Biden-Macron Summit and US-EU relations: Biden's green subsidy plan deviates from the neoliberal gospel as practiced by the EU

French President Emmanuel Macron was in Washington for an official state visit with President Joe Biden. The White House released a Joint Statement text from the meeting.

It struck this rhetorical note, “France is the United States’ oldest ally, and while our relationship is rooted in history, it is oriented squarely toward the future.” Sentimental statements like this are standard diplomatic rhetoric.

But the “squarely toward the future” part really means: what happened in US-French relations 250 years ago doesn’t actually matter for what the two nations’ relationship is today. The US would have gone to war with France in the latter part of the 1860s if their puppet regime in Mexico appeared likely to survive. But that actually has little to do with US-France relations in 2022.

That’s why I was surprised to see Heather Cox Richardson’s downright sentimental account of the meeting on her Facebook account. She focused on this aspect of the statement (02/12/2022):

The leaders reaffirmed that France and the United States have a historic past and emphasized that our shared past is the basis for shaping a joint future in which the old allies work to defend the rules-based international order now under attack from autocrats who hope to dominate their neighbors with force.

In 1776, what is today the nation of Ukraine was controlled by Russia and Poland. Times change. And international alliances change, for sure.

Macron vs. Biden’s (kinda-sorta) Green New Deal

Even the more interesting formal diplomatic statements like this one are typically dull-as-dirt in their style. That’s diplomacy.

But the most urgent disagreement of this summit was Macron’s criticisms of the Biden Administration’s subventions (as EU jargon tends to call them) that are part of the Green New Deal aspects of his Inflation Reduction Act.

[W]hen the host [Biden] is asked at the press conference after a three-hour conversation behind closed doors how the currently biggest problem in the transatlantic relationship can be eliminated, he is extremely buttoned up. "I'm confident," Biden replies curtly. Some journalists in the Christmas-decorated East Room of the White House laugh because they think it’s a pause for effect. But Biden insists, "That's my answer." That's all he wants to say.

Thus, after the meeting between the two heads of government, it remains unclear whether there has been any substantial rapprochement in the dispute over America's industrial policy. The stumbling block is the Biden Administration's $370 billion climate and social package, which aims to advance the energy transition, while at the same time reducing US dependence on foreign supply chains and creating jobs at home. The huge state subsidies should therefore only exist if the components for electric cars, batteries or other renewable energy projects were manufactured in the USA – a massive distortion of competition to the detriment of Europeans.

... "This is super-aggressive for our economy," [Macron] complained undiplomatically shortly after his arrival at a lunch with American politicians and entrepreneurs: "Maybe you can solve their problems this way, but you increase mine." [my emphasis] (Karl Doemens, Macron bei Biden: Viel Pomp und drei knappe Wörter Standard 01.12.2022)

When (serious) commentators talk about Biden being “left” of Obama in some ways, this is a big part of what they mean. Neoliberal globalization dogma holds such subsidies to be a departure from the economic ideal. The massive role played by government in socialist China in their economy is a big issue in the China-EU relationship, as well.

That term “industrial policy” was a slogan of the Democratic Party left in the 1980s, referring to the need for the government to actively steer the economy macroeconomically through regulations, tax policy, and subsidies. (Anshu Siripurap & Noah Berman, Is Industrial Policy Making a Comeback? CFR 11/18/2022) It was a left-liberal version of neoliberalism, trying to extend basic New Deal-Great Society principles into a more deregulated environment. It dropped out of the Democratic political vocabulary years ago. But it’s the right description for the measures Macron is questioning. And it does represent a more “left” position than Obama took in the TTIP (Transatlantic Trade and Investment Partnership) negotiations which never overcame EU reservations.

This doesn’t mean that the idea of a new US-EU treaty along the lines of TTIP is entirely defunct. Bad ideas on which international corporations stand to make major profits have a remarkably persistent character.

European strategic autonomy: the US doesn’t want it

Here are some other currently relevant points:

The Presidents recognize the importance of a stronger and more capable European defense that contributes positively to transatlantic and global security and is complementary to and interoperable with NATO.

“Complementary to” NATO means that any European Security Force is expected to subordinate itself to NATO priorities, i.e., US policies. We saw during the Cheney-Bush Administration how that can work. (Elizabeth Pond,  Friendly Fire: The Near-Death of the Transatlantic Alliance 2004) The Democratic version may be friendlier in its rhetoric than the Cheney-Bush version, but the basic position is the same.

Ever since the European Union was established in its current form by the Maastricht Treaty of 1992, US policy has encouraged the expansion of the EU as beneficial for solidifying the alliance with the central and eastern European nations.

But the US preference since that time has been for an EU that is broad but relatively weak, i.e., unable to pursue geostrategic goals that may conflict with those of the US. This has been an enduring of the now-facing “unipolar moment” in which the US was the un

Even though that moment has now passed with the rise of China’s international clout, the US is still pursuing the goal of preventing the rise of any “peer competitor” to the US. And that includes the EU, all sentimental historical recollections aside.

At the same time, the Russia-Ukraine War and the shift of American focus toward containing China creates new pressure for more diplomatic and military cohesion by the EU. Anatol Lieven remarks (Beyond the cameras, Macron-Biden meeting tougher than it looks Responsible Statecraft 12/01/2022):

European militaries are to a considerable extent irrelevant as far as present U.S. strategy is concerned. Russia has neither the ability nor the will to invade NATO, and there appears to be no chance of European governments sending their soldiers to fight in Ukraine.

Ukraine policy

No obvious surprises here. “[Biden and Macron] reaffirm their nations’ continued support for Ukraine’s defense of its sovereignty and territorial integrity, including the provision of political, security, humanitarian, and economic assistance to Ukraine for as long as it takes.“

No mention of such priorities that have been mentioned publicly by the Biden Administration this year as regime change in Moscow or using a prolonged war to degrade Russia’s military capabilities in a major way. Those aims would be significantly broader that securing “sovereignty and territorial integrity“ of Ukraine in its recognized international borders.

But it also includes this goal: “[Biden and Macron] also reiterate their steadfast resolve to hold Russia to account for widely documented atrocities and war crimes,“ and specifically mentions the International Criminal Court as one of the mechanisms. This in itself isn’t new, and actually is required by international law. But the Russia-Ukraine War is not going to end with Russia agreeing to send Putin and his generals to be tried for war crimes in the Hague.

This is one of constant dilemmas of a liberal-interventionist foreign policy. War criminal or not, Vladimir Putin is head of the Russia government (Biden 'prepared to sit down with Putin' if Russian president wants to end the Ukraine war Euronews 12/02/2022):

While speaking to journalists at the event, Biden also said that he was open to dialogue with Russian President Vladimir Putin, provided he made concrete plans to end his aggression against Ukraine. 

"I'm prepared to speak with Putin if in fact there is an interest in him deciding he's looking for a way to end the war," Biden said. "If that's the case, in consultation with my French and my NATO friends, I'll be happy to sit down with Putin to see what he wants, has in mind. He hasn't done that yet."

China policy

The Biden Administration has recently been giving new emphasis to the idea of NATO playing a bigger role in militarily containing China. And the Joint Statement reflects that:

The United States and France, two nations of the Indo-Pacific, are strengthening their partnership in the Indo-Pacific region to advance prosperity, security, and shared values based on a rules-based international order, transparent governance, fair economic practices, and respect for international law, including freedom of navigation. The United States and France intend to expand their regional diplomatic, development, and economic engagement with a view to building resilience in the Pacific Islands. They also intend to increase practical coordination in the region on maritime security. The United States intends to increase its support and material contributions to air and maritime deployments conducted by France and other European nations in the region. [my emphasis]

The notion of France as an “Indo-Pacific” nation is one that deserves reflection. But there are remnants of the French Empire in the Pacific that give them some thin claim to that status. (Céline Pajone, France: the leading European power in the Indo-Pacific IFRI Sept. 2021) But in light of the fact that the EU countries in the best of cases will be in a significantly defensive and adversarial relationship to Russia for at least a couple of decades now, the idea of French, Estonian, and Polish forces patrolling the Taiwan Straits doesn’t necessarily sound like the best idea.

But, as Lieven also notes, “As for European military deployments against China, it is already clear that these will remain purely symbolic.“ Even so, any EU military involvement in NATO actions in the Pacific carries not only political and financial ones, but also military ones.

The “rules-based international order”

The concept of a “rules-based international order” in the Joint Statement is a concept the US has been promoting for a while. Notice here that this carefully worded diplomatic document speaks of that concept as a separate one from “respect for international law.” Whose rules it is on which the order is based is a critical one.

As Über-Realist Stephen Walt wrote last year (China Wants a ‘Rules-Based International Order,’Too Foreign Policy 03/31/2021), there are many versions of a “rules-based” system. “The differences between the American and Chinese conceptions are relatively straightforward,” in his view. The US favors a “multilateral” system that gives particular emphasis to American preferences, including liberal values but by no means restricted to them. “By contrast, China favors a more Westphalian conception of order, one where state sovereignty and noninterference are paramount and liberal notions of individual rights are downplayed if not entirely dismissed.”