The Case for Expanding the EU’s Transatlantic Relations

In 1917, in the aftermath of the sinking of U.S. merchant ships, President Woodrow Wilson told Congress in his request for a declaration of war on Germany that “the world must be safe for democracy [and] its peace planted upon the tested foundations of political liberty.” While the histories of the peoples of Europe and the United States were deeply intertwined in centuries past, it was not until Wilson’s enduring remarks that the fates of their societies became explicitly linked. Today, the transatlantic alliance between the United States and Europe—the bedrock of the postwar liberal order—is experiencing an unprecedented crisis, where it is not external forces but internal politics that pose the greatest threat.

In recent years, the United States and several European countries have experienced what Financial Times journalist Martin Wolf calls a “democratic recession.” A series of structural economic downturns, rising inequalities, low social mobility, and declining productivity growth have contributed to this trend. As a result, citizens have begun to lose trust in the institutions of the democratic world. There is no denying the scale of the geopolitical rivalry between authoritarian states and their proxies aiming to shape a post-liberal world.

However, international systems do not always collapse solely because of external conflicts and wars, but also because of domestic crises. It was a combination of internal strife, domestic upheaval, and conflict that brought down Rome. Nor was it nuclear weapons that ended the Cold War, but a decaying Soviet system that dismantled the USSR and, with it, the bipolar structure of the world. Thus, for the transatlantic relationship to remain competitive in a changing geopolitical landscape, it should realign its internal interests to better reflect its international goals.

Two Sides of the Same Coin

Despite their differences and subtleties, the rise of nationalist and far-right movements on both sides of the Atlantic share the belief that forces of globalisation are undermining the moral fabric of local communities and the material hopes of those left behind by economic change. Some of these movements assert that the best response would be to shield from the world by raising barriers to goods, people, and ideas. In one of his latest rallies in Flint, Michigan, former president and current Republican Party nominee Donald Trump announced he would impose a 20 percent import tariff on all U.S. imports and a 200 percent tariff on Chinese-made cars from Mexico. If those measures are implemented, not only will they blow up the trade deal between the United States, Mexico, and Canada (USMCA) that Trump’s own administration negotiated, but they will also signify the nail in the coffin of an already-weakened multilateral trade regime. Regrettably, taking comfort in the possibility that a Democrat-led administration would take a pro-internationalist approach is misguided. The Joe Biden administration has comfortably followed Trump’s tariff playbook, in which confronting China unilaterally without addressing the impasse at the heart of the World Trade Organization (WTO) is the way forward.

On the other side of the Atlantic, protectionist rhetoric is stealthier. Many institutions of the European Union (EU) have adopted a new raison d’être around the idea of “open strategic autonomy.” In the realm of trade, the instrumentalisation of this economic statecraft involves a number of trade defensive mechanisms that aim to provide the European Commission with legal tools to act against third countries. While many of these instruments were designed as external geopolitical tools, they are also a way out of the EU’s internal inability to sign new trade agreements, such as EU-Mercosur.

In a move to maintain the cordon sanitaire against the extreme right, President Emmanuel Macron sought to hijack the EU’s trade agenda to please French conservative voters. This unilateral approach to trade policy creates a dilemma for the EU, as it hurts both rivals and allies. Furthermore, as a construct of multilateralism itself, the EU should have an existential interest in its preservation, as Professor Anu Bradford recently noted. The challenge for the EU is, therefore, to find the right balance between remaining autonomous and strengthening its leading role as a normative power in international relations.

The Other Transatlantic Relation: Latin America

In a 2020 op-ed, Joseph Borrell, the outgoing EU high representative for foreign affairs and security policy, urged EU members to see Latin America as the other transatlantic relation. And while the transatlantic outlook has traditionally been seen as exclusive to Washington and Europe, the time has come to broaden the dialogue. There is no question that the United States and the EU are the main architects of the existing liberal international system. Yet, it is the medium and small economies that have benefited the most from this rules-based order. Thus, with the growing insularity of the United States and the EU, it is right to wonder and voice concerns about what the future holds for the liberal order and those who rely on it.

Elsewhere in the world, and particularly in Latin America, the democratic recession coincides with a persisting trend in the deterioration of living standards. Between 2015 and 2024, according to a report from the UN Economic Commission for Latin America and the Caribbean, the region exhibited an average growth of 0.9 percent—a record low compared to the 2 percent recorded during the “lost decade” of 1980 to 1990. Further escalation of trade protectionism would hamper access to markets and critical resources, hurting those countries whose exports and economic activity are heavily dependent on the growth prospects of their main trading partners.

In Latin America, deteriorating material conditions go hand in hand with rising levels of insecurity, violence, and the weakening of the rule of law. Dissatisfied with democratic institutions, citizens have begun to flirt with the idea that strong leaders operating above the law would be a better choice. This trend is reflected in the electoral success of those who promise their voters a false dilemma in which there exists a trade-off between democracy and security. This political shift also has global implications, as there has been a continuing tendency for these rulers to identify and ally with other autocratic regimes.

Conclusion

International systems do not always collapse solely due to external threats; they can also collapse due to internal dynamics. Sometimes, the geopolitical contest begins at home. The transatlantic alliance should focus on building inclusive and resilient economic partnerships where countries can voice their concerns about the future of open trade, technology, and durable supply chains in strategic industries. In particular, deeper cooperation on the green energy transition could solidify transatlantic leadership with Latin America based on shared environmental and development goals. Looking at Latin America as part of a broader transatlantic agenda represents a strategic opportunity for the EU and the United States to increase their influence in a geopolitically fragmented world. As a region mainly comprised of democracies, Latin America can contribute to an ambitious, social, green, and digital transformation based on liberal values. Ultimately, the success of an enhanced transatlantic relationship will depend on its ability to bridge internal divides and work effectively in the pursuit of a common goal: “a world in peace planted upon the tested foundations of political liberty.”

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Note: This piece was originally published as a background memo for the Council of Councils Fifteenth Regional Conference, an initiative by the Council on Foreign Relations (CFR) in Brussels on October 27–29, 2024.