Even in "Asian Century", Transatlantic Relationship Remains World's Most Important

28 May 2013

Rome:

The Asian Century isn’t written in the stars and there’s a long way to go for the Atlantic to lose its position at the centre of the global economy, said Michael Cox, Professor of International Relations at the London School of Economics, at a meeting held last week at Rome’s Institute for International Affairs. Discussing the future of transatlantic relations in the Asia-centric world many believe is fast approaching, Prof. Cox warned against hasty predictions that Europe was doomed to retreat down the list of US priorities as Washington shifted its attention to Asia and the Pacific.  

The audience, consisting mainly of officials from Italy’s Ministry of Foreign Affairs, received an essentially two-part message. First, whatever its current difficulties, the transatlantic relationship was not only one of history’s great survivors; it was also exceptionally broad and deep. Second, it was nevertheless undeniable that Asia was more and more the main focus for the US public and policymakers, while Europe was losing ground.

He urged European policymakers not to roll over in the face of perceptions of a rising Asian juggernaut—and to be bold in reminding their US counterparts of the benefits of a close partnership with the EU.

The United States and Europe have never had an easy relationship, Prof. Cox reminded his audience. It’s complex but strong, as symbolized above all by NATO.  “Even at the height of the Cold War,” he said, “there was a crisis almost every year,” listing France’s withdrawal from NATO military command, the Vietnam War and Reagan’s deployment of Cruise and Pershing missiles to Europe. But, as Cox pointed out, although the alliance’s breakup has been constantly prophesied since the fall of the Berlin Wall, it has hung together even without the Soviet threat.

Economically the transatlantic relationship has never been closer. With about half of world economic output and a third of global trade, the United States and Europe make up far and away the world’s most important economies. Indeed, trade and investment ties between the two are so dense that, in Cox’s view, it’s “often difficult to say where the United States ends and the EU starts.” Figures bear him out: according to the European Commission, total US investment in the EU is three times that in Asia while intra-company transfers account for about a third of transatlantic trade.

For all that, American eyes are clearly refocusing towards Asia, now widely seen as more important to the United States’ future. According to Cox, a “huge intellectual and psychological turn” is taking place in the United States, one that’s profoundly “influencing views of how important Europe is.” Like the surveys that report a majority of Americans incorrectly believe China to have a bigger economy than the United States, this is a question of perception rather than reality: Asia needn’t actually be more important to US strategic and commercial interests than Europe for Washington to cold shoulder Brussels—it need only be perceived to be.

In fact, Cox poured cold water on the idea that the twenty-first century necessarily belongs to “Asia”, pointing to the continent’s slipperiness geographically and its political, cultural and economic diversity. “There’s no such thing as Asia,” he said: “There are countries in Asia, but no Asian collective.” For all the EU’s flaws, the stability and coherence of its institutions bear no comparison even to ASEAN (Association of South East Asian Nations), Asia’s best-organized regional body.

Prophecies about Asia’s forthcoming economic preponderance are often cloaked in a certainty they don’t deserve. Too much remains in play to take an “Asian Century” as fact, Cox believes. There’s a “great deal of exaggeration”, he said, emphasising the “very big futurological aspect” behind these forecasts about what the world would like in 2040 or 2050. The power such projections hold over policymakers and businessmen says more about the “huge impact Goldman Sachs [and other investment banks] have had on international relations” than it does about the future world order, which is profoundly unpredictable. His advice: “Don’t be fooled by projections”.

As a result of these powerful misperceptions, however, Europeans have “become convinced of their own decline.” They must shake themselves out of this and “start thinking for themselves”. Some Asian countries may continue to develop strongly. But whether the measure used is Gross Domestic Product, Foreign Direct Investment, Research and Development, biggest corporations or best universities, Cox reminded his audience that the countries of the North Atlantic are still way out in front.

However Asian the unfolding century might turn out to be, Washington will likely remain at the centre of global politics. “Everyone is talking about a new world order,” says Cox, “but the one thing that will not change is the centrality of the United States.” Relative to any would-be rival, the United States has and will continue to have “huge” advantages—economic, military and strategic in terms of the system of overseas bases and alliances it can call on. Chief among these is NATO, whose survival reflects the values Americans and Europeans share despite their differences—democracy, the rule of law and market economics.

In 2013, there can be little doubt that the transatlantic relationship is, in Cox’s words, “something steady and fundamental at the heart of the world order.” Whether or not it will remain so, however, is up to those charged with looking after it. For their part, European leaders must resolve the euro crisis, which, more than any other issue, has undermined the EU’s credibility in the United States. But they also need to reinvest in the North Atlantic. As this week’s Economist reminds them, finding the political courage to conclude an ambitious Transatlantic Trade and Investment Partnership (TTIP) with the United States is the best way they can do this. Given Europe’s current economic straits, such an agreement would certainly help it return to growth—whomever the century belongs to.