The EU must stand up to Trump

On July 27, the United States (US) and the European Union (EU) announced aprelim-inary trade and investment deal in Turnberry, Scotland. But nothing was actually signed, and even ifit had been, it would not havebeen worth the paper it was written on.

- JOSEPH E STIGLITZ

After all, US President Donald Trump did sign a formal trade agreement with Canada and Mexico duringhisfirstterm, onlytotear it up as soon as he returned to office.

Any agreement with Trump therefore must be regarded as, at best, a temporary truce. Itwill hold only until America’s capriciousleadersees or hearssomeone orsomethingthatmakesa new whim official policy. Still, itis worth remembering the specifics of the Turnberry deal, because some were quite peculiar. Given that Europe has 30 per centmore people and onlyaslightlysmaller economy (in purchasing powerterms) than the US, standard bargaining theory would imply that any deal would be roughly symmetrical. Instead, itwas entirely one-sided.

Inaddition tothe USimposingunfairtariffs on European imports, Europe committed itselfto investing in the US and purchasing USenergy.