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  Opinion: Globalization Is Good for Europe

Opinion Globalization Is Good for Europe

By Peter Mandelson

Part 3: Projectionism Instead of Protectionism

This suggests that although Europeans are proud of their social models they ought not to be complacent. While most European social models meet some of these criteria, many still strengthen the position of labor market insiders over outsiders, make it difficult to expand businesses, and provide little encouragement for women or older people to enter or remain in the workforce. It is too easy for some to misrepresent the argument for strong activist states as an argument for direct market controls, import barriers, and national ownership or direction of industry. The state has a fundamental role in European society in ensuring that greater economic change does not imply greater insecurity. However, protective states do not have to be protectionist ones.

The European Union in the Global Age

Rethinking government in Europe will need to go further than national political systems. It seems inevitable that as we respond to globalization the nature of governance likely to change. With our more atomized social lives, a greater degree of countervailing local community government makes obvious sense. Because we are no longer building communities on static local identities defined by birth and origin, we should be investing more in building them through local political engagement and public participation. Localism is not the rejection of globalization. It is a rational response and counterpart to it. But we must also recognize the logic of moving some of our government upwards and outwards. This is where the utility of the European Union becomes compelling. At age 50, the European Union is making the transition from an inward-looking political confederation to an outward-looking global actor. It is the vital multiplier of European influence that allows Europeans to engage with, and shape, globalization.

This capacity will become crucial as the global political landscape is reshaped in the years ahead. The next decade will see multilateral institutions like the WTO, the United Nations, and the Bretton Woods architecture adapted to the changing realities of Asian and Latin American power. One of the fundamental challenges of the next decade for Europe and the United States, which have underwritten these institutions for 60 years, will be to engage the rising powers in their maintenance and credibility. The rising powers have a strong incentive in seeing their interests defended through a rules-based multilateral system, but they will only accept custody of this system if they feel that its governance reflects their growing power. If emerging economies are currently skeptical of institutions like the G-8, the UN Security Council and the International Monetary Fund it is because these mechanisms remain essentially rooted in the "Atlantic" postwar world.

Accepting that this will have to change may diminish the relative influence of the Atlantic world, but only in a way that reflects a deeper reality. Moreover, anchoring the rising powers in a liberal, rules-based multilateral system more evenly shares the burden of managing that system. Institutions like the WTO also provide a way of holding the rising powers to their international commitments in trade and other areas. Sustained engagement with the global economy will inevitably apply continued pressure for economic and political reform.

It is not just this wider shift in which Europe needs a voice. The next decade will see African development politics reshaped by the growing influence and engagement of China. The same debate about development models will take place in societies across the Middle East and Central Asia. The pressure for international solutions to climate change and energy and water security will increase. These are realignments and debates in which Europe has profound and legitimate interests. To be present in any of them, and to keep others engaged, it will be necessary for Europeans to speak as a single union. To negotiate effectively with continental partners on the scale of China, Russia, or the United States, we need a continental voice of our own. As the largest export market for more than a hundred countries in the global economy the European Union has a huge capacity to influence global standards on everything from carbon emissions and green technology to food and product safety. But to set those standards at a European level, and to then promote them internationally, we need an effective European Union.

The conception of the European Union as a protected political and economic community might have made limited sense when Europe was rebuilding its industrial capacity and food production from scratch and most of the world's markets were cut off by autarky. It makes no sense now. Globalization will put intense pressure on any insular notion of Europeanism that is not focused on effective economic and political projection in the world. An effective European Union needs efficient European institutions at its center, which is why the Lisbon reform treaty matters. If ratified, the treaty will equip the European Union's institutions to represent Europeans more effectively and coherently in the world. It is not a fundamental reform, but it is an essential one. It is not a blind leap into deeper integration: where it proposes further integration it does so as a means of enabling the European Union to act more effectively in the collective interest where European states have agreed to do so -- a projectionist Europe rather than a protectionist one.

An Opportunity for Europe

Europeans have a much greater capacity to shape and benefit from globalization and the resurgence of the East and South than they often recognize. While they can no longer dictate the contours of global economic change, Europeans retain the ability to shape it in a way that reflects their interests and values. The flip side of this power, at least while the developing world remains a weak source of domestic demand and dependent on export-led growth, is Europe's ability to significantly reverse high levels of economic internationalism. Otherwise, if a retreat from globalization were mirrored by a similar retreat in the United States, Europe's political or economic interests would suffer.

Europe is not a "submerging" economy or society. While this new political phase of globalization will test European nerves, it is also an opportunity for a more equitable global order and an effective redistribution of the burdens of managing the multilateral system. Europeans should grasp it. In order to do that they need to preserve their commitment to economic internationalism. That will only be possible if European governments act pragmatically and effectively to address the insecurity that Europeans feel about a more open global order by redesigning the European social compact for the 21st century and ensuring that the benefits of engagement with the global economy are not just maximized but equitably shared. This will only be possible if Europeans act and speak as one through a renewed and effective European Union.

Peter Mandelson is the former EU commissioner for external trade and currently serves as Britain's Business Secretary.

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