EU-US trade deal: Creating a new world order
The world order has changed in the course of the financial crisis and with it, enhanced the consolidation of a new arena of world politics in which superpowers somewhat urgently seem to hunt for new allies to rescue their well-being, says Gabriele Suder.
Gabriele Suder is Jean Monnet chair and professor of International & European Business at Skema Business School.
"Globalisation is out, regionalism is in! One could argue that we might need to thank the lasting economic crisis for at least a few sweeping developments on the global level: Amongst them, the awareness that the world is in no way as ‘flat’ as some contemporary thinkers made many believe.
Because resolution of crises may primarily originate from bi-and multilateral, often region-to-region forms of cooperation and free trade conditions that governments (and corporations) hope will stimulate economies.
For the past three years and more, we have seen an exceptionally dynamic trend towards more and more free trade negotiations and agreements. They install a political and economic multi-polarity already predicted ten years ago, right after 9/11.
Yet it is the financial crisis that has caused the main changes to the world arena that used to be perceived as an international order run by a few somewhat fading superpowers.
The world order has changed in the course of this crisis however and with it, enhanced the consolidation of a new arena of world politics in which superpowers somewhat urgently seem to hunt for new allies to rescue their well-being.
Driven by political and economic motivations, they are weaving a net of trade agreements. This net is increasingly perceived as a competitive race for political and economic first-mover advantages (intensified political cooperation; market access for trade and investment) that come with signing the best, most comprehensive or earliest agreement.
This is part of today’s driving force of geopolitical and geo-economic change. Hadn’t we already seen this ever so clearly in the race towards trade agreements with South Korea?
Now, after many long years of hesitation, both the EU and the USA have come to realise that their system of regionalising the world will work even better (they hope) if they themselves, mutually and reciprocally, open trade and unite forces further.
Spill-overs from trade agreements for sure stimulate business knowledge, cross-border trade and growth: an anti-dote for crisis. But close attention needs to be given to this multi-polarity. It goes hand-in-hand with a complexity that may cause rather tricky legal and economic overlaps.
Business may lose clarity and claim over-regulation through multiple deregulation (as ambiguous as this may appear) and, discouraged, won’t follow suit in the long term. The newer players of global governance could then start a power game of inclusion and exclusion of powers in future formal and informal integration.
In this context, Europe, against all odds, remains the most advanced form of regional integration in the world, with a vast historical and contemporary experience of good and bad practices.
This is good news in the crucial struggle for appropriate solutions for its on-going crisis (mainly caused by the divergence of opinions of its members in regard to the depth of integration).
The EU construct continues to serve as a model to many less stable regions in the world, for peace-keeping, outreach and neighbourhood policies – and thus, for the management of complexity.
With the European belief in economic and political integration, and the US focus on reclaiming global economic status, this free trade agreement has huge potential. It might, in itself, open yet another chapter of polarity in the future."