How Will COVID-19 Affect the Transatlantic Relationship?
Members of the Transatlantic Strategy Group in Harvard Kennedy School's Project on Europe and the Transatlantic Relationship and the German Council on Foreign Relations (DGAP) tell us how they see the COVID-19 pandemic affecting the U.S.-Europe relationship. Their answers highlight implications for a range of issues — trade, health, security, governance, Brexit, climate change and China — and what actions can be taken to enhance transatlantic cooperation in this moment of crisis.
Josef Braml, Head of the Americas Program at the German Council on Foreign Relations:
The global economic crisis triggered by the coronavirus pandemic is exacerbating the problems in the global energy and fossil fuel markets. The U.S. economy, supposedly energy-independent due to the "Shale Gas Revolution," and in particular its oil and gas industry, is threatened not only by the slump in demand, but also by an oversupply in the wake of the oil price war of leading producers. The economic threat, especially to the American oil and gas industry, also endangers President Trump's re-election and reinforces the White House incumbent's nationalist zero-sum thinking.
But President Trump's short-sighted geo-economic crackdown – in the form of military pressure and/or secondary sanctions – on the main oil producers and competitors – be it Saudi Arabia, Russia, or Iran – is done not only at the expense of the economic interests of allied countries in Europe, but will also harm the United States and help its global rival China.
A longer-term and more far sighted solution to the energy crisis– in terms of security, economic and environmental policy – would be to reduce dependence on fossil fuels rather than maintain a unilateral and narrow focus on traditional energy sources. Transatlantic cooperation in the research and financing of energy-saving technologies and energy sources of the future could remedy the failure of so-called free energy market responses that we are witnessing today. Anti-cyclical "protection taxes" on fossil fuels, in sync with the market price for oil, would help finance investments in renewable energy and could protect them from sudden price shocks, possibly initiated by OPEC.
New economic growth impulses, improved energy security and climate protection policies coordinated by the U.S. and Europe would also serve valuable domestic, electoral purposes on both sides of the Atlantic. They could give Western countries, which have been badly affected by the coronavirus pandemic, a much-needed, optimistic and sustainable outlook for the future.
Nicholas Burns, Goodman Family Professor of the Practice of Diplomacy and International Relations and Faculty Chair of the Project on Europe and the Transatlantic Relationship at Harvard Kennedy School; Former Under Secretary of State for Political Affairs (2005-2008); Former U.S. Ambassador to NATO (2001-2005):
Transatlantic relations will be dominated by the COVID-19 pandemic and global economic crises for months and years to come. They are the greatest challenges Americans, Canadians and Europeans have confronted since the Second World War. We will be far stronger by joining forces with these allies rather than by going it alone.
On the pandemic front, our most effective strategy will be to work together on the search for a vaccine, on sharing of data and on making sure all of us are better prepared for the second wave and the next global virus beyond it. With that in mind, a humbled U.S. should seek to learn from Germany’s much higher level of testing and more successful public health measures.
On the economic front, the European Union and the U.S. are the two largest global economies. Just as during the Great Recession, we should work closely together at the head of government level within the G-20 and G-7 bodies. Our leaders have failed to do so effectively since the start of the crisis. It is time to do so now.
Finally, these cataclysmic events should be a wake-up call for the real dangers of the America First strategy of President Trump. His constant criticism and open disrespect of our closest friends in Germany, Canada, France and elsewhere has left us isolated and estranged from the very countries who could help us most at this critical moment.
As U.S. Ambassador to NATO on 9/11, I will never forget how the allies stood by us at a very dark hour. Our place now, as we confront an even greater danger, should be by their side.
Cathryn Clüver Ashbrook, Executive Director of the Future of Diplomacy Project and the Project on Europe and the Transatlantic Relationship at Harvard Kennedy School:
Cataclysmic as things may seem at the moment, the crisis offers opportunity. World War II’s horror ultimately yielded to a reimagining of the transatlantic community and relationship. Our time of coronavirus should do the same. Neither China nor Russia will abate in their efforts to weaken Western democracies. Yet this can be a time of powerful Western re-invention, with greater strategic adoption of ‘best practices’ in economies and labor markets, healthcare, intelligence, cyber, defense and more. Leadership will determine what will actually be achieved.
With a U.S. President of vision in power and a sobered Europe stepping up, the alliance could begin to see a radical expansion of its definition of security to include pandemic mitigation, climate change effects and mass migration. Or envisage a new Bretton Woods moment for the reeling global economy, to set the stage for recovery and head off the economic and public health collapse of the global South. New forms of intelligence cooperation to push back against disinformation and manipulation in the “fog of COVID.” A transatlantic effort on data protection and privacy to reassure citizens using electronic disease tracking via smartphone. On trade, abandoning export tariffs on medical equipment can be an intermediary step toward a new, more inclusive EU-U.S. trade deal. All these measures require the restoration of the most critical ingredient to resilience: public trust.
For now, we live in a different reality. Europeans will have to do the leg work in spite of concurrent challenges the EU faces. But the April EU Council meeting showed that long-held fronts are softening on grants, fiscal issues, the EU budget, crisis response and public health coordination. The impossible could yet be possible.
Until at least November, Europeans will need to look beyond the White House for partners to set the tone for this renewal, but they can look within the United States – to Governors, Mayors and congressional representatives - for allies, while the alliance awaits rebirth.
Anthony Gardner, Senior Advisor at the Brunswick Group; Former U.S. Ambassador to the European Union (2014-2017):
There will be many ways in which the crisis will impact transatlantic relations, but for me three stand out.
First, there should be a renewed focus on U.S.-EU cooperation on the pandemic response. In the New Transatlantic Agenda signed at a U.S.-EU summit in December, 1995, the United States and the European Union established an U.S.-EU task force to develop and implement an effective global early warning system and response network for new and re-emerging communicable diseases. Alas, little was achieved. However, the U.S. and EU did work closely and effectively to combat the outbreak of Ebola in West Africa in 2014. In the current crisis, we have unfortunately seen no transatlantic cooperation when we should be leading a global response and preparation for future outbreaks.
Second, a potential bailout of Italy will be a major European crisis that will require a U.S.-European led global response. One important reason is the size of Italy’s debt -- €2 trillion. For economic and political reasons, Italy is too big to fail. Italy entered the crisis with an economy still 5% below where it was at the onset of the 2008 financial crisis. Coronavirus will hit Italy particularly hard, in part due to its high proportion of elderly citizens, its reliance on tourism and its backbone of small and medium-sized businesses. Under some scenarios, Italy's debt could rise to 158% of GDP this year and then to 167% in 2022. Interest rates on Italian debt might have to rise, making the debt burden unsustainable. This scenario would exacerbate Italian euro-skepticism and desire of influential populists to quit the euro.
Third, coronavirus will affect transatlantic trade relations. While coronavirus may complicate efforts to restart an ambitious transatlantic free trade deal because of populist forces that do not want to expose national economies to more competition in sensitive sectors (esp. agriculture), it may lead to renewed focus on more modest, pragmatic and immediately achievable goals – including the elimination of tariffs on industrial goods trade. The U.S. reached an agreement with the EU in TTIP to eliminate 97% of all tariff lines (agriculture representing most of the 3%) and discussions on industrial goods tariff elimination have continued under the Trump administration (but got bogged down because of larger trade frictions).
Christian Mölling, Director of Research of the German Council on Foreign Relations:
What we are currently observing could be the beginning of a chain reaction that eventually yields another European defense crisis. As the coronavirus pandemic triggers an economic crisis larger than any in recent memory, other areas will be subsequently affected, from defense to education.
The consequences in Europe are shaped by an increasingly inward-looking political mindset.Although most European states underline the importance of managing the crisis together and the EU just launched the biggest economic support program in its history, many states struggle to follow this cooperative advice in practice.
In strategic terms, the pandemic risks furthering U.S. disengagement from its global leadership role, undermining strategic stability and limiting the recovery of European defense capabilities initiated in 2014. Adding to this reduced strategic stability are the unknown effects the coronavirus pandemic will have on current and potential crises, ranging from Russia to North Korea. Each conflict will be affected differently, but radical and concurrent challenges across several realms, from finances to energy, and the need to prepare for contingencies while enforcing extraordinary measures to contain the pandemic, will stress decision makers on all sides.
Europeans can limit the political, strategic and economic consequences of the pandemic if they inject joint solutions for future defense organization into ongoing decision making processes now. If they miss this window of opportunity and insist on national solutions, the pandemic threatens to reduce Europe to strategic irrelevance. A look back at Europe’s response to the 2008 fiscal crisis gives us an idea of what the future could hold: European governments believed then that it was an expression of national sovereignty to make cuts on their own, rather than in coordination with Europeans partners. The result was disastrous, and Europeans lost about thirty percent of their defense capabilities.
Kristi Raik, Director of the Estonian Foreign Policy Institute:
COVID-19 has raised tensions between major powers. The actions of China and Russia during the pandemic reflect the strategic goals of the two authoritarian powers to weaken Western cohesion, strengthen their international influence and promote their worldview. China has succeeded, seemingly with little effort, to curb critical debate in Europe about Chinese wrongdoings while exporting its model of suppression of political freedoms for the sake of economic benefits. The EU denies having softened its recent report on disinformation as a result of pressure from Beijing, but facts speak for themselves: a draft report exposing Chinese propaganda efforts leaked to the media, which was followed by high-level warnings from China and a censored version of the report being published a few days later. This is just one illustration of China using its economic clout in Europe as a tool of political interference and threatening to undermine our democratic systems.
Russia has tried, but so far not succeeded, to use the pandemic to get rid of Western economic sanctions imposed in response to its aggression against Ukraine. Moscow responded to the call by UN Secretary General António Guterres for a global ceasefire (to allow for management of the pandemic in conflict zones) with a cynical proposal to couple the ceasefire with cancellation of economic sanctions. However, Putin has known for more than five years that the way to get rid of the sanctions is to start respecting the ceasefire in eastern Ukraine and other conditions laid down in the Minsk agreements.
COVID-19 could also accelerate the global trend of relative weakening of the West. It adds new pressures, external and internal, on Western democracies. Europe and the U.S. need to stand together to defend our democratic systems and our security in the face of growing authoritarian influence. Transatlantic cooperation is needed to tackle the risks of foreign-made 5G networks, new surveillance technologies, economic dependencies and disinformation, while not forgetting about the continued need for investments in military defense and deterrence capabilities.
David Sanger, Adjunct Lecturer in Public Policy and Senior Fellow at Harvard Kennedy School; National Security Correspondent at The New York Times:
The race for a vaccine may well be the next test of American-European cooperation, but also of much more. Every nation will, naturally, want to inoculate their own populations first. Every nation will want to assure it has its own manufacturing capability -- and, if possible, ownership of its own vaccine. And looming over the natural, if traditionally fairly friendly, competition between American and European researchers, will be a new player: China.
We have already seen a few examples of nationalistic tendencies breaking out amid the coronavirus crisis. Early on, President Trump reportedly made a play for a German firm that has a promising mRNA capability; its research facilities were located both in Germany and Massachusetts, and the administration wanted to move it all to the United States. That was enough to provoke a major reaction from Chancellor Angela Merkel, and now Europe has poured more money into the firm. The promising work on a vaccine clinical trial at Oxford University gives us hope of an early way to protect against COVID-19, but Oxford's interactions so far with American manufacturers have run afoul of traditional demands by major pharmaceutical companies for exclusive worldwide rights. That raises a natural question: With a virus that imperils the world, should ordinary commercial values prevail, or does our global security require a very different approach?
It doesn't help that all this is unfolding in the midst of a presidential election. In the United States we have an avowedly "America First" president whose team has drawn one major lesson from the past two months: In their view, everything candidate Donald Trump said about the need for domestic manufacturing of critical supplies, starting with drugs, has been validated. Expect more such proclamations in 2020. And in Europe, already suspicious of America's arguments, there are doubts that the U.S. continue to share its breakthroughs.
But the bigger question may be how China navigates the next year, and how the Western alliance deals with Beijing. The Chinese government has made the race to a vaccine a national mission, partly for the bragging rights, partly to extend its power, especially to nations that have their doubts about the future of American leadership. The reluctance in Europe to criticize China's handling of the early days of the outbreak suggests that China's strategy is working -- no one wants to risk angering President Xi, especially if he claims the first breakthrough.
Amanda Sloat, Robert Bosch Senior Fellow at the Brookings Institution and Non-Resident Fellow in the Project on Europe and the Transatlantic Relationship at Harvard Kennedy School; Former Deputy Assistant Secretary for Southern Europe and Eastern Mediterranean Affairs (2013-2016):
Although the UK formally left the EU on January 31, little has changed in the daily lives of most citizens and businesses. The British government no longer participates in EU decision-making institutions, but it remains bound by EU rules and enjoys its benefits during a transition period lasting until December 31, 2020. During this time, the two sides planned to determine their future relationship – including a free-trade agreement and other arrangements.
COVID-19 has upended these plans with negotiations postponed after the first round of talks in early-March. Governments are focused on emergency responses, senior officials on both sides (including Prime Minister Boris Johnson) have fallen ill, and logistical challenges continue to hinder sensitive talks. The transition period could be extended by mutual agreement for 1-2 years, but that decision must be made before July 1. Johnson has always opposed an extension, with his Brexit negotiator asserting in mid-April that the pandemic has not changed the government’s position. Johnson remains keen to conclude Britain’s departure, avoid further contributions to the EU’s budget, and liberate the country from EU laws.
The Prime Minister has three options, each of which incurs costs. In the unlikely event the sides conclude a trade deal by the end of the transition period, companies will face near-term disruptions due to new arrangements. If there is no deal, the return to WTO trading rules would create an economic shock on top of a possible coronavirus-induced recession. If the UK government requests an extension, additional payments to Brussels will be politically unpalatable but arguably the least bad choice.
In addition, the crisis has illustrated the post-Brexit coordination challenges ahead. The British health minister no longer attends EU meetings. The UK withdrew from the EU’s emergency bulk-buying mechanism for vaccines and medicines. And Brexit will preclude British participation in EU regulatory systems, including the European Medicines Agency. The trans-border nature of the virus underscores the need for new cooperative mechanisms.
Constanze Stelzenmüller, Senior Fellow in the Center on the U.S. and Europe at the Brookings Institution:
No aspect of the U.S.-European relationship will remain untouched by the coronavirus pandemic. But a facet that is not normally discussed in the context of transatlantic relations is the state of our domestic operating systems: the effectiveness and legitimacy of the nation-state and its constituent components.
Most of our constitutional orders (the U.S. and the UK being notable exceptions) were created after World War II, for peacetime. The first two months of the pandemic suggest we need to take a long hard look at all of them. How are states of emergency triggered — and what is the way back? What are the relative strengths and weaknesses of centralized versus federal systems? If this is the hour of the executive — including the coercive executive — how can the other branches of government (legislatures and courts) maintain their constitutional prerogatives and responsibilities? How can government be held to account beyond the ballot box, and by what standards? How can citizens protect themselves against extraordinary encroachments by the emergency actions of governments? And how can political pluralism and a healthy opposition be preserved in a climate of uncertainty and potentially catastrophic risk — which populists and extremists are waiting to exploit?
All these issues are crucial to maintaining our liberal democracies, founded on the principles of limited government, separation and balance of powers, representative democracy, and the protection of individual rights. That is what separates us from the illiberal authoritarians. And it is the fundamental reason why we are allies.
Torrey Taussig, Research Director in the Project on Europe and the Transatlantic Relationship at Harvard Kennedy School and Non-Resident Fellow at the Brookings Institution:
The coronavirus pandemic has become a key - perhaps determining - factor in U.S.-China competition for international influence. Nowhere is this more evident than in Europe. A war of words is raging between the Trump administration and Chinese officials over the origin of the virus, who is to blame and how to best contain the outbreak. The race for a vaccine is already a contest of national capabilities. Beijing is rushing to fill the void of American leadership by promoting itself as a partner of first resort. The future character of U.S.-China competition will depend in large part on Europe’s decisions, and China knows it.
China has shipped millions of masks and medical supplies to Europe to win over hearts and minds. Even Chinese telecommunications firm Huawei sent protective gear in what some see as a ploy of “mask diplomacy” to win 5G contracts. These efforts have been accompanied by a striking disinformation campaign executed by Chinese officials, social media trolls and state-sponsored media. According to U.S. and EU officials, China is using such agents to amplify conspiracy theories about the virus’s origins - falsely claiming that it started in Italy or was brought to China by the U.S. military. Chinese propaganda also takes aim at U.S. and European responses to the pandemic, painting them as ineffective and weak.
China’s information campaign takes a page out of the Kremlin’s playbook; it appears to be backfiring. The U.S. Department of State warned the CCP is pushing a concerted narrative that China is a strong global health leader while the U.S. is a weak ally. The EU issued a report on the dangers of Chinese and Russian coronavirus disinformation (although it was reportedly watered down after Beijing exerted pressure). French President Emmanuel Macron called for China’s “Europe-bashing” to end.
The longer-term question for China’s influence in Europe will be whether Europe can strengthen its defenses and cohesion in light of Beijing’s growing political influence and efforts to divide Europe. Transatlantic cooperation on a shared China strategy could also help strengthen democratic standards as China exports a model of digital authoritarianism. But a joint approach toward China will first require a reset in the U.S.-Europe relationship. There is a window of opportunity before the EU-China Summit in September 2020 to clarify a transatlantic approach. We should not let this window pass us by.