“Almost a re-pivot”

What are the main foreign policy challenges Obama will focus on during his second term?

David Ignatius: The first immediate challenge is Iran. Because the president has made a commitment to prevent Iran from obtaining a nuclear weapon, he must see if there is an opening for a diplomatic settlement of the nuclear issue by mid-summer. Otherwise, the talk of an Israeli military strike--and pressure for the US to join in a preventive action--will begin building again. The second immediate challenge is Syria. Here again, the administration needs to try to make diplomacy work--through Russia--or face the inevitability of deepening military conflict.

Wolfgang Ischinger: I fully agree with David's analysis, but I would add as an additional important priority from a European point of view an effort to kick-start peace negotiations between Israel and the Palestinians. The peace process must not be abandoned. Another important challenge is an improvement in US-Russian relations. Without a meeting between Obama and Putin, no solution of the Syrian crisis, for example, is likely.

Asia seems to be becoming more important for the U.S. What about Europe?

Ignatius: The biggest news of the Munich Security Conference, for me, was Vice President Biden's ringing reaffirmation of the trans-Atlantic alliance and the partnership with Europe. It was almost a "re-pivot." When he described Europe as the "cornerstone" of American foreign policy, Biden meant it.

Ischinger: I could not agree more. If we can get negotiations going on a comprehensive transatlantic trade deal, both the US and Europe would benefit enormously.

What are the main hurdles for a free trade agreement between the U.S. and Europe and what should be done to overcome them?

Ignatius: America genuinely fears the danger of European over-regulation of financial markets, especially attempts to establish more uniform rates of tax and what the US sees as self-defeating limits on certain financial products. I think both Americans and Europeans need to embrace the reality that trade and investment liberalization are LIBERAL ideas-in the sense that they rely on market forces and comparative advantage to create jobs and wealth. One positive factor in this liberalization is that Europe is moving toward having a genuinely modern and consolidated central bank in the ECB, and Germany is quietly acquiescing in this development, despite the fears of the Bundesbank.

Ischinger: Again, I fully agree with David. Among the many hurdles standing in the way of a free-trade area are certain agricultural products such as GMOs. If these specific issues turn out to be too difficult to resolve, they should simply be excluded from the trade deal. The deal as such is too important for all of us!

Access to new domestic energy sources through fracking might change U.S. foreign policy - how soon and to what extend?

Ignatius: The shale oil and gas revolution is still more promise than reality: There are many regulatory and other hurdles that must be passed. But markets are driven by perceptions, and the perception that America over the next decade will re-emerge as a low-cost source of energy and center for manufacturing is already changing market behavior. An America that has restored its economic strength is bound to be a stronger player in foreign policy. The world loves a winner, hates a loser.

Ischinger: The perspective of a growing US independence from gas and oil reminds us that the one key challenge for Europe in the next decade is the challenge of competitiveness. If energy prices are going to be so much lower in the US than in Europe, how are we going to keep our jobs here in Europe, and to add new jobs to them? This is why a coherent European energy policy is so important for all of Europe.

Nicolai Tewes
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