Continental Rift: Bridging Transatlantic Differences on Economic Policy Toward China

The European Union and the United States had long been at odds over how best to deal with China. The European desire to sell arms to China in 2005 erupted into a damaging transatlantic row. And at the G20 summit in Seoul, South Korea, in November 2010, European governments refused to back U.S. efforts to press China more forcefully to appreciate the Chinese currency, the renminbi.

While these squabbles had grabbed headlines, they painted an incomplete picture. In recent years, there had been reassuring evidence of growing tactical cooperation between Washington and Brussels on trade matters. Moreover, in a global economy, there was a growing commonality of interest between the European Union and the United States on business and commercial issues now that China had become a leading trading and investment partner for both economies. At the same time there was a shared frustration with Beijing’s recent actions constraining the activities and opportunities of European and U.S. businesses in China. And there were a common set of problems that Europe and the United States could work together to solve, involving Chinese investment, government procurement, intellectual property, and subsidies policies.

Nevertheless, there was a glaring absence of a shared game plan for future transatlantic economic relations with China. Fortunately, a common perspective and the political will to achieve such a strategy might finally be at hand in both Brussels and Washington. If the European Union and the United States failed to seize this opportunity, they might long regret it.