European Union's New Envoy Stavros Lambrinidis says Bloc Will nWeather Transatlantic Storm by Anna Gawel

European Union’s New Envoy Says Bloc Will Weather Transatlantic Storm

By Anna Gawel
Uploaded on May 31, 2019

  

We spoke to Stavros Lambrinidis, the European Union’s new ambassador in Washington, just hours after he presented his credentials to President Trump on April 8 — a ceremony he described as a “symbolic milestone” for anyone in politics or diplomacy.

But there was symbolism of a different kind a few months earlier at the funeral of former President George H.W. Bush when Lambrinidis’s predecessor, David O’Sullivan, was unceremoniously relegated to the back of the line when the list of ambassadors was called out.

Why was O’Sullivan’s name called last when protocol dictated that the order be based on how long an ambassador has served? Because earlier, the Trump administration had downgraded the diplomatic status of the EU Delegation to the U.S. — only it didn’t bother to tell the EU.

The quiet snub spoke volumes about the frayed state of transatlantic relations. The irony was that it was done with little fanfare, whereas Trump has taken every opportunity to very loudly and very publicly lambaste the EU — whether it’s on trade or defense spending.

But Lambrinidis, like his predecessor, seemed relatively unfazed by an incident that at any other time might have caused a major diplomatic rift. But these are not normal times, and today, insulting a critical ally — which is home to 500 million people and constitutes the world’s largest trading bloc — is just another day in Trump’s Washington.

“I think everyone was surprised. No one was expecting it,” Lambrinidis admitted. “But it became clear very quickly that it was a glitch that would be fixed and it was fixed, and I think that everyone is very happy about that,” he said, noting that the EU’s diplomatic status has been fully restored.

That’s good, because the veteran envoy will need all the tools at his disposal in the face of Trump’s transactional diplomacy, which is often conveyed via tweet at break-neck (and at times schizophrenic) speed.

But Lambrinidis — a former foreign minister of Greece who served as the EU’s human rights chief for seven years before coming to Washington — seems ready for the ride, rooted in the steadfast belief that the U.S. and EU can weather the current political turbulence on both sides of the Atlantic.

“We have more commonalities than points of contention,” he told us in a sweeping interview that touched on trade, China, NATO, Iran and populism.

Lambrinidis conceded that since Trump took office, the U.S. and EU have not seen eye to eye on many of those issues, but he said that ties have turned a corner and today, the transatlantic relationship is “stable and it is improving.”

A pivotal moment, he said, took place last July, when Trump met with EU Commission President Jean-Claude Juncker. Four months earlier, Trump announced that he was imposing steel and aluminum tariffs on a number of countries, including allies such as the EU, on the dubious grounds of national security. In response, the bloc slapped tariffs on iconic American brands such Levis jeans and bourbon. Juncker himself called the tit-for-tat tariffs “a stupid process.”

But the July meeting produced a trade détente, which Lambrinidis says is working.

“That was in many ways a historic meeting because they both highlighted how our economic relationship is unparalleled in the world, our values relationship is unparalleled in the world and how we have to work together, not just in a win-win relationship as they said for ourselves, but also to try to ensure that this world remains a peaceful one and an open one,” he said, adding that the EU “is implementing every one of its commitments” from that meeting.

This includes increasing exports of American liquefied national gas to the EU, which have skyrocketed by over 270 percent since that meeting.

This surge “hasn’t happened accidentally,” Lambrinidis said. “It has happened because Europe has been placing emphasis on diversifying its energy mix. We are investing billions in energy terminals in different parts of Europe.”

The Trade Impasse

But whether this will be enough to satisfy the man who once called the EU a “trade foe” and who has made eliminating trade deficits his personal mission remains to be seen.

Preliminary trade talks between the EU and U.S. have only just begun and major sticking points remain, notably over agriculture. (Trump and members of Congress want access to the EU’s coveted agricultural market, while the bloc is determined to keep the contentious issue off the table.) And in April, Trump threatened to levy tariffs on $11 billion in European goods in response to a long-running trade dispute over alleged EU aircraft subsidies.

But that is nothing compared to the president’s proverbial trump card: hitting European car imports with tariffs of up to 25 percent, which would wreak havoc on the global automotive market and spark a full-blown trade war.

Despite Trump’s repeated threats of automobile tariffs to force concessions from the EU, Lambrinidis insists there is little enthusiasm in the U.S. for another trade fight.

“I can tell you for a fact that I do not see on the part of U.S. interlocutors a great appetite to escalate trade tensions,” he said. “But don’t take it from me. Look at the testimonies of the U.S. auto industry itself, from trade unions, from car dealers, from politicians. There’s virtually no one who does not understand [that automotive tariffs] will be extremely harmful on the United States economy and also on the European economy.”

Lambrinidis’s intuition has proven right so far. With the president immersed in an increasingly heated trade showdown with China that has rattled markets, almost no one in Washington wants another trade battle — including Trump. In mid-May, he announced that he is giving the EU (and Japan) a six-month grace period to resolve disputes over their auto shipments before any tariffs kick in.

Trump also said he would lift his controversial tariffs on steel and aluminum imports from Canada and Mexico in a bid to push his renegotiated NAFTA deal through Congress.

Lambrinidis — who from 1988 and 1993 worked as an attorney at a D.C. law firm specializing in international trade and arbitration — cited those steel and aluminum tariffs as an example of misguided economic policy. Most economists agree that while such tariffs may benefit a narrow set of businesses, they hurt a wider array of downstream industries and raise prices for consumers.

“Frankly, all indications are that those tariffs did not result in some great overall economic boost to the U.S. economy or some great catastrophe elsewhere. This makes a lot of sense because our economies are so interrelated that something you can gain in one part of the economy, i.e. jobs, you could automatically lose in another part of the economy.”

He added: “I have found, in my discussions in these first two months, a very high realization of the fact that we are dependent on each other for jobs, for investments, frankly for food on our families’ tables and success in our communities.”

On that note, Lambrinidis said this interdependence is far deeper than many realize. He pointed out that 15 million jobs rely on the transatlantic alliance, 8 million of which are created by EU companies in the U.S. That 8 million, in fact, “is more jobs than the 10 largest employers in America create,” the ambassador noted. Together, the U.S. and EU represent half of the world’s GDP and form the largest bilateral trade and investment relationship in the world.

And while Trump largely focuses his ire on America’s trade deficit with the EU in terms of goods, which stood at $170 billion last year, the U.S. enjoyed a $60 billion trade surplus with the EU in services, which many economists say are just as important, if not more so, than manufactured goods.

“You see that not only are there a lot of manufacturing jobs in the U.S. created in the industrial heartland by European investments such as major car companies, but you see that thousands of jobs are created in tourism, in banking, in all those things that we call services, which are in many ways the huge economy of the future — as the U.S. itself has taught us,” the ambassador said, referring to the innovations of Silicon Valley.

“And then you have to look at foreign direct investment — in other words the money that U.S. companies make by opening subsidiaries in Europe, by buying companies in Europe, by doing work in Europe and vice versa,” he said. “All these generate money, all these generate jobs, all these generate wealth, and all these in the context of the European Union-United States relationship are unparalleled.

“More money is made by American companies investing in the EU today than anywhere else in the world. More direct investment — in other words jobs — comes to the U.S. from European Union companies than from any other country in the world,” he added. “China is being touted by some as allegedly the biggest new economy in the world. The foreign direct investment of China in this country is nowhere near that of the EU.”

The China Conundrum

While Chinese investment in the U.S. and in Europe may be overhyped, it’s grabbed the lion’s share of headlines and caused more than its fair share of handwringing in the West.

Lambrinidis said that one of the main reasons why the U.S. and EU should cooperate on trade is because they share the same concerns about China — namely “intellectual property theft, egregious industrial subsides and mandatory joint ventures,” he said.

Another shared grievance is China’s Belt and Road Initiative, an ambitious plan to invest $1 trillion in infrastructure projects in some 60 countries that U.S. officials have called a form of debt-trap diplomacy.

Belt and Road made its way to Europe recently when Italy inked a $2.8 billion package of deals with Beijing, becoming the first G7 nation to sign onto China’s vision of a modern-day Silk Road.

U.S. and EU officials worry about the security implications of China acquiring access to key sectors of an EU member state’s economy. (In Lambrinidis’s homeland of Greece, for example, China bought stakes in the port of Piraeus, eventually gaining control of the strategic waterway.)

But officials from Italy’s euro-skeptic government counter that the Chinese deal has nothing to do with politics or security. Rather, they say it’s a win-win arrangement that will inject badly needed money into Italy’s stagnant economy after years of EU-led austerity. And they’re not alone. About a dozen EU member states have signed Belt and Road pacts.

Sidestepping the question of whether the deal will pay off for Italy, Lambrinidis dismissed fears that China’s foray into Europe will jeopardize security, pointing out that both Rome and Brussels screen investments for security risks.

He added that the EU and its member states also monitor investments to ensure they comply with the bloc’s stringent labor standards. “So a lot of the concern that one has looking at Chinese investments elsewhere in the world are not necessarily concerns in the EU precisely because the European Union is strongly united and has its own internal market and laws,” he said. 

The EU also consistently raises its own concerns directly with China. The ambassador said the bloc made some headway at a recent summit with Beijing on the subject of Chinese industrial subsidies and that he hopes there will be more progress at the G20 summit in Osaka later this month.

But Brussels — like Washington — has so far failed to make a major breakthrough with China.

“The progress is steady but it is not fast. And this is not too surprising, but we have told China publicly that we’re not willing to wait ad infinitum,” Lambrinidis said.

He added that there are areas where the EU and China can cooperate, including on sustainable development and climate change.

But Lambrinidis warned that the EU draws the line at efforts by Beijing to export its “governance values” to other countries under the guise of investment. “So we have said that in addition to being a ‘cooperation partner,’ China is for the European Union a ‘systemic rival’ when it comes to issues of values and human rights around the world,” he told us. “We will in every instance with China use a different toolbox to address those issues.” 

Lambrinidis also cautioned against inflating the importance of Chinese investment in Europe, which is still miniscule compared to investment from the U.S.

“This does not mean that China does not have an increasing engagement in Europe, but the roots of that engagement are rather shallow,” he said.

Nevertheless, given China’s growing economic clout, the EU is ensuring that “its own industrial base is more protected. We are not for protectionism, but we are most certainly for protection when it is justified, when market conditions are not equitable and are not balanced.”

The need to protect against unfair trade practices — a priority for the Trump White House — is another reason why Lambrinidis said the U.S. and EU must work together, not against each other.

“There simply is no better alternative than the United States working together with the biggest development aid donor and the biggest foreign investment creator around the world, which is the European Union.”

But when asked whether Trump, by picking trade fights with the EU, missed an opportunity to team up with the bloc and confront China as a united front, the ambassador demurred.

“I focus on the present and the future on this, and I see that in fact we haven’t lost any opportunity in addressing this now, together.”

Trump Goes It Alone

But the two sides remain far apart in how they fundamentally view the world, as Europeans fight to preserve a liberal international order that Trump sees as anachronistic to his America First agenda.

Even when it comes to confronting China, the two sides diverge, with Trump preferring a bilateral approach while Lambrinidis says such disputes should be dealt with in a multilateral context through the World Trade Organization.

“The EU strongly believes in the importance of preserving a rules-based multilateral system — not out of some ‘romantic attachment’ to it, but based on the pragmatic understanding that internationally binding and well-enforced rules are the best way to promote our interests in the world, to support each other and our allies, and to stop those who increasingly try to substitute their ‘might’ for what is ‘right,’” Lambrinidis said.

But the U.S. president has not only repeatedly disparaged international institutions such as the WTO and United Nations, he has also withdrawn from key agreements such as the Intermediate-Range Nuclear Forces (INF) Treaty and the Paris climate change accord.

Lambrinidis said the EU regretted Trump’s decision to pull out of the Paris agreement, although that decision — which does not take effect until December 2020 — doesn’t spell the end of the agreement. Rather, he said it made “the rest of the world even more united and determined to work towards its implementation”

Trump’s decision to abandon another landmark international agreement, however, has visibly strained EU-U.S. relations.

It’s been just over a year now since the president ditched the 2015 Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA). Since then, the EU has fought to salvage the agreement, despite Washington’s “maximum pressure” campaign to squeeze Iran and force the regime to renegotiate the deal — a prospect most experts say is far-fetched.

Trump complained that the deal did not address Iran’s other malign activities, such as its support of proxy militant groups and ballistic missile development. But Lambrinidis, like many experts, counter that the agreement was never meant to do that. Rather, it was intended to take the most immediate threat — Iran’s nuclear weapons — off the table.

And on that score, Iran has held up its end of the bargain.

Lambrinidis pointed out that the International Atomic Energy Agency has certified more than a dozen times that Iran is complying with the agreement, “as did the U.S. intelligence community.”

“And this is precisely what that agreement with Iran intended to do. It did not intend to resolve all the issues in the world. It intended to resolve the most important issue, which is developing and having nuclear weapons. This is the most important issue today that is being discussed with North Korea. This is the most important issue that was being discussed yesterday with Iran,” he said.

“Now, are there other issues with Iran? Absolutely. The issue of ballistic missiles. The issue of terrorism. The issue of its actions in Syria and elsewhere. On all these issues, the European Union today both has sanctions in place against Iran and, because of the nuclear agreement, has opened the door for direct and very hard negotiations.”

For instance, Lambrinidis said that as the EU’s special representative for human rights, he consistently raised the issue of human rights during negotiations with Tehran. “So under no circumstances has the Iran deal in any way limited either our ability or our commitment to address these other issues. So the real question is, does withdrawing from the agreement make it easier to address those issues? Would an Iran that today would be running to develop nuclear weapons uncontrolled by the strictest and most invasive review regime ... be an easier partner [to talk to] or a tougher one? We think it would be a tougher one.”

The administration doesn’t agree and has blasted the EU for setting up a so-called special purpose vehicle called Instex to allow barter-based trade with Iran of medicine, food and other humanitarian goods that are exempt from sanctions.

But Washington says this payment channel still undermines its sanctions, which have hammered Iran’s economy, slashing oil revenue and causing inflation to soar. Trump’s refusal in May to grant any more waivers to countries such as China and India that import Iranian oil — coupled with his designation of Iran’s Revolutionary Guard Corps as a terrorist organization and the deployment of more U.S. military assets to the Persian Gulf — has further tightened the noose around Tehran.

Meanwhile, many Iranians are just as unhappy with the EU, arguing that Instex doesn’t go far enough to help the country’s battered economy, which is toxic to many European companies that fear being shut out of the U.S. market.

The debate may be moot regardless.

With frustrations mounting, Iran recently declared that it would stop complying with two of its commitments under the nuclear deal, although it would refrain from abandoning the agreement — for now. Iranian President Hassan Rouhani gave Europe 60 days to find a way to bypass U.S. sanctions and allow Iranian oil sales and banking transactions or else Tehran will resume enriching unlimited amounts of uranium, which would mark a dangerous return to the nuclear standoff.

Lambrinidis said the EU rejects “any ultimatums” from Tehran. Much to the dismay of the administration, however, the bloc still refuses to give up on the nuclear deal. During a mid-May visit with Secretary of State Mike Pompeo, EU foreign affairs chief Federica Mogherini urged the White House to exercise “maximum restraint” in its “maximum pressure” campaign that has ratcheted up tensions in the Gulf.

“We’re doing what we said we’d do from the moment we signed this agreement,” Lambrinidis told us. “We said we would get rid of sanctions … and we said that we will continue focusing on Iran’s violations in other areas, and we are doing both.

“We strongly urge Iran to continue to implement its commitments under the JCPOA in full as it has done until now and to refrain from any escalatory steps,” he added. “We remain fully committed to the preservation and full implementation of the JCPOA, a key achievement of the global nuclear nonproliferation architecture, which is in the security interests of us all.”

Secure in Its Role in the World

The issue of security — and who pays for it — has been another irritant in the transatlantic relationship. Trump has repeatedly ripped into NATO member states for not spending enough on defense and even threatened to walk away from the security alliance that has served as a pillar of post-World War II stability.

In a Feb. 17 New York Times article, a senior German official put it bluntly: “No one any longer believes that Trump cares about the views or interests of the allies. It’s broken.”

Not surprisingly, the ambassador had a very different take.

“I think the United States cares deeply about NATO and I think President Trump does so himself,” Lambrinidis said, citing the warm welcome NATO Secretary-General Jens Stoltenberg received by members of Congress during an April 4 visit.

But that bipartisan invitation to address a joint session of Congress was made specifically to counter Trump’s anti-NATO bluster and reassure member states that the U.S. stands behind them.

In fact, many observers say Stoltenberg was elected to serve a second term as secretary-general in part because he has deftly credited the U.S. president with prodding NATO members to devote 2 percent of their GDP spending to defense (even though members already committed to that target prior to Trump’s election).

Lambrinidis said Europe has been spending more on its defense, noting that “almost $100 billion more in European Union investments in their armies will occur by the end of this year or next year,” and that collectively, EU member states spend more on military procurement than any other country in the world after the U.S.

However, it’s not just about the dollar figures, Lambrinidis said, but on spending the money “smarter and better.” He pointed out that NATO’s 29 member states have improved their coordination and stepped up efforts to combat hybrid security threats such as cyber hacks and online disinformation campaigns, especially those linked to Russia.

“Look, the security threats that we face around the world today are entirely different than a few years back. We have proliferation of weapons of mass destruction, for example. We have new arms races. We have terrorist fighters coming back from conflicts. We have artificial intelligence — a huge security threat if it’s not managed collectively. We also have cyber threats. And the need to reconstruct devastate war zones to allow people to return peacefully…. Now, all these are threats require to some extent a military component to address them, but to a very large extent, they require other components,” Lambrinidis said.

And this is where the European Union, the world’s largest aid donor, can play a unique role, by leveraging both its newfound hard power and its traditional soft power.

“Take Syria, for example, take Libya, take Yemen,” Lambrinidis said. “To resolve those conflicts, you obviously need a military presence. But it is impossible to [resolve them] unless you take a wartime country and a wartime economy and turn it into a peacetime country and a peacetime economy. This requires a tremendous amount of investment, including business investment and development aid. It requires humanitarian aid to ensure that people who are destitute can return home and will not be radicalized somewhere else. It requires building institutions in those countries that have been entirely destroyed.”

On that note, the ambassador said the EU “made it clear that international support for reconstruction in Syria will only be possible once a credible political solution” in line with U.N. peace efforts is underway. That requires, among other things, “a democratic and inclusive government guaranteeing people’s safety and security, an agreed conflict-sensitive development strategy, reliable and legitimate interlocutors, as well as guarantees in terms of funding accountability. None of these conditions are yet fulfilled in Syria.”

The Migration Dilemma

Likewise, Lambrinidis said the EU is taking a multipronged approach to migration, an issue that sparked a political furor in 2015 when over 1 million asylum-seekers from poverty-stricken and war-ravaged nations flooded Europe’s shores.

While the crisis has since abated, the ambassador said it is still a priority for the EU. Among other things, the bloc set up a European Union Emergency Trust Fund to address the root causes of migration.

“We work with 26 partner countries, which are facing growing challenges in terms of demographic pressure, extreme poverty, weak social and economic infrastructure, internal tensions and institutional weaknesses, insufficient resilience to food crises and environmental stress,” Lambrinidis said, adding that the bloc is also encouraging European businesses to invest in African countries to create jobs and discourage migrants from making the dangerous trek across the Mediterranean in the first place.

Lambrinidis admits that this strategy won’t create “immediate, magical results. But if you want to truly address this issue, in the medium and long term, this is the way to do it.”

In the meantime, he said Brussels is trying to support front-line countries such as Greece and Italy, “helping them quickly determine whether or not asylum-seekers are entitled to refugee status [and integrating] people who deserve that status.”

The EU is also targeting the human trafficking rings that prey on desperate migrants while saving lives at sea.

“Tens of thousands of lives have been saved — not 1,000, not 2,000, but tens of thousands — because we think of it as our obligation to ensure that those people are treated like human beings and not like the ‘disposable commodities’ that others treat them as, either in their countries or by the human traffickers,” Lambrinidis said. “Europe stands by human rights and will defend every life that it can save and it is doing so.”

Populism’s Enduring Power

But in doing so, Europe created a political backlash, as anti-immigrant, populist parties grew in strength partly in response to the refugee crisis. Today, far-right, euro-skeptic parties hold sway in countries ranging from Austria and Italy to even migrant-friendly countries such as Germany and Sweden.

And with European Parliamentary elections set for May 23 to 26, many fear that if these nationalist parties, which have coalesced into a new alliance, gain a significant foothold, they will try to gut the EUfrom the inside.

Lambrinidis — who himself served as a member of the European Parliament for the Greek Social Democratic Party from 2004 to 2011 — called the elections “one of the largest democratic exercises in the world.”

While populist parties have stoked nationalist fervor that has led to a rise in far-right extremism across the continent, Lambrinidis said the EU has been addressing xenophobia and racism through its laws. But he added that traditional political parties also need to address the legitimate grievances that the populist movement has tapped into. At the same time, populist parties that were swept into power on vague promises need to adapt to the harsh realities of governing.

“I think everyone is learning from the other quite frankly,” he said. “You see mainstream political parties developing and evolving their programs, focusing often on those who have been left behind by globalization and economic inequalities — an issue that is coming up a lot in the United States as well.

“But at the same time, we as Europeans place tremendous importance on ensuring that no matter what stresses we have in our societies and in our economies, we are based on values, we are based on human rights, we are based on democracy. We do not compromise on those values,” the ambassador declared. “In fact, we think those values are the solution to many of our issues because we discuss — we don’t suppress voices. We don’t reach a point where people just explode. You always have your extremes everywhere. But it is the strength of our democracy that actually should be praised in these difficult times.”

Lambrinidis pointed out that if Europe were such a terrible place with “no freedom, no hope and no economic prospects,” millions of people would be trying to escape the continent. Instead, millions are trying to come to it — “precisely because they see in Europe a harbor of human rights and a harbor of equality, even with all our problems.”

And despite those problems, Lambrinidis noted that polls consistently show that support for the EU is as high as ever.

“Isn’t that amazing? Wouldn’t you expect from what you often hear here about Europe that people would say, ‘Well, given all the financial crises and the immigrants and this and that … I don’t like Europe?’” Instead, people are reporting that the European project “has been good for their countries and for their lives. And I think that says a lot about the European Union, its resilience and its strength.”

He added: “Just look at only the last few years of achievement, during quite turbulent times for Europe and the world. We have had massive progress in stepping up protecting our external borders; strengthening our defense and, through that, NATO; ensuring that the digital world is not an anarchical place through our leadership in data protection and privacy; delivering on our climate pledges; restoring sound public finance; implementing a trade policy with major countries and regions that is more open, transparent and values-based; cutting unemployment and now reaching a record-high employment rate of nearly 75 percent. So the EU is both working and delivering, every day.”

Place Your Bets

Lambrinidis recalled serving as Greece’s foreign minister during the country’s economic meltdown just over a decade ago. “And I remember most people at the time were basically asking me, “OK, so come on Mr. Foreign Minister, when is the euro going to collapse? When is Greece going to leave the European Union? Come on, be honest.

“And I said I’ll be honest with you. If you want to lose it, put your money exactly on those predictions, because I’m going to tell you right now it’s not going to happen, and of course it didn’t happen.”

“Europe is remarkably strong and resilient, especially in crises,” he continued. “We have our way of dealing with them. Some people in this country find it frustrating. ‘Oh, you take so long. Oh, you discuss so much.’ I understand that. But please bet on a strong, democratic, human rights-based, economically vibrant Europe remaining the United States’s biggest friend and biggest ally.”

On a more personal note, the ambassador told us that he’s been struck by the “innate openness, generosity and kindness” he’s encountered during his many stints in America, including as a self-described “nerdy kid” at Amherst College and at Yale Law School.

“I was a typical college and law school student I suppose. I was studying and working, but I wasn’t quite typical after all because I was in fact a Greek kid who came to this country deeply appreciative of the opportunity it gave me. So I took all this very seriously. Then I came to Washington and I was a lawyer at a big law firm, doing international trade and arbitrations.

“My friends and I were in the office from early in the morning to late at night,” Lambrinidis added, laughing that he doesn’t remember if D.C. had much of a social life back then, although he knows the city has undergone a dramatic transformation since then and he hopes to explore those changes — assuming he can carve out some free time in his current position.

“After a whole month of being immersed underwater, adjusting to this job, I did my first bicycle ride around Rock Creek Park. It was absolutely stunning. So I look forward to that a lot,” he said.

“But I can tell you what hasn’t changed — my friends. It’s remarkable how the people that I studied with and worked with so many decades ago became my family. When it was decided that I was going to come back as an ambassador, I felt in a way like I was returning to my second family.”