Shadow Government

Transatlantic Trade Deal: Courage Required to Make Commerce Easier and Spark Economic Growth

The Transatlantic Trade and Investment Partnership (TTIP) is a real test of whether America and Europe can work together to maintain the economic vibrancy and political will that has long driven the world's economy and formed the nucleus upon which global consensus has been built.

After the devastating conflict of World War II, both sides of the Atlantic joined hands to rebuild a war-ravaged world. This bold action required courage and vision.

They jointly led the formation of global institutions to address global challenges. To secure the peace, Western Europe and North America formed NATO. Soon thereafter the nucleus of what would become the European Union formed a bond that for decades drove economic progress.

The result of these efforts has been a half-century that has been far more prosperous and peaceful than the previous half-century. Yet, this progress has uncovered fault lines that remain unaddressed. Global institutions are in desperate need of reform to remain relevant. The euro experiment affirms the need to match monetary union with fiscal union. The rise of the emerging economies threatens to shift the economic center of gravity to the Pacific.

The Atlantic duo must now decide to undertake a similar decades-shaping effort in the 21st century. Successfully completing the TTIP would re-energize the alliance and enhance the ability of the West to address all other challenges.

No one doubts that completing the TTIP will be difficult. The United States and the European Union are the world's two largest economies and represent nearly half the world's total output. Many special interests on both sides of the pond and beyond will be seeking to advance their positions, complicating an already tricky balancing act.

However, having engaged recently with business, NGO, and political leaders in Brussels, London, Madrid, and Washington, I have found broad agreement that there could be significant benefits from TTIP. The partnership has the potential to reignite economies on both sides of the Atlantic, measurably adding to the prosperity of the regions' citizens and an ability to set the de facto global standards of commerce.

To capture these potential benefits, negotiators on both sides must work as hard as possible at the negotiating table in order to make doing business under the agreement as easy as possible for companies in the United States and European Union. Doing so will improve the efficiency and competitiveness of both economies.

American and European workers are among the world's most productive and innovative. In a future where innovation will become ever more important to economic health, the markets that are most receptive to modernization will prevail. Issues such as attracting the world's talent, encouraging risk-taking, and streamlining regulatory obstacles will be increasingly important to economic success. The latter should be a strong focus of TTIP and will be its greatest challenge.

My son spent the last year teaching English and basketball in Spain and traveled the continent on weekends. He summed up the European view thusly: "If it can be difficult, why make it easy?" There are times when an extra layer of attention or difficulty can be advantageous, perhaps even charming: cuisine, culture, or Versailles. However, when it comes to growing an economy, "difficult" is not a recipe for success.

Finding a solution that makes easy the new norm must be a primary focus for TTIP negotiators. The World Economic Forum's most recent Global Competitiveness Report shows a wide variability within the two regions on the measure of the burden of government regulation. Among the 144 countries rated, Finland has the sixth-highest mark and Italy ranks No. 142. Britain (No. 72) and the United States (No. 76) rank in the middle. France, which has emerged as a key critic of TTIP efforts, falls in at No. 126. To accomplish its aim and deserve the support necessary for passage, the end product must be a result closer to Finland than Italy.

Difficult negotiations will be required with those industries, countries, and states that have a special privilege or onerous restriction they wish to preserve. Reaching an agreement that enhances the competitiveness and global relevance of the West requires that those negotiations succeed.

Negotiators would be wise to keep in mind the words of Winston Churchill, "Success is not final; failure is not fatal. It is the courage to continue that counts."

No one should take the vaunted status of the United States and Europe in world affairs for granted. It can fade unless action is taken. It will require courage. While perhaps harder to come by in a time of peace than during conflict, it is upon the display of such courage that their joint future depends.

Miguel Villagran/Getty Images

Shadow Government

Getting Egypt Right This Time

In the aftermath of the Egyptian military's ouster of President Mohamed Morsy, much of the debate in Washington has focused on the question of U.S. aid. Should the United States call the military's action a coup and suspend aid as demanded by the law, or not? The answer has been hotly debated, with prominent analysts and former officials coming down on either side.

But the question itself is the wrong one, and the narrow focus on U.S. aid is misplaced. As is the case with the long debate on arming the opposition and setting up a no-fly zone in Syria, it is generally misguided in foreign policy to zero in on and debate a specific tactic in the absence of any clear sense of one's objective or strategy for achieving it.

In the case of Egypt, the United States has a number of interests at play, but the one most relevant to current events is regional stability. For Egypt to play a positive role in maintaining the stability of the region, it must not only pursue stabilizing foreign policies -- such as maintaining its peace treaty with Israel and working to counter terrorism and nuclear proliferation -- but it must also be stable domestically. 

Morsy seemed willing, at least initially, to pursue stabilizing foreign policies; however, his majoritarian -- and increasingly authoritarian -- approach to governing further destabilized Egypt rather than stabilizing it. At a moment when Egyptians needed their best and brightest to coalesce around principles and plans to lead their country out of political and economic crisis, Morsy sought to institutionalize Islamist ideology and amass as much power as possible for his own movement, the Muslim Brotherhood, to the exclusion of others.

The Egyptian military's solution to Morsy's misrule, however, offers little consolation to U.S. policymakers. Not only does it appear to portend increased violence, since the Muslim Brotherhood and other Islamists will not simply acquiesce or fade away, but the disparate groups that came together to oust Morsy do not appear to have any clearer plan than he did for pulling post-Mubarak Egypt out of its state of persistent and deepening crisis. 

Washington would have preferred that Morsy be removed -- or his power diluted -- through a political power-sharing deal, which would have avoided the first problem by keeping the Brotherhood in politics and off the streets, and which would have potentially helped address the second. The challenge for U.S. policymakers now is to achieve the result that Barack Obama's administration seemed to prefer before June 30 -- a coalition government focused on alleviating Egypt's crisis -- against the backdrop of a military intervention and escalating violence. 

In practical terms, this requires a quick transition from military rule to a civilian government, though not necessarily an elected one at first. To avoid a repeat of the mistakes and turbulence of Morsy's tenure, the United States should emphasize pluralism and respect for human rights; the building of democratic institutions, especially a constitution conforming to broad principles to which most Egyptians can agree, and the development of political parties; and the development of a plan for resolving the economic crisis -- rather than calling for immediate elections. Elections are necessary but, as Morsy so clearly demonstrated, not sufficient to make a democracy.

This brings one back to the question of U.S. military assistance to Egypt. While significant at $1.3 billion, this assistance does not provide the United States with much leverage over the Egyptian military. This was vividly illustrated over the past week, during which Egypt's generals disregarded the Obama administration's explicit and public warning not to oust Morsy. 

While both Egypt and the United States reap benefits from their military relationship, the logic of providing Cairo with a steady stream of tanks and jets has eroded as the Cold War and the Arab-Israeli wars have faded into history. It may make sense to reconfigure and renegotiate that relationship, but the United States should be under no illusions that threatening to do so will compel Egypt's generals to do what it asks.

What does appear to concern Egypt's military and its allies, however, is the stigma that accompanies the "coup" designation, with its strong connotation of illegitimacy. If the United States makes such a designation, it is reasonable to expect that others will follow, compromising whatever government succeeds Morsy's. This provides Washington with leverage, but it will largely disappear once a determination is made. Thus, the best course of action is to defer the decision temporarily, giving the military and its allies time and incentive to act responsibly.

The other major source of leverage that the United States should seek to employ is international assistance. The economic disaster that loomed prior to Morsy's ouster continues to hang over Egypt, threatening the success of any government, however it is constituted. To emerge successfully from this crisis, Egypt will require external financing in the form of both official assistance and private investment. While U.S. aid is too small to make much of a difference to Egypt's fortunes, the sum total of assistance that can be offered by America's allies is far more significant. 

To credibly put these two incentives -- international legitimacy and international aid -- on the table, Washington will need to make a major push to line up the support of allies within the region and outside it. The most skeptical may be America's Persian Gulf allies, most of which welcome Morsy's fall, and all of which have been displeased with U.S. policy, not only toward Egypt but toward other regional issues. Getting these allies on board will require overcoming a perception of U.S. passivity and inconstancy and demonstrating a willingness to act decisively not just on this issue, but also on others of vital importance to them, such as Syria and Iran.

In Egypt, the United States has been given a second chance it hoped not to require. To make the most of it, American policymakers should view it not just as a chance to revisit U.S. policy toward Egypt, but to reassert American leadership in the Middle East.