Saturday, November 22, 2014

The Coming Atlantic Century

PRINCETON – The United States is rising; Europe is stabilizing; and both are moving closer together. That was the principal message earlier this month at the annual Munich Security Conference (MSC), a high-powered gathering of defense ministers, foreign ministers, senior military officials, parliamentarians, journalists, and national-security experts of every variety.

The participants come primarily from Europe and the US; indeed, when the conference began in 1963, it was focused entirely on NATO members. This year, however, senior government officials from Brazil, China, India, Nigeria, Singapore, Qatar, and Saudi Arabia also joined, an important sign of the times.

John McCain, the US senator and 2008 presidential candidate, always leads a large congressional delegation to Munich. The US administration also typically sends the Secretary of Defense or the Secretary of State to deliver a ritual speech reassuring the Europeans of the strength of the transatlantic alliance. This year, Vice President Joe Biden did the honors, bumping the US representation up a notch.

The conference also featured a panel on an unusual subject – “The American Oil and Gas Bonanza: The Changing Geopolitics of Energy.” US Special Envoy and Coordinator for International Energy Affairs Carlos Pascual described “the US internal energy revolution”: a 25% increase in natural-gas production, which should push down US gas prices, and enough oil output to reduce oil imports from 60% to 40% of consumption, with an additional 10% increase projected.

Pascual projected that the US will be able to import all of its energy needs from within the Americas by 2030. A recent confidential study by the German Intelligence Agency raises the possibility that the US could actually become an oil and gas exporter by 2020, in contrast to its present position as the world’s largest energy importer. That honor would likely fall to China, which would become increasingly dependent on the Middle East. As an extra bonus, the higher US proportion of gas use has reduced US carbon emissions to 1992 levels.

The sense of US good fortune, a phrase that is not often heard around the world these days, increased with the panelists’ description of how lower energy prices for US manufacturing has a broad positive impact on the American economy’s competitiveness. As a result, the country’s energy reserves have also become an investment magnet. German Minister of Economics and Technology Philipp Rösler said that many German firms are already relocating to the US because of lower energy prices.

Equally important, the panelists reported on the rising importance of liquid natural gas relative to pipeline gas, which has enormous geopolitical implications. In a nutshell, if gas is exported in liquid form, it is fungible. In other words, if Russia restricts the flow of gas to Ukraine for political reasons, but the rest of Europe has gas from other sources, they can simply resell their gas to Ukraine and export it via the Baltic Sea.

Jorma Ollila, Chairman of Royal Dutch Shell, described the global map of major shale oil and gas deposits. Ukraine itself has the third-largest reserves in Europe; other countries with large deposits include Poland, France, China, Indonesia, Australia, South Africa, Argentina, and Mexico. And the US has already taken over from Russia as the world’s largest gas producer.

All of this data got Brazilian Foreign Minister Antonio de Aguiar Patriota’s attention. On a panel entitled “The Rising Powers and Global Governance,” Patriota referred to the energy discussion and noted that the rising powers should remember that “the established powers are not sinking powers.” In short, the pervasive narrative of Western decline suddenly reversed itself.

The horizon seemed brighter on the European side as well. In the opening panel on “The Euro Crisis and the Future of the EU,” cautious optimism prevailed. No one thought that the European Union’s troubles were resolved, but no one thought that the eurozone was coming apart, either. On the contrary, German Finance Minister Wolfgang Schäuble made clear that German resolve to see the eurozone through its troubles was firm. And a prominent economist in the audience who has often predicted the eurozone’s demise was backtracking rapidly.

Aside from reports of a rising US (fiscal woes notwithstanding) and a stabilizing Europe (despite the common currency’s troubles), the conference featured a speech by Biden that went far beyond the reassuring rhetoric that US policymakers typically offer in European capitals. Biden told the audience that he and US President Barack Obama believe that “Europe is the cornerstone of our engagement with the rest of the world” and “the catalyst for our global cooperation.”

Biden pointed out that “Europe is America’s largest economic partner,” recalling figures that the Asia-focused Obama administration has often seemed to forget: “over $600 billion in annual trade that creates and sustains millions of jobs on the continent and at home, and a $5 trillion overall commercial relationship.” Biden went on to suggest a “comprehensive transatlantic trade and investment agreement”; a week later, in his State of the Union Address, Obama announced the launch of negotiations for precisely such an agreement.

Biden concluded with a flourish. “Europe remains America’s indispensable partner of first resort,” he declared. “And, if you forgive some presumptuousness, I believe we remain your indispensable partner.” Those strong words reflect a new sensibility in Washington. As former Secretary of State Hillary Clinton declared in one of her last foreign-policy speeches, the US is not planning to pivot away from Europe to Asia, but rather with Europe to Asia.

Western fortunes are rising, slowly but surely. Together, Europe and the US account for more than 50% of global GDP, have the largest military force in the world by many multiples, and control a growing proportion of global energy reserves. They also have a formidable diplomatic and development-assistance capacity, representing a peaceful community of democracies that share a common commitment to the rights, dignity, and potential of all human beings.

Imagine that community spreading down the east coast of Latin America and the west coast of Africa. It might be an Atlantic century after all.

Read more from our "New Kids on the Bloc" Focal Point.

  • Contact us to secure rights


  • Hide Comments Hide Comments Read Comments (17)

    Please login or register to post a comment

    1. Commentedhari naidu

      This lady is of course US centrist-mind and there is no way one can re-educate her at this point in time.

      Those of us who follow annual Munich Security Conference understand the focus is finally but slowly moving away from an Atlantic-centrist view of the embrace emerging markets, and mainland China and India, in particular.

      Having retired as a global trade and development (EU) expert, I must remind her the next WTO boss will be a Brazilian (BRICS). Times are really changing and US and EU will have to focus on their (own) priorities while watching WTO take on issues which they might not necessarily desire at this international economic and financial cycle.

      Mind you US opposed the Brazilian candidate to replace Pascal Lamy.

    2. CommentedJacque Vilet

      She must be smoking funny cigarettes. How anyone can think that U.S. and Europe will become the economic power of the 21st century is not in the real world.

      U.S., Europe and Japan are mature markets --- and as consumer demand makes up majority of GDP I don't see how her prediction comes true.

      She sounds more like a politican then an economist. Why on earth was this published?

    3. CommentedOle C G Olesen

      Seldom it is to read such nonsense and political rhetoric !
      Talking sweet to the sick Auntie
      Recent events underline this ...

      But ofc the article represents the finest traditions of Mr Brezhinsky :

      and the onslaught on individual and national freedom instituted by Global Megacorporations ... and their OWNERS

      I as a European do NOT want to be part of the diabolic imperialistic actions of a megalomaniac and fascistoid USA
      only acting for the PROFIT af a few persons ..who already OWN somewhere between 50 to 75 % of all there is to own in this world ... in spite of this STEALING the remaining wealth of citicens ... as we have wittnessed during the later years .... in order to ...DIS-EMPOWER the COMMON PEOPLE !

      These Companies :

      WHO .. are the owners ?
      WE KNOW !

      Curiously above owners of the american dollar also are the majority shareholders in previously mentioned Mega-Corporations.. who own ...THE WORLD !

      And their Front-organisations ?
      We also KNOW :

      The Hudson Institute was not on above list .. here a bit Info on WHO ..the Hudson Institute represents :

      I as a European do not want to have the blood of Millions of Innocents on my hands ... as is the case for The UNITED STATES of AMERICA and the MULTINATIONAL MEGACORPORATIONS ...

      I have NOTHING in COMMON with these SATANIC ENTITIES !

      Geographically and Culturally I as a European have far more in common with RUSSIA and CHINA than a VULGAR and GREEDY MEGALOMANIAC UNITED STATES of AMERICA !

      China and Russia are also NOT BANCCRUPT as is the case for the USA where the latter only survives by STEALING the WEALTH of OTHER NATIONS including those of EUROPE
      and as a Nation IS the MAIN REASON behind the current European financial Woes .. by DEFRAUDING European Capital into buying WORTHLESS Ameriacan Financial debt instruments

      SO ..I say ... NO ... to an "Atlantic Century " .. we already have tried that .. to our DETRIMONY ... I prefer a EURASIAN Century .. which for any EUROPEAN who still can THINK ... is the only future worth considering

    4. CommentedZsolt Hermann

      I really would like to believe in this fairy tale, as if it was true, it would bring good fortune to all, since in today's global, interconnected world if the main engines of growth, development found their direction and fuel again it would propel the whole system with them.
      Unfortunately though the fairy tale looks very much like the "Emperor's new clothes", and the truth is the emperor already looks naked if we look at the picture honestly.
      The "rising" in the US, and "stabilization" in Europe only happens on paper, and in those high powered meetings, nothing of it is felt on the streets, or in the homes of the actual population living in those countries.
      Unemployment, especially youth unemployment is rising, living costs, social inequality is rising, the previous social net supporting the weaker layers is disappearing, the debt burden is burying layer after layer, people in general are more depressed and empty than ever, and there is absolutely no sign of any change from their point of view.
      Only the cash flow, the financial infrastructure that is dealt with, but it has very little relevance to people, and it is cosmetic in nature, unable to change the fundamental system crisis.
      The significance of the "mighty military force" of the west is also becoming irrelevant in the age of long range missiles, defense shields, remote control drones and virtual warfare, none of the recent western lead wars, putting troops on the ground achieved any meaningful success, in truth they were all failures.
      The "newly found energy independence" has only relevance in terms of the over consumption, over production, constant proliferation, exploitative economic model, but this model is unsustainable and is collapsing, in truth for a normal, modern human life we do not need even the fraction of the energy we consume today, thus this hysteria about energy independence will lose its meaning very soon.
      In short there is no "coming Atlantic century" for multiple reasons. Most of the "signs" the article is based on are irrelevant, meaningless, moreover the world is a single, interconnected and interdependent network, either all of us pull through, by fundamental changes to our lifestyle and interrelations, mutually working together complementing each other, or we all sink deeper ad deeper into crisis until the suffering will force us to change.

    5. CommentedAndré Rebentisch

      Exactly that phrasing of Mme Clinton was quite alarming. As well as the patronizing tone of Mr. Biden. The phrase "remains" indicates withdrawal in the defense context.

    6. CommentedRobert Upshaw

      The growing trade and energy routes are on the Indian and Pacific rim. That's where the action is. R. Kaplan detailed this in his book Monsoon. Europe's position is the weakest of all.


    7. CommentedAvraam Dectis

      "have the largest military force in the world by many multiples"


      It should be noted that while these Democracies are well armed, the USA, at least, is reduced to allowing large stalker gangs to openly poison people, some of whom have been openly poisoned for over 15 years while the police and government just watched.

      A Democracy that cannot use its millions of men under arms to protect its citizens or arrest its worst criminals is a Democracy in name only. It is really just a figurehead providing a pleasant illusion to cover up the fact that it is really a fractured entity with each splinter operating under rules and penalties that are unwritten and enforced by fear.

      See "gang staking" if any of this is news to you.

      In the USA, crime pays.

    8. CommentedProcyon Mukherjee

      This essay is in sharp contrast to the forging reality that the center of gravity of the world's economic engine is slowly but steadily moving East.

      The gas bonanza has not seen gasoline prices move South, which is what the fundamental fallacy is that is yet to be explained, although natural gas prices have continued to move in the downward trajectory.

        CommentedAvraam Dectis

        There is conjecture that speculation is artificially supporting energy prices.

    9. CommentedAndrés Vallejo

      Buttressing all this optimism is only possible by relegating what should be our most pressing concern to a passing comment: "As an extra bonus, the higher US proportion of gas use has reduced US carbon emissions to 1992 levels." Even this cheer should be handled with care, as this interesting note explains:

    10. CommentedPaul A. Myers

      The US will be completing a transition in Obama's second term from being the biggest dumb government in the world under Bush to a pretty sensible steward of a very strong private-sector dominated US economy. All the job growth in the US since 2009 -- five million jobs -- has been in the private sector. The US has rebalanced towards a more productive economy in a very strong way.

      A truly enhanced free trade area with Europe would integrate half the world's economy and probably contribute towards many European countries moving towards a more productive future.

      So there are two win-wins out there for Europe: integrate within Europe and integrate across and around the Atlantic.

    11. CommentedStepan February

      There has been lots of cheerleading by the Syndicate recently. First the rise of the robots, now this. Its like our public intellectuals are not the drivers of our destiny but just the headlights illuminating the next few yards of the road.

    12. CommentedMike Chu

      Isn't the West bankrupt and East the creditors? Or, does Biden know something we don't.

    13. CommentedShane Beck

      Demographics say otherwise- both the US and Europe have ageing populations, which do not bode well in welfare states. Of course Russia, China and Japan have the same problem so it will be interesting to see how each nation copes....

    14. CommentedJosé Luiz Sarmento Ferreira

      Maybe so, but the European Union is the only political entity in the World to have made Keynesian economic policies illegal. Member-States can be fined heavily for not inscribing anti-Keynesian rules into their Constitutions. This blatant ideological bias doesn't bode well either for Europe or for its partners.