The Transatlantic Trade and Investment Partnership (TTIP) is a real test of whether America and Europe can work together to maintain the economic vibrancy and political will that has long driven the world’s economy and formed the nucleus upon which global consensus has been built.
After the devastating conflict of World War II, both sides of the Atlantic joined hands to rebuild a war-ravaged world. This bold action required courage and vision.
They jointly led the formation of global institutions to address global challenges. To secure the peace, Western Europe and North America formed NATO. Soon thereafter the nucleus of what would become the European Union formed a bond that for decades drove economic progress.
The result of these efforts has been a half-century that has been far more prosperous and peaceful than the previous half-century. Yet, this progress has uncovered fault lines that remain unaddressed. Global institutions are in desperate need of reform to remain relevant. The euro experiment affirms the need to match monetary union with fiscal union. The rise of the emerging economies threatens to shift the economic center of gravity to the Pacific.
The Atlantic duo must now decide to undertake a similar decades-shaping effort in the 21st century. Successfully completing the TTIP would re-energize the alliance and enhance the ability of the West to address all other challenges.
No one doubts that completing the TTIP will be difficult. The United States and the European Union are the world’s two largest economies and represent nearly half the world’s total output. Many special interests on both sides of the pond and beyond will be seeking to advance their positions, complicating an already tricky balancing act.
However, having engaged recently with business, NGO, and political leaders in Brussels, London, Madrid, and Washington, I have found broad agreement that there could be significant benefits from TTIP. The partnership has the potential to reignite economies on both sides of the Atlantic, measurably adding to the prosperity of the regions’ citizens and an ability to set the de facto global standards of commerce.
To capture these potential benefits, negotiators on both sides must work as hard as possible at the negotiating table in order to make doing business under the agreement as easy as possible for companies in the United States and European Union. Doing so will improve the efficiency and competitiveness of both economies.
American and European workers are among the world’s most productive and innovative. In a future where innovation will become ever more important to economic health, the markets that are most receptive to modernization will prevail. Issues such as attracting the world’s talent, encouraging risk-taking, and streamlining regulatory obstacles will be increasingly important to economic success. The latter should be a strong focus of TTIP and will be its greatest challenge.
My son spent the last year teaching English and basketball in Spain and traveled the continent on weekends. He summed up the European view thusly: "If it can be difficult, why make it easy?" There are times when an extra layer of attention or difficulty can be advantageous, perhaps even charming: cuisine, culture, or Versailles. However, when it comes to growing an economy, "difficult" is not a recipe for success.
Finding a solution that makes easy the new norm must be a primary focus for TTIP negotiators. The World Economic Forum‘s most recent Global Competitiveness Report shows a wide variability within the two regions on the measure of the burden of government regulation. Among the 144 countries rated, Finland has the sixth-highest mark and Italy ranks No. 142. Britain (No. 72) and the United States (No. 76) rank in the middle. France, which has emerged as a key critic of TTIP efforts, falls in at No. 126. To accomplish its aim and deserve the support necessary for passage, the end product must be a result closer to Finland than Italy.
Difficult negotiations will be required with those industries, countries, and states that have a special privilege or onerous restriction they wish to preserve. Reaching an agreement that enhances the competitiveness and global relevance of the West requires that those negotiations succeed.
Negotiators would be wise to keep in mind the words of Winston Churchill, "Success is not final; failure is not fatal. It is the courage to continue that counts."
No one should take the vaunted status of the United States and Europe in world affairs for granted. It can fade unless action is taken. It will require courage. While perhaps harder to come by in a time of peace than during conflict, it is upon the display of such courage that their joint future depends.