by DEAN BAKER
It’s clear to all but the determinedly ignorant that Europe and the United States under Donald Trump are no longer allies. Trump is prepared to go to war to extend his racist vision of the world. Trump is not using euphemisms or code words; he wants white power and as long as European countries are open to immigrants from Asia, Africa, and Latin America, they will be on his enemies list.
The prospect of a hostile United States across the ocean and an aggressively hostile Russia on its border has to look bad to the European democracies. Making matters worse is that the countries of Europe are far from united and they have their own white power parties to contend with.
The leaders of France, Germany, the UK and other European countries will have to figure out how to make democracy look more promising to their populations than beating up dark-skinned people. But they also need to be open-minded in looking to allies. In this respect, Europe should have China on its speed-dial list.
No one has any illusions about China being a beacon of democracy. President Xi is an authoritarian leader who strictly limits dissent. However, unlike Trump, Xi does not feel the need to tell the Europeans how they should govern themselves. And he certainly doesn’t feel the need to push for white supremacy.
There is much that Europe can gain from closer economic ties with China. China’s economy is now far larger than the US economy. It also is the world leader in green technology. It has almost as many EVs as the rest of the world combined. The same is true of its installed capacity for wind and solar energy. It also is at the cutting edge in battery technology.
Europe can gain enormously by importing these items with fewer barriers, which would allow it to both substantially reduce transportation and energy costs, as well as greenhouse gas emissions. European countries will want to protect their domestic manufacturing sector, which still employs millions of people in these areas.
Towards this end, it should look to a limited market opening coupled with a commitment to technology transfer. The voluntary export restraints the United States imposed on Japanese cars in the 1980s are a good model for this path. Under this system, the Japanese car manufacturers restricted their exports to the US.
This meant they could sell fewer cars, albeit at a higher price, than if there were no barriers. At the same time, they rushed to build factories in the United States, since the cars produced here were not subject to the restraints.
The specific terms for this sort of arrangement would have to be negotiated, with China obviously preferring more exports and fewer requirements on technology transfer, but they have made similar arrangements with Thailand and other countries, so presumably it would be possible for Europe to arrange a deal along these lines. This is a clear case where there are large opportunities for both sides to gain from trade.
It would also be beneficial to both the Europe and China to build up an integrated financial system that does not depend on the United States, and specifically the SWIFT clearing house for international transactions. Even before Trump the United States has often used its power over this system to arbitrarily impose sanctions on countries and individuals.
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