EU-US Trade Relations: EU and US make peace on trade before Russia summit - by Andrew Rettman

The EU and US have ended their oldest trade war in a show of transatlantic unity one day before US president Joe Biden meets his Russian counterpart.

The 17-year old trade dispute over subsidies for rival aircraft makers Boeing and Airbus had seen billions of euros of punitive tariffs imposed on other products, such as tobacco and spirits.

But these will now be lifted for a provisional period of five years, while a special trade council will monitor compliance on state aid for the air firms. The move still left in place t

Read more at: EU and US make peace on trade before Russia summit

Global Politics: Europe must break the shackles and show off its power - by Professor Zaki Laidi

EU: Only in unity can progress be achieved

Zaki Laidi professor of international relations at L’Institut d’Etudes Politiques de Paris (Sciences Po), who also was an adviser to former French prime minister Manuel Valls. recently wrote in an opinion piece, which is not only worth reading, but also implementing as part of the EU's  Parliament and Commissions long range strategy.

 "US President Donald Trump and European Commission President Jean-Claude Juncker may have averted a trade war last month, but the challenges confronting the EU are far from resolved. In today’s increasingly Hobbesian global environment, the EU can survive only by increasing its capacity to project power — no easy feat for an entity that was formed precisely as a repudiation of power politics.

With the 1957 Treaty of Rome, Europe shed what remained of its militaristic impulses and focused on building a sprawling and peaceful single market. From then on, Europe’s only means of projecting power would be its trade policy. Yet that policy has never been guided by strategic thinking, leaving the EU with only limited global influence, despite its tremendous success in world markets. The time has come for Europe to reestablish itself as a true global player, not by attempting to emulate a classic superpower, but rather by consolidating and deploying different types of power.

Europe already has considerable normative power — that is, the capacity to create global standards through the so-called Brussels effect, which can be seen in its efforts to rein in technology companies.

The recently enacted General Data Protection Regulation, for example, set guidelines for the collection and processing of personal information of individuals within the EU. Now, digital platforms, including powerful American companies, are scrambling to adjust. The “big four” US tech firms — Alphabet (Google’s parent company), Apple, Facebook, and Amazon — are also facing pressure from the EU stemming from their dominant market position.

Yet the EU has often failed to recognize its normative power, let alone take full advantage of it. This both reflects and reinforces weakness in three areas: Self-esteem, risk awareness, and the capacity for action.

Self-esteem includes the belief that the EU is a worthy undertaking, the confidence to express that publicly, and recognition of the EU’s true potential for power projection. Such a dispensation is severely lacking in many parts of the EU, beginning with Germany, which, despite having regained confidence in its own future, jealously guards its resources.

As Trump berates Germany for accumulating surpluses without contributing sufficiently to transatlantic defense, the country should be all the more motivated to use its capabilities to strengthen Europe. But, while the discourse in Germany on resource-sharing has begun to shift, concrete changes will take time.

Europe’s unwillingness to nurture and deploy its clout contrasts sharply with America’s assertive use of its market power to advance its interests and preferences. For example, since Trump announced his decision to withdraw from the 2015 Joint Comprehensive Plan of Action — better known as the Iran nuclear deal — and reinstate sanctions on Iran, many European companies, fearing loss of access to the US market, have decided to withdraw from the country.

To convince European companies to remain in Iran, the European Commission updated the 1996 Blocking Statute, which forbids actors under EU jurisdiction from complying with extraterritorial sanctions, allows companies to recover damages from such sanctions, and nullifies the effect in the EU of any foreign court’s judgment based on them. But the update has proved ineffective, as exemplified by the situation faced by SWIFT, the secure messaging system used for global cross-border financial transactions.

As Iran learned in 2012, losing access to the SWIFT network essentially means losing access to the international financial system. Yet that is exactly what the US is pushing for: If SWIFT fails to cut off Iran by early November, it will face countermeasures. SWIFT’s compliance with that demand, however, would all but destroy any remaining incentive for Iran to remain in the JCPOA. This would amount to a major political failure for Europe, because SWIFT is under EU jurisdiction.

Europe has also shown a self-defeating lack of confidence in the euro. Although the euro is the world’s second most important currency, it lags behind the dollar on almost all metrics, increasing the EU’s vulnerability to US trade sanctions.

The second weakness the EU needs to address is risk awareness. For example, China needs access to Europe’s industrial technology to realize its economic ambitions, and it needs access to European ports to complete its Belt and Road Initiative. Yet Europe is allowing itself to be effectively plundered, not least by China’s takeover of ports and airport facilities. The EU-China relationship must be made more reciprocal, with the EU — and, in particular, the Southern and Eastern European countries that have welcomed Chinese investment with open arms — recognizing the security risks posed by Beijing’s activities.

For that to happen, however, Europe will need a more united approach to Russia, which, despite posing less of a threat to the EU than China does, is keen to highlight — and exacerbate — internal division. How can one blame Greece for selling ports to the Chinese while Germany pursues the Nord Stream 2 pipeline project, which will increase Europe’s energy dependency on Russia?

All of this is complicated by escalating tensions between Europe and the US, which, among other things, is spoiling cooperation to contain China. This is where the capacity for action comes in. Rather than waiting for someone else to push back against the Trump administration’s demolition of multilateral structures, Europe must take the initiative, imagining a system without the US.

This means not only ensuring that the international trade regime can survive without the US, but also developing a military capability that can increase the EU’s geopolitical credibility and shift the global balance of power. Here, French President Emmanuel Macron’s initiative to create a European military force beyond NATO is essential. Its success will hinge on a united, cooperative approach that potentially even includes the UK. The challenge is obvious. But the payoff — for the EU and the world — would be well worth the effort ". 

Note EU-Digest: Hopefully European political leaders at all levels of the European political spectrum will take note of this report by Professor Zaki Laidi. Europe must show far more courage to quickly undo itself from the US directed policy shackles and choose it's own independent course. If not, it will be devoured country by country in today’s increasingly Hobbesian global environment.

EU-Digest

EU Unity: Merkel, Macron pledge to lead EU forward post-Brexit

French President Emmanuel Macron won backing from Angela Merkel for plans to reform the European Union after Brexit, founded on what the German chancellor called “intense” cooperation between Paris and Berlin.

But many leaders remained wary of ambitious new projects, doubting the appetite of voters for giving up national control and fearing the continued strength of anti-EU sentiment that is taking Britain out of the bloc and saw the far-right win dozens of seats in the German parliament in Sunday’s election. 

“Last night’s discussions showed there’s a common realization of a need for a leap forward in Europe,” Macron told reporters on Friday after an EU summit dinner that stretched beyond midnight in the Estonian capital Tallinn.

“Today we’re all convinced Europe must move ahead faster and stronger, for more sovereignty, more unity and more democracy.” 

Macron voiced satisfaction with summit chair Donald Tusk’s commitment to report back to EU leaders when they meet again in three weeks with proposals for concrete steps to be taken. 

Note EU-Digest: A very positive series of proposals came out of thisTallinn Summit . Hopefully the statements by Merkel and Macron will not just fall on deaf ears.. 

Europe must redirect its foreign policies towards a more independent European focused position and not continue to follow blindly in the footsteps of the US., which has totally different objectives than those of Europe. 

This will require a lot of soul searching within the EU, including, looking more closely at the EU's participation in NATO'S military adventures, and even its long-term relationship with Russia. 

What is good for America might not always fit the real needs of Europe.

Read more: Merkel, Macron pledge to lead EU forward post-Brexit

The Transatlantic Pact: Merkel's blunt speech sparks fears of rupture in transatlantic pact

The Transatlantic Alliance - two worlds apart

German Chancellor Angela Merkel hinted that a major geostrategic shift may be under way when she told a Munich rally on Sunday that Europe must fight “for our destiny” in the wake of Brexit and an apparent US withdrawal from the world stage.

Speaking to some 2,500 supporters at an election rally in Munich, Merkel said European Union nations must remain united as they navigate Britain’s departure from the bloc and as disparities with the United States – on both policy and priorities – come into sharp relief.

"The era in which we could fully count on others is somewhat over, as I have noted in the past few days," Merkel said, in an apparent reference to her interactions with US and British leaders at a two-day G7 summit in Sicily that ended on Saturday.

"And so all I can say is that we, Europeans, must take our destiny into our own hands," she said.

Merkel's blunt speech sparks fears of rupture in transatlantic pact