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European Commission President Ursula von der Leyen recently came to Washington, D.C., hoping to soften the impact of the Inflation Reduction Act (IRA), which has strained U.S.-European Union economic relations and looks ready to spark a green tax subsidy race to the bottom.
In a White House meeting, Presidents Biden and von der Leyen think they arrived at a solution, there’s just one catch: It would require undermining the authority of Congress and EU member states at once, casting the entire process into more public scrutiny.
Not only is that not a winning strategy, it also risks exporting the EU’s long-built democratic deficit across the Atlantic.
How the White House and the European Commission proceed from here will show China how united the West is about challenging its economy democratically.
In 2013, on the heels of the Great Recession, the European Union and the United States launched the Transatlantic Trade and Investment Partnership (T-TIP) negotiations. The goal was to boost economic growth and put trade enforcement power back in Western capitals rather than the World Trade Organization (WTO).
The deal was designed to harmonize standards and leverage the bloc’s joint market power to force non-market economies like China to conform. Negotiations hit a roadblock in 2016 due to the European public’s skepticism over corporate America’s food and environmental standards and the election of President Trump.
Despite not reaching a T-TIP deal, President Obama should be praised for pursuing a bipartisan approach. Congress, after all, is the branch with the constitutional authority to regulate commerce with foreign nations.
