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I agree with you that the EU means changes in many ways for the US businesses. No longer will a company be able to plot one Europe country against another; however, that is a good thing. By helping them create this pack and the fact that the countries involved are our allies in NATO means the US will finally deal with one governing body.

The draw back to the EU growing stronger is that the US will lose some ability to malipulate the countries of Europe and their inability to defend themselve. What is even more weary to some is the combined purchasing power of all the countries will match or exceed the purchasing power of the US meaning they may one day be able to dominate the world market. How the US handles this changes and the problems that they will bring will show how much we as a nation have grown up.

Therefore, I would recommend and would like to see America and the EU work together to preset the base market needs of each of us so that while providing jobs for everyone in the future, our countries don’t cut off the hanf that feeds us all. For there are only so many of any product people will buy and over/under manufacturing of these products will cause both markets to grow unstable.

Damon, it may help to clarify if you think of the EU as a kind of NAFTA. No European countries are giving up their sovereignty. Each will retain its own national identity and borders. But as Mexico, Canada, and the U.S. have opened their borders to free flow of products, goods, and services, and work to maintain stable currency and trade balance between them, so too will the EU and its member nations.

To the extent that the EU attempts quasi-federalism, one can be absolutely certain that it will not resemble America’s federalism among its member states. Its foundations, premises, goals and allowances will not reflect much of the particulars or details of our own. Our federalism is based upon a single national identity for purposes of self-defense, and a common set of laws superceding and binding upon all member states. The EU’s unity will be very different in nature, based primarily on free trade and markets, not defense and common federal laws governing social and cultural behavior as ours has and does.

Your note of caution is warranted however. As we speak, the world is being reshaped by regional trade identities and collective trade pacts and associations. The Asian Pacific Rim trade organziation, the EU, our own NAFTA, and others such as the pact agreements between Russia and China. The regional trade pact that can produce the most for the least while elevating a middle class in their member nations, will take the economic leadership position in the globalization process.

Over time, the leadership role may change from one regional area to another. What this portends is that the U.S. enters this competitive arena of regional trade pacts with serious weaknesses. The U.S. economic leadership role is waning as the debt looms ever larger and our economic and fiscal agility moves toward rigor mortis.

The powerful economic trade pacts of tomorrow will be those who can say no, we can do without your offer, to other regional pacts and nations. The ability to turn down trade agreements and survive and grow on internal resources and demand, even for short periods, will be the most powerful cards played in the globalization poker game.

U.S. dependency on imported natural resources, and low cost imported consumeables while running ever higher fiscal and trade debt balances puts the U.S. in this poker game with little resources with which to call the bets and bluffs, and forces us to fold when we are not dealt a pat hand. This is the caution and warning, no one wants to speak about in the U.S. regarding globalization.

But, we had better accept the reality but quick, if we want to improve our position - because there is no stopping the globalization poker game well underway already.

As far as an emerging economic and political rival goes, I still think China is a FAR more important player (in the short and medium term) than the EU.

The EU is still such a top-down political experiment with very shaky popular support, and a million factors could still lead to their utter meltdown. We’re talking about countries with widely divergent histories and values who have fought countless cataclysmic wars against each other—several in recent memory, and sizeable countries still recovering from a half-century of Communist oppression.

In the long run, I think a strong and vibrant EU would be very good news for the US—both as trading partners at military allies. What isn’t going to work is an economically unified EU socialist utopia which still depends on the US to bankroll its defense. Too much of the EU’s vision for itself depends on that model—unfortunately for them, the American public isn’t going to be willing to cooperate forever.

The EU sits in the most vulnerable part of the world, the politically volatile middle and near east right on its doorsteps. So far, they haven’t even begun to prepare for and consider what this means for their long term stability.

We are in total agreement, Martin. China is poised to take the regional leadership role from the U.S. in about 6 to 10 years - IF the U.S. does not get its fiscal and GDP house in order.

The EU does have potential for being an economic ally as opposed to reluctant partner. The Europeans however, are capable of unified boycotts, though. And the U.S. should not lose sight of that potential pitfall.

You are dead right on the military situation and the EU. Our government did the right thing to put Europe on notice, that they need to prepare to carry their own weight regarding EU defense. The 10 year time frame too was appropriate in terms of giving them time to prepare for our downsizing and redistribution in Europe. Perhaps they can be induced to speed up their development over the next 6 years or so.

Simply astounding. I agree with the first half of David’s comment. The EU’s federalism will be a much more fractured one than the US. I think of the US under the Articles of Confederation. In particular the French and Germans will be trying to assume their place as the leaders of Europe and you can expect that to generate all kinds of friction.

As a more regional ‘trading bloc’ the EU should be allowed to fully shoulder their own security costs and not rely on the military welfare of the United States.

As for the second half of David’s exposition I couldn’t disagree more…

The U.S. economic leadership role is waning as the debt looms ever larger and our economic and fiscal agility moves toward rigor mortis.

The ability to turn down trade agreements and survive and grow on internal resources and demand, even for short periods, will be the most powerful cards played in the globalization poker game.

…U.S. dependency on imported natural resources, and low cost imported consumeables while running ever higher fiscal and trade debt balances puts the U.S. in this poker game with little resources with which to call the bets and bluffs, and force us to fold when we are not dealt a pat hand.

The US economy is not in decline. History has shown that those who open their borders the most will benefit the most. Markets which do not allow free competition stunt their economies to the detriment of the whole. The whole principle of markets is based on efficiency, cost, and dare I say it— trade. The exchange of goods and services. Imports and exports do not know borders. Goods have no nation status.

On the coast of California you can buy a square one room hut for half a million dollars. In other parts of the state you can buy huge 10-15 room luxury homes for the same amount. Which part of California is in rigor mortus?

Eric, US GDP, 3.2% - Chinese GDP 8% (the lowest in a decade). The facts speak otherwise about your optimistic view.

Also note the following which speaks to the future and U.S. agility:

USA Today:: BRUSSELS — The World Trade Organization decided Tuesday to authorize the imposition of sanctions against the United States by the European Union and other leading U.S. trade partners in response to illegal antidumping rules, officials said.

David,

Eric, US GDP, 3.2% - Chinese GDP 8% (the lowest in a decade). The facts speak otherwise about your optimistic view.

3.2% of what?

List of total GDP by country (Current Exchange Rate Method) Total GDP 2003 (millions of Ranking Economy US dollars). The ranking is different to the list above, which uses PPP method

1. USD 10,958,833 — European Union
2. USD 8,174,681 — Eurozone
3. USD 10,881,609 — United States
4. USD 4,326,444 — Japan
5. USD 2,400,655 — Germany
6. USD 1,794,858 — United Kingdom
7. USD 1,747,973 — France
8. USD 1,465,895 — Italy
9. USD 1,409,852 — Mainland China
10. USD 836,100 — Spain
11. USD 834,390 — Canada
12. USD 626,080 — Mexico
wikipedia

I don’t see how your figures bolster your argument that we must ready to put up trade barriers.

The ability to turn down trade agreements and survive and grow on internal resources and demand, even for short periods, will be the most powerful cards played in the globalization poker game.

Let’s say the EU did impose trade sanction against the United States. Would the best response be to raise tarifs or otherwise increase trade barriers? Wouldn’t the taoist thing to do be to drop the Byrd Amendment and let them sell us goods at below cost? In other words when someone pushes you instead of pushing back, give way.

The Byrd Amendment, named for its sponsor, Sen. Robert Byrd, D-W.Va., directs the government to pay dumping duties it collects to U.S. companies that prove they are victimized by imported products sold for prices below cost or subsidized by foreign governments.

Most economists view the Byrd payments as a way of unfairly doubling penalties on foreign companies accused of dumping. First, dumping duties raise the price of their goods and make their products less completive in the U.S. market. Second, cash payments to U.S. rivals give U.S. companies a competitive advantage, economists argue. usatoday.com

What do you do when someone offers to sell you something below cost? This whole trade argument is completely offbase. If the EU governments want to subsidize their industries making those goods cheaper to sell to us I say let them! Their people are paying the cost.

Sorry, Eric, I should have been more clear, that was 3.2% growth rate this year, vs. 8% for China.

Eric, I never made an argument to support our putting up trade barriers. I am not sure where you got that notion.

My belief is that we must invest, and invest heavily and immediately in top quality public education like we have never done before, and produce a generation of innovators, inventors, creators, entrepreneurs, designers, engineers, and brokers and mediators who are experts in international trade, law, moderators and mediators, and negotiators. We are going to need an edge in the global marketplace in 10 years. Something of competitive value to export. For then, natural resources will cost us even more dearly than they do today, technological and industrial production will almost completely be exported to countries where human capital is far more affordable and profitable, and even larger segments of our food base and energy will be imported.

We need, IMO, to permit the U.S. Gov’t to hold co-owned proprietary title to innovation which is created by private industry using public funding, so that our Government can protect and maintain American innovation copyright, trademarks, and patents from being exported to nations who can supplant our production of same and circumvent licensing fees and royalties on American innovation paid for in whole or part by the American public.

I think it is dangerous to assume that the EU’s brand of federalism will remain loose. The momemntum of the EU’s development is not static, and many powerful Eurocrats indeed do desire a super state. A common militiary (or at least joint European force) is already being hammered out, and the fledgling constitution already specifies a common codex of pre-emptive EU laws that the individual states must follow.

Although a snapshot of the EU today does not harken to thoughts of a monolithic government, that does seem to be where the winds are blowing.

The comparison with the Articles of Confederation is apt, however it is also instructive of how loose confederations tend to quickly face the choice of breaking up (do to the difficult logistics of hegemonizing interests while maintaining individual sovereign states) or strengthening the nature of the confederation/union.

Unfortunately, the EU has already moved beyond mere economic union, which would have possibly been the optimal state for most of the EU’s members, to a more robust entity with new challenges.

I agree that the EU is not “ready for primetime” as a true super-state, but I suspect we will see that evolution sooner rather than later.

Well, Damon, I think this sort of thing is inevitable, given our status as the sole superpower and economic juggernaut. Those who think that the rest of the world would merely accept American dominion have another thing coming. There will be consolidation of power in regards to ours, and we need to prepare for a world in which we will have to ask favors rather than simply demand them.

Eric-
If China manages to decimate our production capacity on goods sufficiently, they can turn around and exploit our dependency. We need competition for manufacturing preserved here at home so we can force their prices down in that event.

Stephen,

I think this sort of thing is inevitable, given our status as the sole superpower and economic juggernaut. Those who think that the rest of the world would merely accept American dominion have another thing coming. There will be consolidation of power in regards to ours, and we need to prepare for a world in which we will have to ask favors rather than simply demand them.

This kind of prediction has been going on for quite some time. Arnold even touched upon it in his speech last night. Remember all the hubbub a few years back about how Japan was going to own everything in the United States? How they were going to bury us economically?

I’m not sure what drives such thoughts. Does it stem from a subconcious desire for America to decline? The left seems all to willing to settle for a zero sum game driven by the law of entropy in a downward economic spiral. Witness the Carter years. Witness the pronouncements of America needing to settle for second place in her declining years.

…Many of those who argue that US power is currently ebbing draw on the pathbreaking work of Yale historian Paul Kennedy. In his 1987 classic, “The Rise and Fall of the Great Powers,” Kennedy analyzed former great powers such as the Netherlands, Austria-Hungary, and Spain. He observed that historically, wars were won and empires sustained by those who possessed superior economic, rather than simply military, strength, and that an excess of foreign commitments left great powers particularly vulnerable.

The trouble was that military and economic priorities ended up clashing. Kennedy wrote: “A low investment in armaments may, for a globally overstretched Power like the United States, leave it feeling vulnerable everywhere; but a very heavy investment in armaments, while bringing greater security in the short term, may so erode the commercial competitiveness of the American economy that the nation will be less secure in the long term.”

And so, even at the height of the bipolar rivalry between the US and the USSR, Kennedy believed the emergence of multiple centers of power was inevitable. The United States, he averred, must find a way to manage this transition, which it was helpless to prevent.

But barely had Kennedy published “The Rise and Fall” when the Soviet Union collapsed, the Japanese economy entered a terminal recession, and the United States emerged stronger than ever. Kennedy’s pessimism was irrelevant, scoffed foreign affairs pundits; China might be rising, they said, but true multipolarity was a dim prospect, in no danger of return. In fact, the world was moving in the opposite direction. boston.com

Stephen, you inadvertently raised a frightening potential issue. The ‘Equal Force’ doctrine. Let’s say the U.S. allows itself to become almost entirely dependent upon, for example, Chinese manufactured imports, and China determines that one of our geopolitical moves is threatening toward China, to deter the U.S. China cuts off exports to the U.S. a bit, the U.S. does not relent, China cuts off all exports to the U.S., the U.S. still does not relent, China tells the EU to curtail its exports to the U.S. or it will curtail exports to the EU, and the scenario escalates yet further.

Here in the U.S. our police and domestic laws contain the concept of equal force, which states that if I pick up a rock to throw at you, and you shoot me dead, you can be charged and convicted of murder based on the equal force doctrine which states you had an extraordinary duty to not shoot to kill me, since my weapon used against you was not lethal in nature.

How does the U.S., or NAFTA respond to rejection of trade deals initiated in response to geopolitical/military actions taken in the world by the U.S.? Equal force doctrine is recognized by most peoples of the world as an intrinsically fair doctrine (although not abided by far too many).

This comes to mind since a very similar scenario was acted out on the world stage between the U.S. and Japan just prior to Japan’s attack of the U.S.
We constrained exports of energy products to Japan in retalliation to their aggressive geopolitical/military actions in China. World War II erupted.

Are we not entering an era of regional trade pacts that have such devastating power over the economies of other nations should they withdraw trade, that such actions can only be construed as pretext for war? And doesn’t measured response equal force doctrine fly out the window under such circumstances? There are a lot of nuclear countries out there who will no longer allow themselves to be bullied or intimidated.

Eric, your boundless optimism is heartening and I certainly hope it is prescient. But I was born in 1950 and WWII and the Korean War were very much the hot topics of my grade school and neighborhood education. In other words, it was not so long ago, nearly the entire world was engaged in war. Is it not prudent, knowing such events are possible, to anticipate a repetition and plan for avoiding the repeating of such horrific chapters in history, especially in a nuclear age?

Europe
The problem with the U.S./EU partnership is not European strength but weakness. Partnership doesn’t require everyone to contribute equally, but all parities must have something to contribute. The EU will never field a decent, mobile army capable of dealing with the world’s hotspots. It will be the U.S. burden as long as any of us are alive, and the Euro protestors will be complaining about our unilateral approach, while they benefit from American security. The EU is currently at the height of its relative power. It is downhill now. Many Europeans have evidently forgotten how to do the most important thing humans do – have children. The EU population will actually drop by 2050, (when the U.S. population is expected to exceed that of the enlarged Europe) leaving a bunch of pensioners eating at the public trough and complaining that nobody listens to them.

I hope I am being too pessimistic. There is some hope that the new members will revitalize the old continents. Just having more diversity is good and may counteract some of the old social democratic sclerosis, and a bigger market may encourage more of a free-market oriented EU.

China
I agree that the bigger “challenge” is China followed by India. China’s growth has been nothing short of phenomenonal, although (as someone pointed out) from a very low base. It is unlikely that such growth can continue as the new economy comes up against old governmental and organizational structures. China has made wonderful progress when you compare it with its own recent past, but remember that China is still officially communist and is a horribly corrupt and oppressive place. China’s biggest impact on the U.S. may be environmental, not economic. China may not replace the U.S. as the world’s largest economy, but it will soon be the world’s largest source of pollution and China, as a “developing country” is exempt even from proposed restrictions (like Kyoto). China is also facing a monumental social challenge. The one child policy worked. Family size is plummeting. This is generally good, but thought three thousand years of political vicissitudes, the one constant that stabilized China was the extended family. An extended family with one child, two parents, four grandparents and no aunts or uncles will not be up to the task.

India
India is the most uncertain of all. India has the longest to go. I think we should be optimistic, however. The Indians inherited many good institutions from the Brits, including the English language and representative democracy, and managed to stay mostly democratic since 1947. Beyond that, India is becoming more pro-American as Indian and American interests more often coincide and more Indians live and work in the U.S. (and go back home.)

Whatever we say now, the world sure will be different by the time our kids take over.

> Should each EU nation still have a seat
> in the UN General Assembly, giving the
> EU undue influence in world affairs?

You cannot beleive in proportional representation in the UN if you don’t beleive in it here at home. I support both: A proportional Senate (either New York City gets like 16 senators out of a couple hundred, or the entire mountain time zone gets like 4 Senators out of one hundred). Similarly, the US should have five times the representation in the UN as France — and China should have five times the representation as the US. That would make the UN a fair international body.

I feel confident that the US will remain on top for a good long time. I want us to remain on top as long as there exists challengers who posess the ability to destroy us, militarily or otherwise.

The foreign threat I fear the most is the inevitable emergence of a new crop of nuclear states: Iran and North Korea may well be stopped in the short term either through invasion or some other technique, but in the long term (50 years) I don’t feel confident that we can stop them. And I think other nations - indeed, even some non-state entities - might develop nuclear weapons within my lifetime, and use them as leverage to accomplish their goals and to disrupt the balance of power in their region. Maybe we’ll be totally surprised like we were with Pakistan. This is what I worry about, big picture stuff, and I don’t think that Bush’s approach even begins to address these long term problems. We can pre-emptively swat down rogue state nuclear wannabes by ourselves for maybe the next 10-20 years or so, but what happens when the next wannabe isn’t in the axis of evil, but instead is a fair-weather ally like, say, Saudi Arabia? Or Egypt? What if it’s Japan or Germany? What if it’s in our hemisphere, in Brazil? Will we invade them too? We shouldn’t have to. This is why I fear a political vision like that of the current GOP where international alliances are not only discounted, but actually sneered at.

-Cf

-Cf

Well, we have proportionality in the US, balanced by a balancing senate, which is a good thing. It is the balance between the two that provides and incentive for smaller states to stay involved, and makes sure they are not completely passive. The Proportionality guarantees some pre-eminence based on size. Such a balance would be nice in the UN.

Personaly I don’t like the way that the UN’s representation has been set up.

However, there are other issues. Democracy for example. Should non democracies have the same input as democracies? In non-democracies, the UN representative can be said to be representing the interests of a single person (or small group of people) whereas in a democracy like the US, a citizen has 1/170,000,000th of an input for example (via a vote). Anyway, its arbitrary. I personaly wish there was an organization similar to the UN which included only democracies. It would make things a bit easier in the logic lab.

Apropose Europe and US Domination, this is all just a fulfillment of Hegemonic Balanace Theory. Smaller powers always tend to combine in Uni-Polar power situations. It’s been happening since the Peloponnesian War (though often the new balance results in stability rather than conflict). However, I think we may soon be moving to a multi-polar world. China and India will certainly grow to dominate Asia (although the geopolitical tensions of both nations, visavis eachother as well as visavis internal problems may limit this growth in the long run), and Russia will continue to be a power player even as the EU continues to grow.

Great Thread, I love when everyone isn’t spewing boasts and slurs, but discussing intellegent and interesting commentary.

I do think the EU is something that challenges the US economically, but not necessarily a threat.

I don’t believe China is a serious contender in the near term. They have enough problems feeding themselves at present. I do worry about instability as capitalism spreads democratic ideas.

Interesting that the EU in an Olympic context would be equated with a discrete national sovereignty. Other than team organization and support, I am not so sure nationality is or should be particularly relevant in a world community celebration.

Regarding Damon’s idea of a quasi-UN populated solely by democracies:
Who decides what constitues democracy? If there are “free” elections, but everyone who votes for the opposition is hunted down and killed, is that democracy? If the democratically elected leader is forced into exile by the military (e.g., Haiti), is that democracy? If a technicality allows a leader to be elected by a slim minority, is that democracy?
Remember that there’s no such thing as a pure democracy in the modern world. There are representative republics, with greater and lesser degrees of representation, but it’s all shades of gray. Contrary to Cold War thinking, you can’t separate the world into Us vs. Them.

Thankfully there are things called rules that could be used to define requirements. ;)