作者：Mohamed A. El-Erian 2013年3月6Project Syndicate
After instant and seemingly coordinated fanfare in Europe
and the United States, the proposal for a European Union-US free-trade area has
been generating little media attention. There are three reasons for this, and
all three highlight broader constraints on good national economic policymaking
and productive cross-border coordination.
In his “State of the Union” address in February, US President
Barack Obama proposed a “comprehensive Transatlantic Trade and Investment
Partnership” with Europe based on trade that is “fair and free.” His
administration regards this as part of a comprehensive approach to generating “good-paying
American jobs.”
Obama’s
bold proposal received an immediate and enthusiastic reception in Europe.
Taking to the airwaves within hours, European Commission President José Manuel
Barroso and European Council President Herman Van Rompuy called the proposal
“ground-breaking.” Arguing that it could increase Europe’s annual economic
growth rate by half a percentage point, they declared that formal negotiations
would start quickly.
At
first, there was quite a bit of general interest, and understandably so. The
proposal involves the world’s two largest economic areas, with national,
regional, and global implications. Yet, despite the realization that an
agreement could fundamentally alter the nature of global trade and production
networks, it only took a few weeks for interest to drop off.
One
reason is rooted in initial conditions that limit direct gains from increased
trade while widening the scope for tension and conflict. Free-trade agreements
that promise the greatest benefits are those that link economies characterized
by high tariffs, low levels of trade, and little overlap in consumption and
production patterns. This is not the case for the EU and the US. Average tariff
levels are only 3%. The EU already accounts for almost 20% of US imports, and
the US for 11% of EU imports. And, given similar per capita income
levels and cultural orientations, overlaps in production and consumption are
considerable.
Having
said this, there would be immediate upside potential, owing to better resource
allocation, more harmonized investment regimes, stronger standards, and the
elimination of outdated non-tariff and regulatory barriers. Aerospace, auto
manufacturing, biotechnology, cosmetics, and pharmaceuticals are among the
sectors that stand to gain. There is also the potential for reforming
inefficient approaches to food and agriculture, particularly in Europe.
The
second reason for waning attention to the proposed partnership speaks to a broader
issue: A seemingly endless stream of short-term political dramas has made it
extremely difficult for both Europe and the US to focus for long on any secular
and structural initiative.
In
Europe, broad-based discussion was undermined by the outcome of the Italian
election – just the latest sign of how frustrated citizens in a growing number
of countries are rejecting conventional political parties and the
political status quo. With that, it becomes more difficult to
pursue longer-term policy objectives, which merely adds further uncertainty
about the precise path of European economic and financial integration.
In
the US, the disruption took the form of yet another fiscal mini-drama. With a
dysfunctional Congress again letting down the American people, the country is
now on the receiving end of a budgetary sequester – another self-manufactured
headwind to economic growth, job creation, and progress on reducing income and
wealth inequalities.
Put
the two together and you get a barrier to EU-US trade negotiations – one that
renders ambitious (though not entirely unrealistic) the two-year timeline that
has been set for completing the deal.
The
third reason concerns the poor state of global policy dialogue, notwithstanding
all the happy talk about global challenges and shared responsibilities. Last
month’s G-20 meeting ended up as yet another expensive summit lacking
sufficient content and follow through. Rather than catalyzing constructive
policy coordination, it has inadvertently encouraged complacency.
All
three reasons are highly regrettable. They underscore the West’s seeming
inability to break out of a short-term mindset in order to respond to the risks
and opportunities related to historic national and global re-alignments.
The
real promise of freer transatlantic trade consists in its potential to
transform global trade, production networks, and multilateral organizations to
the benefit of all. At the most general level, it would act to rationalize the
current system of four poorly functioning blocs – centered on China, Europe,
the US, and the rest – to three, and eventually (and perhaps quite quickly) to
two better-functioning blocs that would have little choice but to work well
together: one dominated by China, and the other by the EU/US.
Such
a global structure has the potential to encourage better medium-term alignments
to reduce trade barriers, set proper standards, and enhance mutually beneficial
cooperation. It would facilitate coordination on stronger global rules and
principles, including those pertaining to intellectual-property rights and
trade in services. And it would force multilateral organizations to reform if
they wish to retain even the limited relevance that they have now.
The
proposal for freer transatlantic trade is potentially transformational. It
comes at a time when the West is increasingly being dragged down by short-term
disruptions and continued policy inertia. Yet the implementation prospects are
far from promising. The proposal has the capacity to act as a catalyst for
adapting policy approaches to current realities; but it is subject to the
dulling forces of twentieth-century mindsets and institutions that are too slow
to adapt to twenty-first-century challenges and opportunities.
Mohamed A. El-Erian is CEO and co-Chief Investment Officer of the global investment company PIMCO, with approximately $2 trillion in assets under management. He previously worked at the International Monetary Fund and the Harvard Management Company, the entity that manages Harvard University's endowment. He was named one of Foreign Policy's Top 100 Global Thinkers in 2009, 2010, 2011, and 2012. His book When Markets Collide was the Financial Times/Goldman Sachs Book of the Year and was named a best book of 2008 by the Economist.
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