‘Less unpleasant but not fundamentally different’: Transatlantic divides after Biden win

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After Donald Trump’s “America First” agenda exposed longstanding strains in US-Europe relations, Joe Biden’s victory has prompted a Franco-German row over Emmanuel Macron’s vision of “strategic autonomy” – while transatlantic tensions simmer over tech taxes and extraterritorial US law.

The US president excoriated European countries’ failure to pay for its own defence in stark terms: “We cannot continue to pay for the military protection of Europe while the NATO states are not paying their fair share and living off the fat of the land,” he said. “We have been very generous to Europe and it is now time for us to look out for ourselves.”

This was not Donald Trump but John F. Kennedy, speaking privately at a National Security Council meeting in January 1963. American chagrin about low European defence spending goes back to the Cold War. But the US restrained its vexation while the USSR posed an existential threat and its Iron Curtain hung over the old continent.

In 2011, then US Defence Secretary Robert Gates warned that ties to Europe risked fading along with memories of the Cold War, as his boss, former US president Barack Obama, pivoted to Asia. “If current trends in the decline of European defence capabilities are not halted and reversed, future US political leaders – those for whom the Cold War was not the formative experience that it was for me – may not consider the return on America’s investment in NATO worth the cost,” Gates said.

Obama pilloried European “free riders” in a 2016 interview with The Atlantic. He singled out former French president Nicolas Sarkozy and former British prime minister David Cameron for relying on the US in the 2011 Libya intervention. “I had more faith in the Europeans, given Libya’s proximity, being invested in the follow-up,” Obama said.

In this context, Trump’s insults, tariffs and troop withdrawal from Germany can be seen as a lurid culmination of friction between the US and Europe.

“Trump marked an increase, rather than real change, in US-EU tensions – although at no point before did the US raise the idea of conditionality between US treaty obligations and European defence spending,” said Martin Quencez, deputy Paris bureau director of the German Marshall Fund, a think-tank dedicated to transatlantic co-operation.

Following Biden’s win, EU Commission President Ursula von der Leyen told a meeting of European ambassadors that “some shifts in priorities and perceptions run much deeper than one politician or administration” and will not “disappear because of one election”.

With Biden in the White House, “it will undoubtedly be less unpleasant, but not fundamentally different”, a French government source told Agence France-Presse under the condition of anonymity.

Franco-German defence spat

Thus the US election revived the European defence question. On the eve of the vote, German Defence Minister Annegret Kramp-Karrenbauer wrote an editorial for Politico titled “Europe still needs America”. AKK, as she is known, argued that “illusions of European strategic autonomy must come to an end: Europeans will not be able to replace America’s crucial role as a security provider” – even if Europe should be prepared to use “more muscle, where needed” in surrounding regions.

“Strategic autonomy” is the centrepiece of French President Emmanuel Macron’s European vision – economic, technological and military independence. He said he disagreed “profoundly” with AKK’s comments in a wide-ranging interview with French geopolitics journal Le Grand Continent on November 16.

France’s centre-right leader described the transition of power in Washington as an “opportunity” to “build our independence”. Europe has a “different worldview” and “different geography” from the US, therefore it is “not tenable that our international policy should be dependent on it or trailing behind it”, Macron said.

“Macron wants what he calls European strategic autonomy, but it’s very clear that the Germans don’t think about this in anything like the same way,” said Helen Thompson, professor of political economy at Cambridge University. “It’s very difficult to see how you get to a European strategic decision-making capability, let alone an actual operational capability to act upon any of it.”

The French president told The Economist in 2019 that US disengagement from Europe has rendered NATO “brain dead”.

“I think the Americans are pretty nervous about Macron’s position when European strategic autonomy gets turned into something that becomes anti-NATO,” Thompson said.

As things stand, “strategic autonomy” also looks limited by low defence spending. The UK, Greece, Poland, Romania, Bulgaria and the three Baltic states are the only European NATO members to meet the organisation’s 2 percent of GDP defence spending target. France’s figure was 1.84 percent in 2019.

Germany’s was 1.36 percent, with an addition of less than 0.2 percent of GDP from 2015 – when its military was so under-resourced that it used broomsticks in place of guns during a NATO training exercise. It aims to reach 1.5 percent by 2024.

“Is it enough? No. Is it fast enough? No,” said Thomas Kleine-Brockhoff, vice-president and Berlin bureau director of the German Marshall Fund.

Trump’s browbeating made the 2 percent target anathema to much of Germany’s political class – notably the Social Democratic Party, the junior party in Angela Merkel’s ruling coalition. Given these domestic constraints, the country’s defence spending increases from a low base are already “significant”, Kleine-Brockhoff said.

Macron’s row with AKK is a “tragic misunderstanding”, he continued. “AKK should be his closest ally; she is one of few German politicians you could see standing in an election while backing the 2 percent target.”

Franco-American ‘tit for tat’

But the concept of “strategic autonomy” Macron discussed in his Le Grand Continentinterview encompasses much more than defence; he also focused on avoiding reliance on American or Chinese technology and protecting European companies from the US justice system’s weaponisation of the dollar’s hegemony.

“If you look at it in this broad sense, there is much more support across Europe for this idea of strategic autonomy,” noted Pierre Vimont, French ambassador to the US from 2007 to 2010, now a senior fellow at Carnegie Europe.

France is imposing its sovereignty on big tech firms by implementing a digital services tax after years of complaints that they pay meagre tax on their European profits – with authorities demanding millions of euros last week from the likes of Amazon and Facebook. The US vowed in July to respond to such a tax with 25 percent tariffs on $1.3 billion (€1.1 billion) of French luxury goods.

Several other European countries including the UK are expected to implement similar tech taxes over the following year, despite US threats.

Democrats as well as Republicans insist that European nations must continue with OECD (Organisation for Economic Co-operation and Development) negotiations on a multilateral tax deal – despite the US pulling out in June after a long impasse. The levies on big tech’s French revenues constitute an “escalation against American employers”, Ron Wyden, the highest-ranking Democrat on the Senate Finance Committee, told the Financial Times last week.

For Macron, US escalations against French companies are the problem. France’s largest bank BNP Paribas had to pay a record $9 billion (€6.6 billion) fine in 2014 for contravening US sanctions against Cuba, Sudan and Iran. The “extraterritoriality of the dollar” constitutes a “deprivation of our sovereignty”, the French president told Le Grand Continent.

“There’s definitely been a tit for tat,” Thompson said. “The more that French banks have been fined, the keener the French have become on digital taxes on Amazon. And I think that dynamic isn’t going away under Biden.”

‘Convergence over China’?

However, an intensifying bipartisan consensus in Washington regards China – not Europe – as its antagonist on technology and trade.

On the other side of the Atlantic, Macron underlined in his Le Grand Continent interview that what he was saying about the need for European independence from the US was even “truer” when it came to China, as he decried Beijing’s “game” of “playing down values and principles”.

The EU envisages Biden working for “close cooperation on China and the challenges it poses in terms of unfair trade practices, security and other issues where we both have concerns”, EU High Representative for Foreign Affairs Josep Borrell wrote in a blog post in early November.

“We’ve already seen a convergence between the US and EU over China in the past twelve to eighteen months,” Quencez said. “Covid-19 has already accelerated this convergence, and working on a joint China strategy could be a kind of glue in the transatlantic partnership for years to come.”

“Europe is challenged not by US tech companies but by Chinese companies under the Communist Party’s authoritarian control,” Kleine-Brockhoff added. “Therefore we should try to build powerful tech platforms within a Western, not European, framework.”

France 24

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