What US Shale Gas Means for European Industry
From Carnegie Europe
By Judy Dempsey
Supporters of the proposed Transatlantic Trade and Investment Partnership (TTIP) never tire of enthusing about the many economic opportunities that an accord would bring.
The idea of a transatlantic “internal market” is so exciting that some analysts even rave about the creation of a new Western liberal order—and the immense geopolitical consequences that would have.
Yet there is also a real danger that the TTIP could prove detrimental to Europe, due to the widening energy gap between the United States and Europe. If all trade barriers were abolished, manufacturers would no longer need to own factories in Europe to ensure market access. Investment could shift toward the United States to take advantage of better manufacturing conditions there.
Indeed, persistently higher energy prices are already sapping European manufacturers’ competitiveness. That could accelerate the deindustrialization of some countries. What would industrial decline do for Europe’s ambitions to be a global economic and strategic player?
This energy gap between the United States and Europe is a result of the extraordinary energy revolution that is taking place in America. Thanks to shale gas, the United States is on its way from being a net importer of gas to being a net exporter. Observers have yet to fully grasp the geopolitical consequences of that development for U.S. foreign policy.
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