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The European Union, the United States, and Trade: Metaphorical Climate Change, Not Bad Weather
[journal article]
Abstract US and EU trade relations exhibit a set of chronic and secularly unsustainable imbalances, in which new Schumpeterian leading sectors and catch-up growth create growing tension in the asymmetrical and somewhat hierarchical US-EU relationship. These imbalances exhibit two distinct cycles interrupted ... view more
US and EU trade relations exhibit a set of chronic and secularly unsustainable imbalances, in which new Schumpeterian leading sectors and catch-up growth create growing tension in the asymmetrical and somewhat hierarchical US-EU relationship. These imbalances exhibit two distinct cycles interrupted by a clear structural break in the 1970s and an emerging cycle after the 2008-2010 crises. Each cycle has seen rising US current account or trade deficits with Europe provoke some financial or political crisis. Each crisis produced a US-led solution producing even greater imbalances in the next cycle, with concomitant stress on the asymmetric US–EU relationship. The EU and particularly the northern eurozone economies typically have relied on export surpluses for growth. But relying on export surpluses for growth reinforces EU dependence on the US and the US dollar at a time when US domestic politics are increasingly hostile to trade deficits and tension with China is rising.... view less
Keywords
EU; United States of America; international economic relations; export policy; foreign trade; international economics
Classification
International Relations, International Politics, Foreign Affairs, Development Policy
Economic Policy
Free Keywords
European Union; Schumpeter; institutions; power; technology; trade
Document language
English
Publication Year
2022
Page/Pages
p. 186-197
Journal
Politics and Governance, 10 (2022) 2
Issue topic
Out With the Old, In With the New? Explaining Changing EU-US Relations
ISSN
2183-2463
Status
Published Version; peer reviewed