Carl Bildt and Javier Solana write: Europe must capitalize on its significant significant strengths. It is a hub of high-level thought and innovation; it is home to some of the world’s most competitive regions and industries; and, perhaps most impressive, it has built a community and market encompassing a half-billion people.
But the world is changing: the Asia-Pacific region is increasingly influencing global developments, economic and otherwise. The Trans-Pacific Partnership – by which the United States and 11 other countries would create a mega-regional free-trade zone – would most likely accelerate this shift (all the more so if China eventually joins. Though the TPP faces no shortage of hurdles to clear before an agreement is finalized, its potential to augment Asia’s economic power cannot be underestimated.
Europe must work to secure its position in the new world order – beginning by enhancing its own trade and investment ties with the US. Business leaders on both sides of the Atlantic are convinced that a successful Transatlantic Trade and Investment Partnership (TTIP) agreement would bring substantial economic benefits – a perception that many studies reinforce. Yet trivial issues continue to dominate the debate.
The TTIP’s goal is to unleash the power of the transatlantic economy, which remains by far the world’s largest and wealthiest market. If the TTIP was opened to other economies – such as Turkey, Mexico, and Canada – the benefits would be even greater.
There are the potentially catastrophic consequences of failure. For starters, a breakdown of TTIP talks would give considerable ammunition to those in the United Kingdom who advocate withdrawal from the EU.
Moreover, the perception that the EU’s internal squabbles had led it to squander a strategic opportunity would probably drive the US to accelerate its disengagement from the continent. And Russian President Vladimir Putin would invariably regard the EU’s failure as a major opportunity to exert more influence over parts of Europe.
All of this contributes to a starkly fundamental strategic risk: If the TTIP stalls or collapses, while the TPP moves forward and succeeds, the global balance will tip strongly in Asia’s favor – and Europe will have few options, if any, for regaining its economic and geopolitical influence.
When the TTIP was first proposed, Europe seemed to recognize its value and wanted to sign a deal quickly. But then EU leaders essentially abandoned the project, seemingly confirming American fears.
EU leaders must revive their commitment to conclude the talks successfully in 2015. This is not to say that resolving the remaining issues will be simple. When the TTIP negotiations resume next month, EU leaders must push for genuine progress, with the goal of completing a deal by the end of the year.
