Why the European Parliament Elections Are Important to the United States
May 23, 2019
Between May 23 and May 26, the 508 million citizens of the European Union (or at least those old enough to vote) will go to the polls to elect their representatives to the European Parliament (EP) for the next five years. Although it is unclear exactly how many citizens will participate in the election (some countries have registered historically low turnout for EU elections), the direct election of the 751 EP representatives is an impressive democratic moment in the European Union’s political life.
Once seated, the European Parliament will confirm the next European Commission president (typically from the political group that received the most votes) and 27 commissioners and vice presidents (one from each EU member state), as well as critical positions such as the president of the European Central Bank. It will take several weeks for the election to yield its full results—political groups will be formed, backroom deals will be made for the selection of the next Commission and parliament presidents—but initial returns will show whether Euroskeptic forces can disrupt the European Union’s institutional proceedings or alter its stances on policies of interest to the United States—or whether pro-EU forces will manage to retain their hold on the parliament for the next five years.
Beyond internal European dynamics, these elections matter for the United States as well. The European Union is a strategic partner for the United States and one of its greatest foreign policy successes. The transatlantic economy is the largest investment relationship and the most integrated economic zone in the world. This economy generates $5.5 trillion in commercial sales every year, while companies on both sides of the Atlantic (including foreign affiliates) directly employ almost 10 million people. A strong, stable, prosperous, and democratic European Union is important to the United States from both a political and an economic standpoint.
The European Parliament must ratify all trade agreements negotiated by the Commission and has an advisory role over the Commission’s trade negotiating mandate. The new parliament will thus have influence over a potential future U.S.-EU trade agreement. Parliamentarians recently voted against the Commission’s mandate on U.S. trade talks in March 2019. Although not binding, the decision does not bode well for and underscores growing opposition to a transatlantic agreement. Last summer, European Commission President Jean-Claude Juncker and President Trump’s agreed to eliminate tariffs on industrial products (existing tariffs are already quite low) and to work toward greater harmony on regulatory standards (where there are great costs to different safety requirements, etc.). Trade talks have continued despite U.S.-imposed tariffs on European steel and aluminum and EU counter-tariffs on U.S. products. The European Union has substantially increased its purchase of U.S. soybeans and liquified natural gas (LNG), but disagreement remains over the inclusion of agricultural products in the final agreement, which the United States wants to include but EU negotiators have left out—as agreed in the July 2018 statement.
There are different views about international trade among the parliamentary groups and member states of the European Union. Germany supports a trade agreement with the United States, while France largely opposes it. Some extreme parties strongly oppose global trade as a whole, while other parties have specific demands regarding environmental and worker protections. Agriculture is likely to be a significant sticking point in the trade relationship, given the domestic importance of issues like subsidies, genetically modified organisms, and geographic indicators. And despite the positive news that EU members are cumulatively purchasing more U.S. LNG, the Trump administration and the U.S. Congress have threatened to sanction the Nord Stream 2 gas pipeline, which would increase Europe’s energy dependency on Russia. Finally, President Trump’s decision to delay the possible imposition of automobile tariffs for six months is a welcome respite in the trade relationship, but it will only extend the period of uncertainty that hangs over a potential U.S.-EU trade agreement.
Privacy and Digital Innovation
While the U.S.-EU trade issues have largely focused on goods, transatlantic trade in services is the main area of economic growth for both sides, particularly digital services. Europe and North America together produce 75 percent of the world’s digital content, and in 2017, the United States exported over $200 billion in digitally enabled services to Europe. The United States is also the European Union’s largest consumer of digitally enabled services outside of the bloc. Yet these extensive digital trade flows could be affected by divergent approaches to data protection and data privacy issues. The current agreement governing the rules for U.S. and EU companies that trade in data across the Atlantic, the EU-U.S. Privacy Shield, covers nearly 4,000 companies and must undergo an annual review (last completed in October 2018). Yet these extensive digital trade flows could be affected by divergent approaches to data. The European Parliament has called for the suspension of the agreement so long as it is not in compliance with the General Data Protection Regulation (GDPR), and until the United States appoints a permanent privacy ombudsman as required by the Privacy Shield agreement. (A company found to be in violation of the GDPR could be fined up to 4 percent of its worldwide annual revenue for the prior fiscal year.)
Other areas of the digital relationship could be affected by a new parliament. The European Union is developing new privacy rules, particularly the ePrivacy Regulation, as part of the completion of the Digital Single Market. While the parliament has asked for a more stringent approach to data and privacy (more so than the Council, representing the 28 member states), industry groups have warned the regulation is overly strict, will stifle innovation, and would cost U.S. businesses such as Facebook or Google billions of euros annually. Once the relevant ministers from the 28 member states agree on their own negotiating position for the ePrivacy Regulation, the new parliament will negotiate an agreement with them for the final form of this regulation. The composition of the new parliament and its views on data privacy and protection could dramatically impact U.S. firms and data flows across the Atlantic.
China and Economic Competition
Technology transfer and data protection loom large over the U.S.-EU relationship and has crystallized in the debate over Huawei and China’s growing economic presence in Europe. The most productive way to address these challenges would be a united transatlantic front against China’s expanding economic influence and its predatory economic practices, but this has been difficult to reach for a variety of reasons. The European Union’s official view on China is that of a “systemic rival,” but EU members have diverging attitudes toward Chinese investment. For example, Italy recently joined the Belt and Road Initiative, the first G7 member to do so, while 11 EU member states participate in the “16+1” forum. The European Parliament has a role to play in what agreements are signed between the European Union and China, and what restrictive measures are implemented to try and stem China’s economic expansion in Europe. The body was key in passing a new foreign investment screening regulation that entered into force in April 2019 and is expected to be fully enforced by October 2020. The European Parliament would also need to ratify the investment agreement that is being negotiated between the Commission and China, should it be finalized (negotiations started in 2012).
Security and Defense
The level of defense spending of European members of the North Atlantic Treaty Organization (NATO) has been a major preoccupation for many U.S. administrations, but the Trump administration has particularly emphasized this aspect of the transatlantic relationship. While the European Parliament traditionally has a limited role in direct policymaking around issues of defense and security, it approves the EU budget that allocates resources to issues of foreign and security policy (Common Security and Defence Policy or CSDP). The next parliament will help define the level of ambition for important new EU defense initiatives such as the European Defence Fund (EDF, which aims to garner €13 billion for the 2021-2027 budget period) to finance joint defense industrial projects and the Permanent Structured Cooperation (PESCO), which brings together 25 EU members to collaborate on 34 identified projects. An ambitious level of funding for these projects would mean more resources devoted to European defense, a demand the United States has voiced for years. The United States has indeed recently expressed concerns that U.S. firms will not be able to participate in EU-related defense procurements (under EDF funding) and has restated its long-held worries that EU efforts would compete with NATO aims. The European Union has issued statements that have made clear that the Union seeks coherence between the two sides, not competition or duplication, and that these projects would only strengthen EU defense capabilities in a way that could serve NATO’s goals.
Should Euroskeptic parties gain strength in the new parliament, their view of defense issues as a national rather than an EU concern could reduce EU defense spending. (Far-left parties tend to view defense expenditures as an unnecessary expense altogether.) This would be an impediment to needed EU resources on enhancing defense capabilities, NATO needs, and border and maritime security (the Italian government has recently suspended an EU maritime mission in the Mediterranean in opposition to its rescue mandate), all of which are line with centrist parties’ priorities. (“A Europe that protects” is the motto of the center-right political group.)
Populism, Illiberalism, and What It Means for Democracy
There will be a rush to over-interpret the results of these elections, but caution is warranted. These are, after all, 28 separate elections that are heavily influenced by national politics and charismatic figures—but will also be decided on pan-European issues such as migration and the future of European integration. Each country has different voting thresholds for parties to enter the parliament, and some have none, while voter turnout will also affect results. The elections will likely underscore a continuation of current European political trends: the weakening of the traditional center-left and center-right parties and the fragmentation of the entire political spectrum. The parliament will struggle to form unwieldy multi-party coalitions that may only agree on discrete sets of issues.
There has been much media focus on the rise of the European “alt-right” and whether the joining of forces on the far-right will do well enough to challenge the three main center political groups. Matteo Salvini, the Italian deputy prime minister and leader of the far-right League party, has formed an alliance with like-minded parties from other EU member states with the encouragement of former White House adviser Steve Bannon. The elections may show a “Brexit effect” whereby support for the European Union rises and will be translated into seats for centrist Green and liberal parties that may counter-balance the rise of far-right Euroskeptics. The political stakes will be particularly high for French president Emmanuel Macron whose ambitious vision of a “European Renaissance” will be directly challenged by Marine Le Pen, his 2017 presidential challenger, and her French far-right party National Rally.
The European Parliament elections risk producing a messy and confusing outcome. An extreme fragmentation scenario will negatively impact momentum for and opportunities to enact new legislative initiatives or reforms. Pro-European forces may outnumber anti-EU and Euroskeptic voices in the parliament, but a rise in the latter will make any policy effort more difficult. It will also give an unwelcome confidence boost to the forces of “illiberal” democracy and neo-authoritarianism represented by Hungary’s Viktor Orban, France’s Marine Le Pen, and Italy’s Matteo Salvini. Complicated coalition-building on budget, European integration, and foreign investment screening issues (e.g., China) will be particularly fraught.
The avowed Orban-Salvini EU strategy is to change the European Union from within and, thus far, the Union has proven mostly powerless to stem their anti-democratic behavior and destructive strategy, making the European Parliament elections very important indeed.
Heather A. Conley is senior vice president for Europe, Eurasia, and the Arctic and director of the Europe Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Donatienne Ruy is a research associate with the CSIS Europe Program.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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