from Renewing America

How President Putin Has Given a Boost to U.S.-EU Trade Talks

March 25, 2014

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Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

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When President Obama first announced his trip to Europe two months ago, the main topic was supposed to be trade, particularly the difficult ongoing negotiations to form a new Transatlantic Trade and Investment Partnership (TTIP). But when he meets Wednesday in Brussels for the first U.S.-European Union summit in more than two years, most of the discussion will be about Ukraine and the Russian annexation of Crimea.

The change in plans underscores a critical point about trade negotiations--whatever the economic motivations, trade is an integral part of U.S. foreign policy. And the events in Ukraine have served to make the current set of trade negotiations much more important, and as a consequence, more likely to succeed.

Trade has long been driven in no small part by U.S. geopolitical aims. The General Agreement on Tariffs and Trade, launched in 1947, was intended to build a strong economic partnership to counter the growing communist bloc. The first U.S. bilateral free trade agreement was with Israel in 1986. The decision to launch a new round of global trade talks in Doha, Qatar in 2001 was meant to send a clear message that, despite the 9/11 attacks, the United States remained committed to expanding trade ties with the Arab Middle East. And U.S. support for admitting China and Russia to the World Trade Organization was as much about tying those countries to the existing international order as it was about freeing trade.

But with the break-up of the Soviet Union and the end of the Cold War, trade has become increasingly separated from U.S. diplomacy. For better or worse, trade deals are now assessed by Congress and the American public almost solely in terms of their economic impact on Americans, not on their foreign policy implications. That has made such agreements harder to negotiate, and harder still to move through the U.S. Congress.

President Bill Clinton’s ambitious plans for a Free Trade Area of the Americas linking North and South America never got off the ground; President George W. Bush was unable to make any progress in the Doha Round talks, and his signature bilateral deals with Korea, Colombia and Panama languished for several years and had to be renegotiated before winning congressional approval. President Obama today faces a Congress in which almost every member of his own party is opposed to giving him the negotiating authority he needs to conclude the TTIP and a companion deal in Asia, the Trans-Pacific Partnership (TPP).

The events in Ukraine could change that. With European fears of Russian revanchism growing, the United States needs to demonstrate unequivocally the strength of its commitment to Europe. The TTIP, which several weeks ago looked like a detailed, bureaucratic negotiation over tariffs and regulatory rules with the promise of modest economic pay-offs, has now become a test of the transatlantic partnership. And that is a test neither the United States nor the European Union can afford to fail.

Similarly, with the crisis in Europe, the TPP negotiations have become virtually all that is left of the Obama administration’s much-touted “pivot to Asia.” The president has been forced by the events in Ukraine to once again place Europe at the center of U.S. security concerns. But at the same time, the administration cannot afford to turn its gaze so far that it offers China a free hand in Asia. So the TPP, currently bogged down in talks over such issues as how much beef and rice Japan might import in the future, has suddenly become a measure of the strength of the U.S. commitment to Asia. As with the European talks, neither the United States nor its Asian allies can now afford a failure.

Those cheering for the success of both negotiations will be heartened by the suddenly improved odds for success. I personally would have preferred a debate over the economic merits of the deals, which should be able to stand up to the scrutiny of their many critics. But with international trade, the dividing line between economics and geopolitics has always been faint. Thanks to President Putin of Russia, the line has almost been washed away.

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