Japan-EU trade deal shows allies not afraid to leave US behind

Earlier this month, the European Union and Japan reached an agreement in principle on a new trade deal that will cover some 40 percent of global trade. Set to eliminate up to 99 percent of tariffs on goods and remove a host of other barriers to trade between the two parties, the deal will also help the EU and Japan shape the rules for the modern global economy.

In light of the rise of protectionist rhetoric in recent years, the agreement also sends a powerful signal about the future direction of global trade.

{mosads}At a press conference on July 6 to mark the deal, European Commission President Jean-Claude Juncker was explicit: “The depth of this agreement goes…far beyond our shores. It makes a statement about the future of open and fair trade in today’s world. And it shows that closing ourselves off to the world is neither good for business, nor for the global economy, nor for our workers.”

The message could hardly be clearer: if the U.S. retreats from the global economy, it will lose out — and its closest allies will not wait behind. That it was delivered on the eve of the G-20 gathering of the world’s largest economies, including the U.S., made it yet more poignant.

The EU is a powerful trading bloc and is already the biggest trading partner for more than 80 countries in the world. In recent times, the EU has looked to up its game on trade. Earlier this year, it approved a large-scale agreement with Canada that will elevate political and economic ties with a key strategic partner. Beyond the imminent EU-Japan deal, Europe is also seeking to boost trade ties with Mexico, South America, Australia and New Zealand, among others. 

President Trump, meanwhile, on his first day in office, abandoned the Trans-Pacific Partnership, a deal that would have accounted for 60 percent of global GDP. He has also initiated efforts to reform — though not abandon — the NAFTA trade agreement with Canada and Mexico. While an update of the 20-year-old NAFTA makes a degree of sense, the U.S. has also called into question trade ties with key partners, such as Germany, and queried the value of multilateral fora such as the World Trade Organization (WTO), which sets the rules of global trade.

It is critically important for businesses and workers that America does not retreat from the world stage. For a century, the U.S. has predicated its economic and strategic success on advancing global economic integration and development. American companies of all sizes rely on open markets to thrive in what is today a ferociously-competitive global economy.

As U.S. businesses in Europe, we strongly support initiatives such as the EU-Japan free trade agreement that set pioneering standards and provide new possibilities for our companies to thrive and grow. In turn, this helps our companies create jobs and grow the economy back home in the U.S.

Positive American engagement with the world on trade only serves to enhance these opportunities. Rebooting trans-Atlantic trade talks — in some form — would be a good start. An EU-U.S. agreement would boost American ties with its oldest ally and enable the two blocs to together help set standards for the future.

Enhanced strategic cooperation with European and Asian partners will also reinforce the security and welfare of U.S. citizens and businesses. U.S. companies, which boast an unmatched global footprint, are ready to help wherever possible to secure the future of the U.S. economy and the prosperity of its workers and businesses.

Susan Danger is CEO of the American Chamber of Commerce to the EU (AmCham EU), which speaks for American companies committed to Europe on trade, investment and competitiveness issues.

The views expressed by contributors are their own and not the views of The Hill.