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Tuesday, June 01, 2004

What Transatlantic Trouble? 

An alert Bonassus reader points out this EUObserver article documenting the healthy and thriving international investment climate between the EU and the US. [You can buy the book it mentions here.] Although I have yet to read the study, I'll archly point out that the article ignores the counterfactual question of how much transatlantic foreign direct investment one would have expected in the absence of the rift over Iraq. On the other hand, the study would seem to weakly contradict previous academic work suggesting that trade patterns should strengthen (or weaken) in concert with expectations about the likelihood of future military cooperation (or conflict). On yet another hand, nobody reasonable seems to believe that US/EU military conflict is even a remote possibility in the forseeable future, so it's hard to take the study seriously as confirmatory or disconfirmatory evidence. Finally, on the last hand I see, since scholars have found that security alliances like NATO tend to strengthen commercial relationships, particularly between states with disproportionate market power, continued transatlantic investment suggests that private actors aren't buying the idea that the NATO relationship is breaking down. No more hands. Bleah.

Read more in a scholarly vein here or here.

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