World Trade Week features EU update
A noted speaker says the EU is good for Europe and good for U.S. trade.
The European Union has had its share of critics and doubters over the last couple of years, but John McCormick, featured speaker at World Trade Week in Grand Rapids this week, believes it has turned a corner.
“Things are looking better” for the EU, the Indiana professor told the Business Journal. He is the author of a 2013 book, “Why Europe Matters; The Case for the European Union,” and will be speaking at a luncheon on Thursday as part of World Trade Week.
The luncheon also will feature remarks by Ioanna Efthymiadou, consul general of Greece and the EU local chair based in Chicago. The event is among several sponsored by GVSU’s Van Andel Global Trade Center, the U.S. Commercial Service and the World Affairs Council of Western Michigan.
In late May there will be elections of representatives to the EU across Europe, which could be very important, according to McCormick, because there is “a right-wing, anti-immigrant backlash taking place with the European Union, and some of the parties that support those policies are projected to do pretty well.”
He said the EU, which is headquartered in Brussels, has come under a lot of criticism in recent years, triggered by the economic disarray within some member nations such as Greece, Spain and Portugal. However, those nations have had to “swallow some medicine” to cure their internal problems, and in the last couple of years, the situation has been on “an upward swing, rather than a downward swing,” with signs of recovery in all of the EU nations, McCormick said.
The unemployment rate averages about 12 percent across all EU members, which is higher than in the U.S. But in Greece alone, the unemployment rate is still about 27 percent.
“So 12 percent across the European Union is, relatively speaking, not too bad,” he said.
Going back to the days of the individual nations prior to the formation of the EU “would be counterproductive and bad for much of Europe,” said McCormick.
McCormick, who is originally from the U.K. but has lived in the United States for 27 years, said the EU represents a single market for world trade — “the wealthiest marketplace in the world.”
It is not the biggest marketplace: The largest by population are China and India, he noted, but the GDP of the EU is about $17 trillion, which is bigger than the economy of the United States.
“So (the EU) is a very big and very wealthy marketplace,” he said, with a population of 505 million.
The associations created among the various members of the EU are very good for Europeans, he said, bringing down trade barriers and harmonizing regulations. In April, for example, the member nations did away with cell phone roaming fees within the EU, which affects individuals and business alike.
McCormick said the individual European nations “by themselves are not major actors on the world stage,” but when the 28 nations work together, other people around the world must take notice.
Another major issue directly involving world trade is the Transatlantic Trade and Investment Partnership, a new trade agreement the U.S. is currently negotiating with Europe with the goal of bringing down trade barriers.
“Both sides really need each other at the moment,” he said, given the economic difficulties experienced recently in the U.S. and Europe, and the looming specter of China dominating world trade.
McCormick said Russian’s involvement in the Ukraine crisis will probably raise questions from the audience Thursday. He readily concedes he may not have any answers because he does not know “what goes on inside Vladimir Putin’s head.” However, he said, Putin’s actions could be putting trade with Europe and the U.S. at risk.
“We have to do something to stop him, but the question is what do we do, short of military intervention?” said McCormick. He does not believe that would work, and the U.S. can’t afford it anyway. It would be a military conflict totally unlike the Iraq and Afghanistan situations, he noted.
The Russians “are complaining that their high-tech sector is going to be affected” by the sanctions threatened by the U.S. and by European nations. “Well, I’m sorry but I have absolutely no sympathy at all for them. They need to behave themselves,” said McCormick.
He said the Europeans are a bit nervous because they rely on Russia for much of their natural gas and their oil.
“Well, if the Russians do cut it off, they’re going to have to lose the profits they make,” he said, adding it is “a two-way street because the European Union is the market for about 70 percent of Russia’s exports.”
McCormick is the Jean Monnet Professor of European Union Politics and teaches political science at Indiana University-Purdue University Indianapolis.