Yes, the United States is pivoting to Asia, one of the reasons for the tête-à-tête last week between Barack Obama and Xi Jinping. But behind the scenes, President Obama has actually been reorienting U.S. diplomacy toward Europe.
At the outset of his second term, Obama unfurled a bold initiative — the Trans-Atlantic Trade and Investment Partnership, or T.T.I.P., to facilitate free trade between the United States and the European Union. The president is headed to Berlin next week to meet with Chancellor Angela Merkel on Tuesday and Wednesday to discuss the euro crisis, the global economy, and defense and other issues. No doubt he will also sing the praises of U.S.-European cooperation.
The United States is rediscovering the Atlantic even as it deepens its engagement in Asia. The challenge for Europe is to seize the opportunity when European trade ministers meet on Friday to decide whether to start negotiations on the trade deal, which the European Commission has said could add 0.5 percent to the E.U. economy and 0.4 percent to the U.S. economy by 2027.
The main impetus behind America's tilt back to Europe is economic — something of a paradox given that Europe's economy is in the doldrums. To be sure, trade with Asia offers more upside potential than commerce across the Atlantic; this is precisely why the United States is simultaneously pursuing a trade deal there, the Trans-Pacific Partnership. But a Pacific pact will be a much harder sell domestically and could well run afoul of rising geopolitical tensions with China. Meanwhile, the chances of a global trade deal are virtually nil.
With the United States in a hurry to eke out more growth, the trans-Atlantic market is the place to look. The proposed Atlantic pact promises to boost growth on both sides of the pond. According to one official assessment it could create 400,000 jobs and boost the E.U. economy by €119 billion a year and the American economy by €95 billion.
The United States would benefit not only from an uptick in growth and employment. Washington is also eager to do what it can to help the European Union climb out of its economic and political crisis; growth and jobs are the best antidote.
Europe's main goal is to reap the benefits of tying the Union — the world's largest trading power — to the American economy, which is gradually coming back to life. In light of the fiscal constraints facing E.U. member states, an economic pact with the United States is one of the few options available for stimulating growth and employment.
Moreover, tighter trans-Atlantic regulations and standards would serve as a lever for the completion of the E.U.'s single market. In addition, the Atlantic trade pact offers Europe a hedge against political and economic isolation at a time when its traditional American ally will be expanding its commercial footprint in Asia.
A trans-Atlantic trade deal could have implications well beyond the United States and the European Union. The two economies represent roughly half of the world's output, meaning that the pact has the potential to serve as a global standard — a model that other regions might seek to emulate.
Finally, a trans-Atlantic free trade area would bring geopolitical as well as economic gains. The two sides of the Atlantic need to refurbish liberal democracy and free-market capitalism at a time when the spread of Western values seems to be stalling. The Arab Awakening has done more to fuel political Islam than liberal democracy. State capitalism is alive and well in Russia and China. Under these circumstances, the United States and Europe need to show renewed solidarity in defense of a liberal international order.
Turning the world's premier security alliance into the world's premier economic pact won't be easy. In both the United States and the European Union, the tyranny of narrow interests has the potential to trump the collective good — a considerable risk in light of the populist sentiments that economic duress has stoked on both sides of the Atlantic.
Nonetheless, leaders on both sides must make the Trans-Atlantic Trade and Investment Partnership a reality, keeping a firm eye on the final goal. Europe, in particular, will have to be cohesive from the start.
It may well prove to be a Pacific century, buoyed by Asia's economic dynamism. But at least for now, the United States and Europe remain bound at the hip — an enduring, perhaps reassuring, reality amid a world in flux.
This article appears in full on CFR.org by permission of its original publisher. It was originally available here.