The G-20’s Number 20 Finally Finds Its VoiceBy and
The EU is taking the lead on trade and climate change
Trump “giving Europe an opportunity to send a new message”
At global summits, national leaders like Donald Trump, Vladimir Putin, Xi Jinping, or Angela Merkel typically get the bulk of the attention. During last week’s Group of 20 meeting in Hamburg, a more faceless entity -- the European Union -- took the lead, especially on trade and climate change.
The EU, the only non-state participant among the world’s most powerful economies, more often lets its members do the talking, preferring to simply coordinate positions and represent the interests of countries in the bloc that don’t have a seat at the table. But with few other distractions and the U.S. looking inward, the EU is flexing its muscle on the biggest issues of the day.
Trade and climate “were the two geopolitical dividing lines in the G-20,” said Andre Sapir, a senior scholar at the Bruegel think tank in Brussels. “The Trump factor is giving Europe an opportunity to send a new message.”
Though Trump has repeatedly called on Merkel to trim Germany’s $65 billion trade surplus with the U.S., it’s the EU that negotiates trade deals for its 28 members -- as the German chancellor has made clear. With the bloc enjoying a resurgence of unity and its brightest economic outlook since the start of the debt crisis in 2010, its leadership in Brussels is moving ahead with new deals while the U.S. threatens greater protectionism.
On July 6, the EU struck a preliminary free-trade agreement with Japan, six months after Trump pulled out of the Trans-Pacific Partnership that Barack Obama had negotiated with 11 countries. In September a similar accord with Canada will go into effect.
The EU is in a “combat mood,” European Commission President Jean-Claude Juncker said at a press conference in Hamburg before the summit, promising retaliation against punitive steel tariffs Trump has threatened. “We’ll react with countermeasures within a few days,” Juncker said. “We won’t need two months.”
While all of the EU’s members have signed the Paris Accord designed to limit emissions of carbon-dioxide and slow the global rise of temperatures, the EU itself is also a signatory. The bloc has said it will devote as much as 180 billion euros ($206 billion) -- in addition to what member countries spend -- to reducing greenhouse gas emissions in the six years ending in 2020.
The EU runs the world’s biggest, and first, emissions-trading market, where companies can buy credits allowing them to pollute (and profit by selling them if they clean up). And it’s the world’s No. 1 aid donor, making it instrumental in efforts by rich countries to help the poor build sustainable economies. After Hamburg, the bloc joined 18 countries in declaring that the Paris deal is “irreversible” while the U.S. was mum on the issue.
The EU “has been very aggressive in setting targets” on climate, said Kristine Berzina, a senior fellow at the German Marshall Fund of the United States, a transatlantic think tank. “It’s a sense of moral responsibility and an opportunity to lead globally.”
With 512 million residents and a 14.6 trillion-euro economy, the EU’s position has been bolstered by its growing economic clout. For the first time since 2012, when Greece nearly dropped out amid the deepest financial crisis since the Great Depression, all of the EU’s members are seeing economic expansion. The European Commission expects output to grow at 1.9 percent this year, and 10 million jobs have been created since 2013.
The economic recovery frees up “time, energy and money for international leadership,” said Fredrik Erixon, director of the European Centre for International Political Economy, a think tank in Brussels. Officials “won’t have to rush to Brussels for crisis summits on the economy.”
It’s on trade that the EU will have the strongest voice. The bloc, after all, was initially conceived as a customs union. And the free movement of goods and people remain its primary achievements -- a commitment that will be tested in the coming year as the group negotiates Britain’s departure from the union.
With its tough stance in early Brexit negotiations, the EU appears to have forged greater unity out of an event that could have triggered its unraveling -- a spirit of cooperation that has only been strengthened by events across the Atlantic.
“Trump has so far helped to galvanize the EU around trade,” said Jan Techau, head of the Richard C. Holbrooke Forum at the American Academy in Berlin. “Even to a lot of skeptics, the protectionism and isolationism of the U.S. don’t sound attractive.”
— With assistance by Nikos Chrysoloras, and Marine Strauss