreign and security policy arenas. Previously, however, a number of high-visibility conflicts had appeared in the economic and related areas (trade, finance and environment). This paper looks at the trends and prospects of transatlantic economic relations to determine whether there is a tendency towards increased stress also in this important aspect of the relationship, or whether transatlantic economic ties can be relied upon or reinforced to ensure that the historic partnership does not fall apart. The paper concludes that the economic partnership can indeed serve as a glue to bind the frayed partnership, but that it will take continued attention by governments on both sides of the Atlantic to areas of common interest and to achieve greater recognition among the general public of the great value of continued economic cooperation. The paper commends and recommends governance structures that can help ensure that common transatlantic interests are effectively pursued in an increasingly multi-polar and complex international economic environment.