On 7 November 2020, after days of waiting, it had become clear who the next President and the first Vice President of the US would be: the victory of Joe Biden and Kamala Harris mean a transition of power in the United States, which will also have consequences for the EU.
European wave of congratulations
The announcement of the election victory of the US Democrats resulted in a bipartisan wave of congratulations from the EU, led by Irish Prime Minister Micheál Martin, who emphasised the Irish roots of the Biden family. Ireland hopes that Biden’s election will improve their role in the Brexit negotiations, particularly in view of the fact that the US Democrats supported Ireland’s position concerning the negotiations. Apart from Biden, the future Vice President Kamala Harris has also been showered with congratulations. Her election has great symbolic power: not only is she the first woman to hold this position, she is also the first Black woman and South Asian. At the European Parliament Plenary Session on 11 November 2020, the vast majority of MEPs also welcomed the victory of Biden and Harris.
Renewal of Transatlantic relations
The relationship between the EU and the US, which had been badly affected under Trump during the past four years, now needs repairing. Commission President Ursula von der Leyen clearly supported the renewal of Transatlantic relations and suggested that the EU should take the initiative. The chances are good: Biden is a convinced supporter of a good Transatlantic relationship.
EU-US trade conflict will remain for the time being
However, in spite of Biden’s election victory, the trade relations between EU and the US will take some time to improve. Following a decision of the WTO Dispute Settlement Body in respect of the ongoing conflict on Airbus and Boeing subsidies, the EU announced on 9 November 2020 its intention to impose punitive tariffs of 3.4 billion euros. However, in the long term, there are quite a few hoping for an improved relationship, the settlement of the Airbus-Boeing dispute and greater cooperation – for example with regard to reforming the WTO or an EU-US trade agreement. From the AK’s point of view it is important to prevent both a new version of the failed TTIP Agreement and any further lowering of the standards of protection.
Support for the Paris Climate Agreement promised
Hopes are justified that the US will also improve international cooperation and engage in meaningful dialogue. Biden, for example, announced re-joining the Paris climate accord and aims – as does the EU – at climate neutrality by 2050. In his victory speech, he declared climate policy to be one of his priorities. However, it remains to be seen, how ambitious this will actually be. Apart from that, it is likely that following the run-off elections for the two senators from Georgia in January 2021, a blocking minority of Republicans in the Senate will remain. Hence, this would make – as happened under Barack Obama – the realisation of climate, healthcare and social projects very difficult.
Already before the Election, Biden presented a Tax Plan, which provides for tax increases on annual incomes above $ 400 000. He also announced an increase of the minimum corporate tax rate, which is urgently needed following the massive cuts of the corporate tax rate under Trump from 35 to 21 percent. A global introduction of a minimum corporate tax rate is currently being discussed at OECD level. Most recently, the negotiations were postponed to March 2021. Apart from that, the next G20 meeting will take place in a few days on 21/22 November 2020. Hence, AK and ÖGB emphatically demand the earliest possible introduction of a global minimum tax rate. Future support by the US would be essential.