US Chamber President and CEO Thomas Donohue called on the transatlantic community to “make history” by taking bold policy steps to further integrate the US and European economies. At an event hosted by the Atlantic Council on April 18—on the eve of the World Bank-International Monetary Fund spring meetings—Donohue had a clear message for leaders gathering in Washington: “stop all the hand-wringing.”
Paraphrasing Mark Twain, Donohue claimed that while the challenges to the West are grave, the “news of our decline has been greatly exaggerated.” Atlantic Council President and CEO Fred Kempe moderated the discussion.
He proposed a three-pronged approach of cohesion, recovery, and growth for the transatlantic community to regain its economic footing. Donohue also pressed for progress on a comprehensive US-EU economic and trade pact, which could create millions of jobs and add billions of dollars to the US and European economies. Finally, he emphasized that the rapid expansion of the emerging markets’ economies represents a huge opportunity for American and European firms to export their goods and services, as well as the chance to take advantage of the huge increase in available talent and human capital.
First, on cohesion, since the US and Europe are “stronger together than we are alone,” Brussels and Washington should work together to expand the idea of the transatlantic economic space to include important states including Russia, Turkey, and Canada. At the same time, the US and Europe should jointly advocate for the protection of intellectual property right and international trade laws in multilateral forums including the World Trade Organization, especially with regards to China. Warning that this is not a call to “gang up” on China to curb its growth, Donohue explained that China can only fully achieve its economic potential when it plays by the same rules as the rest of the world.
Recovery is dependent on the US and Europe making politically courageous decisions to reform entitlements and tackle long-term debt and deficit issues, while simultaneously making smart investments in education and infrastructure today. Quoting a European official, Donohue pointed out that, “Everyone knows what they need to do, they just don’t know how to get re-elected after doing it.” This is exactly the kind of short-sighted political self-interest that caused these problems in the first place.
And finally on growth, European debates on how much austerity how soon are missing an important factor—how can the private sector play a role in promoting sustainable job growth? Additionally, a US-EU trade pact that outlines specific deliverables and “unleashes enterprise on both sides of the Atlantic” would be a bold and exciting achievement.
Today there are more reasons than ever for the United States and Europe to collaborate as unemployment remains unacceptably high, growth rates are negligible or even negative, and we face a great period of volatility in many different regions of the world. Donohue concluded that the transatlantic alliance must better organize itself to address the new realities of a competitive, changed future.
“Our decision must be to grow and to lead—and based on who we are, what we stand for, and all that we have achieved in the past, I am confident that this is the map we will follow,” said Donohue.
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This speaker series is part of the Mapping the Economic and Financial Future Speakers’ Forum hosted in partnership with Deutsche Bank.