Foreign and Security Policy

Why the Timing is Right for a EU-US Summit this Spring

By Rick Minor

The Juncker Commission in Perspective at the End of its Term

As his term as Commission President of the European Union comes to an end later this year, Jean Claude Juncker still has time to add to his European achievements. Juncker should propose to the Trump Administration a mini-summit that could take place in the Spring, April preferred, but he must move quickly to get it in the calendar. The summit could, at the least, set the stage for more meaningful interaction with the US administration before and after European Parliamentary elections in late May.  Following those elections, the campaign to choose Juncker’s successor will begin in earnest. The summit agenda could be modest but should include trade, tax, and national security issues, with or without Brexit in mind.  In any case, the US administration and the EU Commission will both need to adjust to the UK no longer being part of the EU.

When Juncker was chosen by European party vote President of the Commission, the head of the executive arm of the European Union, he was arguably the most qualified candidate who had ever taken the office. During his presidency, he has kept a low public profile but through the mandates of his Commissioners has made measurable progress on the priorities in his 2014 campaign platform. Unlike his predecessor, Juncker has generously yielded the Commission press spotlight to European Council President Donald Tusk, even though the Council President is a recently created, largely ceremonial position. This is both a gesture to Tusk, the one-time President of Poland, one of the key Member States in the east, and to enhancing the relevance of the Council President position itself, a position Juncker once sought. During his Commission term, President Juncker has found less opportunity to leverage his Atlanticist credentials, however, with the exception of his July 25, 2018 meeting in the White House with President Trump, their first and only meeting to date. At the July meeting, Juncker seemed to capture the attention and respect of President Trump in alleviating the US threat to impose tariffs on EU goods, especially higher tariffs on European automotive imports.

Juncker announced early on that he would not seek a second term as Commission President. That means that we already know today there will be a longer transition period between Commissions than would be the case had Juncker sought and achieved a second five-year term. Thus, the strategic opportunity for a summit this spring would be to advance discussions on these key topics and stabilize the US-EU working relationship before the lag created by an entirely newly appointed Commission taking office in the fall. Moreover, by the time the next Commission gets settled next year, the US administration will likely be even more focused on the 2020 US presidential election.

Jean Claude Juncker: European and Atlanticist

In Europe, Juncker is seen as the last of the generation of European statesmen (that must include German Chancellor Helmut Kohl, French President Francois Mitterand, and EU Commission President Jacques Delors) who were responsible for an unprecedented period of harmony within the European Union. During that period, the Maastricht Treaty was agreed which, among other things, launched the Euro, led to the Schengen Agreement which eliminated border controls for most of the Member States, and accelerated a significant increase in the size of the EU with the addition of former Soviet states, thereby expanding sustainable peace and prosperity eastward.

Before he became European Commission President in 2014, Juncker served 18 years as Prime Minister of Luxembourg (interestingly, he replaced the then Prime Minister Jacques Santer when Santer became President of the European Commission). As Prime Minister, Juncker was a key European ally of every US administration from Bill Clinton to Barack Obama, and his administration supported the US behind the scenes during the second Gulf War. As Finance Minister and later Prime Minister of Luxembourg, he was known in Brussels as a successful, behind the scenes political negotiator on European issues. Juncker’s credibility with European leaders derived from a deep knowledge of subject matter, cultural political intelligence, and fluency in the German, French and English languages in addition to his native Luxemburgisch. His personal relationships to German and French leaders as a result of his lengthy service as Prime Minister was also an advantage in knowing how to get things done with those leaders. Finally, as the head of Luxembourg, a small but fiscally significant member state, he could spend much of his time in office on European issues. Juncker cleverly served as both Finance Minister and Prime Minister for most of his premiership. This dual state role allowed him to represent Luxembourg on both the Council of State and the Council of Finance Ministers, the two most powerful member state executive decision-making bodies in the EU.

What a Summit Agenda Should Look Like

On trade, the EU needs to at least offer a timetable to resolving the dispute over the level of agricultural imports from the US to Europe and, as needed, set expectations that there is not likely to be any substantive agreement before a new Commission is in place. US business groups and the US Congress have complained publicly that the EU Commission deliberately targeted large US digital companies in connection with state aid investigations and digital tax legislative initiatives under Juncker. Recent correspondence from the Senate Finance Committee to the US Secretary of Treasury has reignited the threat of a US-EU tax war.  President Juncker is as knowledgeable about the evolution of the US digital revolution in Europe as any European politician given Luxembourg’s strategy, through active marketing and fiscal incentives, to attract and retain significant direct US investment in Luxembourg while he was Luxembourg Prime Minister.  For an encore, Juncker set as a priority of his Commission the development of multiple legislative proposals to reform the kinds of tax planning opportunities that were used to his home country’s economic advantage under his premiership.

He should be able to articulate why the EU and the US have differences in how to modify the taxation rules for digital business models and why the EU’s actions are legitimate and necessary from an EU perspective for the purpose of principled policy discussions going forward. This is not a difference with the US to leave to the next Commission to solve. On national security, the EU will want to share lessons learned from the success of the much anticipated 2018 launch of the upgraded European privacy law legislation, the GDPR. The GDPR was greeted with skepticism by the US from the time the first draft of the legislation was published in 2012. Now, less than a year after the GDPR took effect, there is serious discussion in the US Congress and the US business community regarding a reform of the fragmented US approach to privacy law along the lines of what the EU has done. As predicted, GDPR is becoming a template for a privacy law reform movement globally. Greater attention is being given to potential security threats from Chinese industry on the cybersecurity front and whether there is a growing urgency for the EU,the US, and the other usual allies to craft a concerted approach to deal with such a threat.

The Dynamics of the EU-US-GE Relationship post-Brexit

A Juncker summit may also remind the US what its relations with the EU Commission will be like without the UK in the EU. President Juncker can demonstrate to the US the value of directly engaging the EU, and not always through public rhetoric, on issues of common interest, as he understands the US as well as any European leader today.  At the same time, as the UK exits the EU, the US will want to find an ally, like it had in the UK that can help it navigate an increasingly important EU relationship. Among the potential candidate countries, Germany is the most likely successor to the UK for the key EU partner of the US. There are many Atlanticists in the US and in Germany who would support the restoration of this key alliance that has a long record of success forged during the threat and intensity of the Cold War. Jean Claude Juncker, the Luxembourg Atlanticist, could help make this happen before he leaves the European political stage.

Rick Minor, a US lawyer with Womble Bond Dickinson, advised the Luxembourg Government on fiscal policy and GDPR issues when President Juncker was Prime Minister.

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