The ambassadors of Belgium, the Netherlands and Luxembourg argued from experience Monday for the virtues of integrated economies while expressing concern that the bonds holding the global trading system together are weakening.
The Benelux envoys chose Atlanta for what will be their only joint appearance outside the Beltway to mark 60 years since they created a model of shared sovereignty that helped lay the groundwork for the European Union.
But highlighting their own close relationship is also a way to show the benefits of working together across borders at a tense time in transatlantic relations, the ambassadors said after a luncheon organized by the Belgian-American Chamber of the South and the Netherlands-American Chamber of Commerce Southeast, which would also host a dinner for the envoys later that evening.
President Trump, despite supposedly reaching a temporary truce on auto tariffs in July, revived that threat last month and has refused to exempt the EU from steel and aluminum tariffs imposed on national security grounds.
Closer to home, the EU is eyeing a Dec. 11 House of Commons vote in the United Kingdom on the Conservative government’s plan for Brexit, which for a time caused existential concern over the bloc’s future.
While home to just 28 million people, Benelux countries play an outsize role in global economic affairs and European governance. Brussels is the EU capital, while tiny Luxembourg alone is the No. 8 foreign investor in the U.S., thanks to its large number of holding companies like steel giant Arcelor Mittal.
Recent trade tensions touched off partly by the U.K. decision to leave the EU have shaken things up, but Brexit has also provided a silver lining for those who support the bloc, said Sylvie Lucas, Luxembourg’s ambassador to the U.S.
“It has reminded us all that perhaps we have become a little bit too complacent with what we have achieved,” Ms. Lucas said, telling a packed audience at the Metro Atlanta Chamber that the remaining 27 nations have been galvanized in their support of the EU project.
Still, populism remains a potent political force on the continent, with every election since Brexit being measured in terms of how well the establishment has been able to stave off threats from euroskeptic, anti-immigrant parties.
Brexit’s outcomes are too hard to predict, said Belgian Ambassador Dirk Wouters, but the vote itself laid plain “illusions” that countries can easily extricate themselves from complex supply chains.
“It’s fair to say that there is no other country that, even in its dreams, wants to leave the European Union. We’ve all seen what kind of things can happen when you try to untangle your economic interdependence,” he told Global Atlanta in an interview after the event.
In his public remarks, Dutch Ambassador Henne Schuwer noted that the decision to leave was a “march to folly” that EU partners had to accept, even if hesitantly. Now, he’s more worried about the actual fallout from implementation.
“I’m very concerned about the lack of preparation in the United Kingdom,” which is set to leave the bloc March 29 of next year, with or without a deal. Mr. Schuwer said the Netherlands has hired 1,000 new customs agents to deal with the potential imposition of a new border, while the U.K. had brought on “zilch.” That could create long clearance times that would hurt these four economies.
The envoys agreed that fighting skepticism about European and global integration requires sustaining economic vitality while communicating the practical benefits to their citizens of working across borders.
At least the negative corollary already seems true: Companies are seeing the disadvantages of protectionism. Governments should be involved in smoothing the way for their companies to compete — not imposing artificial barriers, Frank Vromant, newly named CFO of Belgium-based Bekaert Group, said on a business panel following the diplomatic discussion.
His company, which makes steel products including the reinforcement wires that goes into tires, has delayed a $25 million expansion to its plant in Arkansas due to trade disputes. U.S. tariffs weren’t the main problem: Bekaert could have shifted production among its many global plants. The challenge is the retaliation from the EU and other partners.
“It’s very uncertain, and for me this is the key word: Uncertainty,” Mr. Vromant said.
United Parcel Service Inc.’s Victoria King, group vice president for public affairs, said that barriers work against the primary demand of the Atlanta logistics giant’s global customers: speed. Mostly, consumers just want the best price and highest quality products or components — and they want them quickly.
“We hope that we can remind the politicians that they are there to represent the people and to create prosperity,” she said, citing cautious optimism about the United States, Mexico, Canada Agreement, the successor to NAFTA, which has yet to be ratified in the U.S.
“I hope that the world will become one big Benelux.” -Bekaert CFO Frank Vromant
The ambassadors noted that the Benelux integration has worked largely because it has helped solve the problems of small to medium-sized companies that simply want less friction in trading with their neighbors.
That has led to breakthroughs like the removal of roaming charges for mobile phones or the streamlining of business licenses, along with more substantive areas of shared sovereignty like pooling naval defense resources and allowing one Benelux member to police the airspace of another. That focus on the practical has made Benelux a proving ground for larger EU regulations and standards on issues like electric car charging stations.
“It’s like throwing a stone in the pond. The first circle is small and then it makes the circles bigger and bigger,” Mr. Schuwer, the Dutch ambassador, told Global Atlanta.
The U.S. could benefit from a more neighborly approach with the EU, using the leverage of their longstanding alliance to add more pressure on China, which is its true competitor in the realms of 5G, artificial intelligence and the fight for greater dominance in other tech sectors, he said.
“We are an ally of the United States, not of China at the moment. Please don’t make us stop being an ally, because in the end, we might make the difference,” Mr. Schuwer said.
Ms. Lucas of Luxembourg agreed, noting that the EU is working with Japan to counter Chinese overcapacity in steel.
“The allies, the partners who support your interests, who have been together at the WTO fighting the same fight, we are the ones who are being told your imports are a national security risk,” she said, pointing out that the highly technical steel used in the retractable roof of Atlanta’s Mercedes-Benz Stadium was rolled in Luxembourg.
Perhaps Mr. Vromant of Bekaert summed up their collective desire best with a remark that earned him smiles and a round of applause from a trade-friendly audience:
“I hope that the world will become one big Benelux, because it has proven to be a very good thing.”