More Trade: Good for More than Economies

In his 2013 State of the Union address, President Obama proposed that the United States and the European Union begin negotiating a Transatlantic Trade and Investment Partnership. This proposal was quickly applauded by many European political leaders, who are eagerly looking for ways to extract their continent from its current economic stagnation. Unlike previous trade agreements involving the U.S., from NAFTA twenty years ago to the U.S.-Colombia FTA two years ago, which were usually supported by business and opposed by labor, a pact with Europe could have broad support from U.S. labor as well as business interests. More American exports mean more American jobs as well as higher profits for American companies.


But while most of the arguments for and against trade agreements focus on the economic benefits and costs of free trade, less attention is paid to the political aspects of these agreements. This is unfortunate, because the political benefits of expanded trade, especially trade between democratic countries that share many interests, are just as important as the economic impact of exports and imports.


At a time when the Obama administration is making a well-publicized and heavily debated “pivot” to the Asia-Pacific region, a transatlantic trade pact is a good way for the U.S. to signal to Europe that it has not forgotten its longtime allies. This could have important implications not only for the future of NATO, but also for Western policy toward the Middle East in the wake of the “Arab Spring.” If the U.S. and its European allies feel more united economically and politically, it will be easier for them to agree on policies toward security issues like the Iranian nuclear program, or the crisis in Syria.


Furthermore, if the member states of the EU can put aside their disputes over their economic troubles, even for a short time, and come together to ratify a transatlantic trade agreement, they may find that there is more that binds the nations of Europe together, economically and politically, than breaks them apart. Within the U.S., business groups and labor unions may come to the kind of broad consensus on trade that has been very hard to reach for decades, making it easier, in turn, for business and labor to work together to press American politicians for smart economic policies. On each side of the Atlantic, it is easy to see how more trade could mean more political unity.


To be sure, some parts of transatlantic trade negotiations will be difficult. For one thing, the EU will likely resist attempts by the U.S. to liberalize the European agricultural sector. But even if farm subsidies remain unchanged on both sides of the Atlantic, a trade agreement between two global economic powers with many shared political interests, in addition to being positive for the world economy, will be positive for political relations between the U.S. and Europe.


Submitted by Michael D. Purzycki


The opinions expressed are those of the author, and do not represent the opinions of Rutgers University or the Division of Global Affairs.

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