- The Washington Times - Sunday, April 5, 2009

OPINION/ANALYSIS:

As the new American president makes his first trip to Europe, the focus is naturally on substantive results rather than process. Yet structural issues should not be ignored, because without structural reform there likely will be little or no implementation of any agreements - especially with respect to issues regarding (1) the economic crisis (especially financial rule changes and steps against protectionism), (2) the interrelated issues of climate change and energy security, including those relating to Europe’s dependence on Russian gas, and (3) the civil side of the issues of drugs and corruption in Afghanistan.

With respect to the economic crisis, the two sides of the Atlantic laid the groundwork for good discussion at the G-20 by means of debate largely carried out in the media between the relative merits of more stimulus versus more regulatory reform. The media is not a bad forum for such debate, but the follow-through is much more difficult, where the “devil is in the details.” There appears to have been little follow-through after the G-20 in November, for example, and the same result may be repeated. That is because there is at present no functioning economic equivalent to NATO.

Indeed, NATO takes all of the spotlight and attention as the primary vehicle for trans-Atlantic cooperation, even though it should be taking a back seat during this economic crisis since there is nothing it can add to its resolution. But there is no alternative.

One possibility is the Transatlantic Economic Council started by German Chancellor Angela Merkel to reduce trans-Atlantic barriers to trade and investment. Solving the banking crisis and fending off protectionism would seem to be tailor-made for the TEC, yet that particular platform lies dormant.

There is, of course, the Financial Stability Forum, just now renamed the Financial Stability Board by the G-20. But this represents all of the big countries, not just the U.S. and EU, who should work out their differences in a separate forum.

Given the uniquely close trading and investment relationship between the U.S. and EU, there is also the need to coordinate more closely on issues not aired at the G-20, such as regulatory protectionism and bank credit issues. The EU commissioner for competition was in Washington just days ago making the case against the creep of protectionism resulting from unjustifiable state aid or regulation that reduces competition. When asked whether there was useful current cooperation on these matters between the U.S. and the EU, her answer was a simple “no.” The TEC could be the solution, and there is no reason it could not eventually include other countries such as Japan, which two years ago expressed interest in being included.

With respect to climate change and energy security, there are plenty of venues for working through the possible outlines of an international agreement at Copenhagen. But how will any agreement be implemented? There are many problems where the devil of the details drives the ultimate outcome, but there is no current platform for hashing out the boring minutiae of designing a trans-Atlantic carbon trading system, or defining indirect land use measurements for use worldwide.

These may be boring “tails” to the larger problem of getting to a post-Kyoto agreement, but they are nevertheless a perfect example of where the tail does in fact wag the dog. The Obama administration is continuing the so-called Major Economies Process for discussing climate-change issues in a very useful forum smaller than the U.N. process, but it is no substitute for better U.S.-EU bilateral understanding.

The related issues of energy security also demand a trans-Atlantic platform. The development of reserves in the Caspian region are important not just for the security of the former states of the old Soviet Union, but also for protection against Russian blackmail based on its domination of the EU gas market, and for Europe’s ability to meet climate targets without reliance on coal.

Two examples of needed cooperation involve, first, the shared interest in developing shale gas, and, second, making sure there are common rules across the Atlantic for investment in the energy sector. In Europe, for example, there are still barriers to cross-border trade because of lingering protection for member-state utility champions. As a result, there is little U.S. investment in the EU energy sector generally, and in Russia and state gas extractor Gazprom specifically.

Even with respect to Afghanistan there is a need for much improved cooperation between the U.S. and the EU, especially with regard to police training and drug-related corruption. These are tasks that NATO cannot address by itself. Because of Turkey’s veto in NATO, treaty authorities cannot officially communicate with EU authorities. On the U.S. side, there is a tradition that the U.S. cannot communicate with the EU on issues that involve the military except through NATO.

This means the U.S. cannot communicate with the EU on any military-related issues. For example, NATO cannot share classified material with EU civilian officials responsible for police, drug and corruption matters, causing routine civilian casualties as a result. This is not resolvable through the TEC process, to be sure, but it is also a critical issue that NATO itself has not been able to solve.

c C. Boyden Gray served as President George W. Bush’s ambassador to the European Union from 2006 to 2008.

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