The US-led post-war order kept the economic and the geopolitical domains linked but separate. The trade and payments system was initially meant to serve as a glue for the Western alliance, but for all practical purposes interactions between Economy and Finance ministers and their Foreign Affairs colleagues were limited to fringe cases of sanctions or export controls. Similarly, after the fall of the Soviet system, economic and financial globalisation was intended to strengthen political convergence, but again silos were kept essentially watertight.
This separation has gone – and not only because of the peculiar behaviour of the Trump administration. The US-China trade dispute, the Iran sanctions, the Belt and Roads initiative and European responses to what the EU regards as strategically motivated Chinese investment, to name a few cases only, all signal that times have changed. The fundamental reason behind this change is that China and the US are both economic and geopolitical rivals. Neither one separates economics from geopolitics.
The EU felt at home in a world made of separate silos that corresponded to its own distribution of competence. But it has started to wake up to a different situation that calls for a much more strategic approach to international economic relations. Trade, investment, technology, finance and the international role of the euro must be envisaged in a new context. At the same time, however, the EU remains a rules-based entity whose procedures leave limited scope for discretionary decision-making. And whilst they are all governed by the same rules, its member states have different perspectives on relations with the US, with China or with Russia.
As an economic think tank, we remain focused on what constitutes the backbone of international economic relations. But it is vital to develop a new perspective on the interrelations between economics and geopolitics. The relevance of this conversation is especially salient in the run up to the US presidential election. At this event, we start that conversation.
Chair: Jean Pisani Ferry, Senior Fellow, Bruegel
Piotr Arak, Director, Polish Economic Institute
Dominique Moïsi, Visiting Research Professor, King’s College London and Special Advisor, Institut Montaigne
Nathalie Tocci, Director, Istituto Affari Internazionali
Anne-Marie Slaughter, CEO, New America
Alexander Stubb, Director of the School of Transnational Governance, EUI