Europe Is More Dependent on the US than China

Europeans are no longer interested in the United States. However, U.S. policy is much more important to the European Union than to any other country. Certain tasks are possible only with [the Americans].

The degree of German public disinterest in the congressional elections in the United States is frightening. No matter how insignificant, every scandal gets more attention. But it is irrelevant to Germany who has the final say in the House of Representatives and Senate. What a mistake!

The U.S. is still by far the most important and largest economy in the world. Although it is always claimed that China has economically overtaken everything and stands at the pinnacle, this statement is wrong even when one focuses on local purchasing power, which asks how much the Chinese can buy with their aggregate income in a “weighted” appraisal of all costs for China — regardless of quality and international attractiveness.

In the 2013 ranking of purchasing power-adjusted gross domestic product (GDP), China has 16.2 trillion which, in fact, is only slightly behind the U.S. (16.8 trillion “international dollars”) and well ahead of the euro area (12.4 trillion).

Huge Trade Surplus Instead of Deficit

But if we take the real purchasing power in world markets on the whole as a benchmark, China’s GDP to current exchange rates in U.S. dollars paints a completely different picture; the United States stands alone with their $16.8 trillion at the top, far ahead of the euro area, which has $12.7 billion and China with $9.2 trillion.

The world economy is less interested in what is happening within China than what is happening in world markets. Indeed, China is the number one nation of exporters, but still imports around $400 billion behind the U.S.

Most notably, the United States dominates the trade of services, which as the driver of growth in the 21st century has an incomparably more important role to play than the trade of commodities. For services, the trade volume of the U.S. is just over $1 trillion, twice what China implements.

For the German economy, China is undoubtedly important. But the U.S. remains significant. With no other country has the German economy achieved a larger trade surplus. In 2013, the trade surplus with the United States was more than 40 billion euros. Compared to China, however, there was a trade deficit of over seven billion euros.

Europe Remains More Dependent on the United States than China

That isn’t to say that it is irrelevant how China further develops, nor whether the impressive growth rate of the past decades can be maintained. Of course, German exports and imports will gain ground with Southeast Asia simply because of the rapidly growing population. But it’s now high time to realize that Germany remains more dependent on the U.S. than on China.

The U.S. is not only important as a trading partner for Germany. They are indispensable for Europe as an ally — first, from a political perspective to create and secure peace and freedom; second, from an economic perspective to battle for open markets and international legal security.

It is the ignorant arrogance of Europe to believe that stable, Western notions corresponding to international economic order can be preserved alone and without the active support of the United States, [a nation] that respects human rights and [ensures] individual fundamental rights and freedoms — especially freedom of expression and freedom of religion, property and self-determination, equally guaranteed for all. For successful and sustainable trade between Germany and China, [these traits] are also indispensable.

Fracking Makes the Americans Independent

It is therefore crucial to understand to whom the Americans transferred power in Congress. And the decision can have dramatic consequences for Europe, which may be an idea many are fond of.

A current highly debated question in the United States is how far the U.S. will go to police the world in the fight for open markets, or whether the other Western states — especially Europe and in particular Germany — must be held more accountable.

If, as expected, the Republicans win the midterm elections and a general shift to the right is the result, then the U.S. will continue to focus on their own national interests. They will no longer so easily rush to the doorstep of Europeans to help with their problems.

And since the U.S. is increasingly independent of foreign oil and gas thanks to fracking, Middle East oil fields are losing their superior strategic importance. They can thus afford restraint in [their involvement in those parts of the] world.

U.S. and Europe Have No Closer Partner Otherwise

Europe is more for relying on a good trans-Atlantic relationship than the U.S., particularly because political conflicts escalate far away from the U.S. in the immediate European neighborhood — in the Ukraine, North Africa and the Eastern Mediterranean as well as in Syria, Iraq and Afghanistan. Without the United States, the insufficiently prepared military of Europe is relegated to merely a spectator role and yet is always in danger of becoming involved in armed conflicts against its will.

Only together with the U.S. does Europe have the chance to preserve common Western interests in a future that will be so completely different from the past. Emerging economies or governments driven by religious movements will no longer accept rules for the global economy unilaterally imposed by the West.

They want a say and want to contribute their perspectives, values and interests. In this choir with many voices, Europe won’t have the slightest chance to make itself heard as a soloist. At best, we can succeed with the United States by acting as a counterweight to the growing emerging economies.

For all their differences, Europe and the U.S. stand very close on important matters. The differences are much less than [those that exist between Europe and] any other culture. Both have no closer partner in the world when it comes to introducing truly fundamental Western beliefs and values in a new world economic order.

Therefore, it is far from reassuring for Europe and Germany if the noninterventionists gain ground in U.S. elections. As if Europe doesn’t already have enough to worry about, these new, additional problems will heavily cloud European prospects.

About this publication

Be the first to comment

Leave a Reply