Skip to main content
main-content
Top

About this book

This major new text by leading authorities takes a broad interdisciplinary approach to the changing relationship between the EU and the US in the 21st century and its historical, global and domestic context. The authors focus on the contrast between the policy convergence and interdependence on the one hand and the intense competition on the other.

Table of Contents

Introduction

Abstract
The relationship between the European Union (EU) and the United States of America (US) is simultaneously highly significant and immensely challenging, both as the subject of academic analysis and as a subject of policy-making in both the EU and the US. It is significant because the EU and the US are two of the most weighty actors in the world arena, and because they are highly engaged in each other’s economic and political processes. What happens between the EU and the US matters, both to those directly involved and to those within the broader world arena by whom the effects of EU-US interactions are felt. The relationship is challenging because in addition to being highly significant, it is complex and dynamic: EU-US relations take place and have their effects in a multiplicity of issue areas and ‘sub-arenas’ within the world arena, and the openness of the transatlantic relationship means that changes in the world arena will in turn have important repercussions for EU-US relations. This book is an attempt to expose the complexities of the relationship and its impact on the world arena, to subject it to analysis and to evaluate its past, its present and its possible futures.
Steven McGuire, Michael Smith

Chapter 1. European Integration, Transatlantic Relations and the United States since 1945

Abstract
The system of relations that has grown up between the European integration project and the United States is dense and complex, and it is one of long standing. Central to the argument in this book is the growth and development of this system of relations, and its impact not only on its members but also on the world as a whole. For much of its life, the system has dominated the global economy and has played a key part in the management of global diplomatic and security issues. It is thus vital to understand the structure and functioning of the system, its central rules and assumptions, and the ways it has changed and developed during more than half a century. This is the focus of the first two chapters in the book.
Steven McGuire, Michael Smith

Chapter 2. Analysing the ‘Euro-American System’

Abstract
In Chapter 1 we provided an account of the evolution of the relationship between European integration and the United States since the end of World War II. Naturally, the emphasis there was on processes of historical continuity and change, and on the ways the relationships between the United States and the European integration process have been surrounded by other forces of broad continuity and change in the world arena. In this chapter the focus shifts: we are concerned here to identify the key components of the ‘Euro-American system’, to show how they work together and the ways in which they produce issues for policy and policymakers, and to show how analysts have approached the problem of explaining such a ‘complex and messy’ set of relations. In providing this more analytical focus, we shall of course be making use of the ‘historical’ information around which Chapter 1 was centred, and also of further case-study material to demonstrate the application of the ideas that will be discussed.
Steven McGuire, Michael Smith

Chapter 3. Trade

Abstract
This chapter is the first in this book to deal with a specific policy area and with the trends and issues that have occurred within it. Whereas Chapters 1 and 2 have covered broad trends and the changing nature of the relations between European integration and the United States, here the focus is much more on the particular characteristics of the policy area and of EU and US policies, on the ways in which these have generated tendencies towards competition or convergence, and on the ways in which the relationships has been managed. The chapter thus draws upon Chapters 1 and 2 for broad background, but focuses strongly on recent and current policy developments and their implications. It begins by exploring some of the main features of the trade relationship, proceeds by assessing EU and US trade policies, and then moves on to deal with some of the issues of management that have emerged within the relationship.
Steven McGuire, Michael Smith

Chapter 4. Money and the Macroeconomy

Abstract
Although, as we have seen in Chapter 3, trade has formed the longest-standing and deepest area of interdependence between the EC/EU and the US, it has come to be rivalled by the transatlantic relationship in money and finance. For political economists, international finance is a key, perhaps the key, driver of the international economy. The liberalization of financial markets, combined with technologies that enable the virtually instantaneous trading, has allowed financial institutions to act globally. The power of investment banks, hedge funds and other investors to influence, indeed in some respects reorder, national economies seems almost limitless. Yet, this view can understate the importance of political management of the sector. The chairman of the Federal Reserve may earn vastly less than the managing partner of Goldman Sachs, but the former remains a powerful and influential figure in international finance, not least as he has access to the range of political actors and processes in the most important economy in the world. Moreover, as actors like China attain greater prominence in the international economy, their relative imperviousness to corporate interests underpins the importance of state-to-state relations for managing the world’s money. Thus, while financial markets are indeed highly privatized, there remains an enduring management function at the political level, particularly among the big international economies: China, the US and the EU. In this regard, the European Union has used its experience with the Single Market Programme, and the resultant leverage as one of the world’s largest economies, to become increasingly activist in the area of financial services regulation.
Steven McGuire, Michael Smith

Chapter 5. Investment and Competition policy

Abstract
Chapters 3 and 4 have dealt with two of the ‘classic’ issues of international political economy — trade and money. In each case, we have seen that the development of policy and institutions in the EU has come into contact — or collision — with policies and institutions in the US. Thanks to the development both of trade and of the euro, the EU constitutes the US’s largest partner and/or rival in the world arena, and not unexpectedly this has given rise to disputes and sometimes confrontations. What we have also seen, though, is that there have arisen practices of cooperation and areas of common interest, both within EU-US relations and between the two and the rest of the world. With this chapter we move into a different area, one now especially prominent with the development of increased economic interpenetration and which involves the domestic regulatory structures of both the EU and the US. The impact of processes of globalization, leading to the intensification of interconnectedness between societies, especially in the industrial world, creates new issues of management and of institutional development, and this is one of our key concerns here.
Steven McGuire, Michael Smith

Chapter 6. Innovation

Abstract
In this chapter, we deal with an issue long established both in the EU and in the US, but which has been given considerable added impact by recent developments in the world political economy. To understand why Europe and America dominate the global economy — and why that dominance is slipping — it is important to assess the role of innovation. Europe, then America, both rose to economic dominance because these economies developed superior ways to manipulate the natural environment. They did so through a combination of serendipity, a trust in the ability of market forces to identify opportunities and an appreciation of the role of the state in the generation of knowledge.
Steven McGuire, Michael Smith

Chapter 7. Regionalism and Interregionalism

Abstract
The European Union is a regional as well as a global power. It is indeed the most richly developed, complex and successful regional political arrangement in existence. The United States too is a regional and global power; its regional relationships are constructed differently from the EU’s but both actors have sought to develop a complex web of geographically defined economic, political and — in the broadest sense — security relationships. Some of these owe their existence to history, while the new regionalism of recent years owes a great deal to both actors seeking to maximize their access to markets and secure foreign policy goals in the postcold-war world.
Steven McGuire, Michael Smith

Chapter 8. The New Europe

Abstract
In this chapter the focus of discussion changes in two senses. First, it is predominantly on the evolution of the post-cold-war order in Europe, as opposed to the largely global emphasis in Chapters 3 to 7. Second, it is primarily on security and diplomacy as opposed to the emphasis on political economy in much of Chapters 3 to 7. In terms of the argument put forward in Chapter 2 the discussion is thus more in the area of ‘high politics’ as opposed to ‘sectoral’ or ‘low’ politics. This does not of course mean that the previous arguments will be forgotten, but rather that we are taking a different ‘cut’ at the fabric of EU-US relations, and taking up a number of themes largely implicit in the preceding chapters.
Steven McGuire, Michael Smith

Chapter 9. World Order

Abstract
One of the consequences of the EU’s growing international presence and activity, and of the extension of its policies into new areas such as foreign and security policy, has clearly been a growing concern with what might broadly be described as ‘world order’: the ways in which the global system is structured and operates, and the ways in which it changes. For the United States, this has been a preoccupation since the beginning of the twentieth century, as the US became a world power, and particularly during the cold war and its aftermath, when the US was either one part of a superpower duopoly or (in more recent years) ‘the only superpower’.
Steven McGuire, Michael Smith

Chapter 10. The ‘Euro-American System’ and Beyond

Abstract
In Chapters 1 and 2 of this book we presented two linked views of EU-US relations. First, in Chapter 1 we explored the historical development of the relationship between European integration and the United States, charting a number of key themes and points of major change. In Chapter 2 we addressed the notion of the ‘Euro-American system’ — a structured set of relations involving not only the European integration process and the United States but also the networks, institutions and processes of policymaking in the transatlantic area, of which EU-US relations have been a growing if not now dominant part. We also noted in Chapter 2 that the ‘Euro-American system’ and EU-US relations must be viewed in the context of broader processes of global change and transformation, to which EU-US relations contribute at the same time as they are affected by them. In both chapters, we addressed the question of change: How much of what was established in the 1950s and 1960s is still recognizable in EU-US relations, how much has been changed, and how much has the relationship been transformed into something fundamentally different from what it was at its origins? The purpose of this chapter is to reappraise these key questions in the light of the detailed examination carried out in Chapters 3 to 9, and to identify a number of key current trends that may point towards different futures for the ‘Euro-American system’.
Steven McGuire, Michael Smith
Additional information