The start of a new year hasn’t been in such a thick fog for a long time as it was in 2023: The corona numbers in China give rise to doubts that the pandemic has been overcome. Inflation’s stranglehold is tight, despite small statistical relief.
Breakthroughs in global climate protection are lacking and the defense of Ukraine and the European peace order against Russia’s aggression requires the staying power that many feared.
This war triggered a paradigm shift that, since Chancellor Olaf Scholz’s government declaration, has been summed up in one word: a turning point. The federal government is now talking about a turning point in foreign, defense, energy, financial and economic policy.
The word of the year 2022 permeates everyday life in Germany and yet stands in the shadow of an even more frequently used term: sovereignty. Right now everyone wants more sovereignty, more freedom of design, more independence.
But independence in the literal sense does not exist for anyone, not even for states. Real success is only possible if they work together – in climate protection, peacekeeping, prosperity through trade and much more.
Every trusting, reliable cooperation needs a common basis. Western democracies became very aware of this in 2022. Its foundations are freedom, human dignity, openness, a market economy and the rule of law.
These values and principles enable a common identity in a multipolar world, clear orientation in an ambivalent present, economic opportunities in global competition and partnership-based solutions for different individual interests.
This is the core of transatlantic sovereignty. It is reflected in the great unity of the Western-style democracies against Russia’s aggression against Ukraine.
Protectionism and subsidy races are not a solution
And it must also be the focus of current economic policy debates, such as the Biden administration’s Inflation Reduction Act (IRA) to promote climate-neutral technologies and infrastructure to the equivalent of around 350 billion euros over ten years.
The concerns of transatlantic companies about trade-distorting elements of the IRA must be taken seriously. The decision-makers in the USA and the EU will have to find partnership-based solutions, because protectionist impulses and subsidy competitions are not.
Exaggerated statements prophesying the beginning of de-industrialization in Europe in this context will get no one anywhere. Everyone must be aware of this, also in view of the 75th anniversary of the GATT General Agreement on Tariffs and Trade at the beginning of the year: GATT has made development and prosperity possible in many countries.
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The broad exchange in the Trade and Technology Council TTC of the EU and USA to deepen their economic relations is important, but ambitious political action even more so, especially at the turning point. Talks about a free trade agreement between the US and the EU would be an impressive signal of the will to unite and the ability to balance interests.
The attempt to forge the transatlantic free trade agreement TTIP was unsuccessful; the reasons are varied and have a stubborn effect. A breakthrough back then would have enabled a lot of growth in the years that followed, prevented some irritation and strengthened the importance of contractual loyalty.
Knowing about the many advantages of such an agreement on both sides of the Atlantic is a good starting point for first removing any trade restrictions for industrial goods. That would still be less than what the CETA trade agreement between the EU and Canada allows, which can only be a start.
US companies: Germany as a business location has been deteriorating for years
Transatlantic sovereignty grows from greater progress in intensive cooperation, from agreement on standards and norms in research, development and production, and from the speedy dismantling of trade barriers of all kinds.
But even then, growth and prosperity will not follow automatically. The results of a survey conducted by AmCham Germany in autumn 2022 among the largest US companies in Germany show that the location quality here is rated as good, but has been deteriorating for years.
In a global comparison, Germany not only has enormous energy prices, but is also struggling with an acute shortage of skilled workers, delayed digitization, investment backlogs in infrastructure projects, a regulatory colossus with high costs, large scope and slow pace.
The solutions to these and other problems require more than wordy strategies and speeches. Effective action is what counts, for one’s own country, the EU and the transatlantic partnership. This secures our sovereignty and future!
The author: Simone Menne is President of the American Chamber of Commerce in Germany.
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