What Trump Gets Right About Europe
By Jochen Bittner – nytimes.com
HAMBURG, Germany — Most people can agree that international affairs should not be conducted by tweet — especially when the tweeter in question is Donald Trump. Among other reasons, it’s easy to dismiss the president’s mercurial rage and flagrant insults as little more than temper tantrums.
But that’s a mistake. Mr. Trump’s anger at America’s allies embodies, however unpleasantly, a not unreasonable point of view, and one that the rest of the world ignores at its peril: The global world order is unbalanced and inequitable. And unless something is done to correct it soon, it will collapse, with or without the president’s tweets.
While the West happily built the liberal order over the past 70 years, with Europe at its center, the Americans had the continent’s back. In turn, as it unravels, America feels this loss of balance the hardest — it has always spent the most money and manpower to keep the system working.
The Europeans have basically been free riders on the voyage, spending almost nothing on defense, and instead building vast social welfare systems at home and robust, well-protected export industries abroad. Rather than lash back at Mr. Trump, they would do better to ask how we got to this place, and how to get out.
The European Union, as an institution, is one of the prime drivers of this inequity. At the Group of 7, for example, the constituent countries are described as all equals. But in reality, the union puts a thumb on the scales in its members’ favor: It is a highly integrated, well-protected free-trade area that gives a huge leg up to, say, German car manufacturers while essentially punishing American companies who want to trade in the region.
The eurozone offers a similar unfair advantage. If it were not for the euro, Germany would long ago have had to appreciate its currency in line with its enormous export surplus.
ure, eurozone membership makes imports to Germany more expensive than they would be under the deutschemark; wage restraint has also helped maintain the competitiveness of German machinery. But how can the very same politicians and journalists who defended the euro bailout payments during the financial crisis, arguing that Germany profited disproportionately from the common currency, now go berserk when Mr. Trump makes exactly this point?
German manufacturers also have the advantage of operating in a common market with huge wage gaps. Bulgaria, one of the poorest member states, has a per capita gross domestic product roughly equal to that of Gabon, while even in Slovakia, Poland and Hungary — three relative success stories among the recent entrants to the union — that same measure is still roughly a third of what it is in Germany. Under the European Union, German manufacturers can assemble their cars in low-wage countries and export them without worrying about tariffs or other trade barriers. If your plant sits in Detroit, you might find the president’s anger over this fact persuasive.