An Auspicious Anniversary for the Marshall Plan

On June 5, 1947, Gen. George Marshall delivered the commencement address at Harvard University. Few people listening 70 years ago realized the historic significance of Marshall’s brief 12-minute speech, and even fewer newspapers reported about it. But to British Foreign Secretary Ernest Bevin, listening to a broadcast of the speech in bed, “it was like a lifeline to sinking men.”

History would come to recognize the speech — which outlined the massive recovery plan to rebuild war-torn Europe — as one of the most significant acts of statesmanship in history. The historical importance of what came to be known as the Marshall Plan, which Winston Churchill called “the most unsordid act in history,” was far more than an unprecedented act of generosity.

Rather, the Marshall Plan served as the cornerstone of American foreign policy and strategic alignment for decades to come. It was a masterstroke of diplomacy that laid the foundation for international economic cooperation and served as a pillar of the U.S. policy of containment, bringing Europe squarely into the orbit of the United States at the outset of the Cold War.

Today, the transatlantic alliance is strained, though it remains as important as ever. Last week, the U.S.-European relationship suffered a blow when the Trump administration announced its intent to withdraw the country from the Paris climate agreement, upsetting diplomatic relationships in Europe and undermining U.S. international credibility. The United States now joins Syria and Nicaragua as the only United Nations Framework Convention on Climate Change countries not part of the Paris agreement.

Not only is the withdrawal tragic because time is running out to address climate change, but in doing so the Trump administration has handed over a key tool of diplomatic and economic leadership to other nations, notably China, which has made clear it intends to fill the void. In a stark sign of realignment, Europe and China responded by announcing a new alliance to “lead the energy transition.” China understands climate leadership strengthens — not weakens — its economy and intends to position itself as the world’s largest manufacturer of rapidly growing clean energy technologies.

China perceives an opening in international climate negotiations to accelerate its strategic alignment with Europe — just as the United States did with the Marshall Plan. And just as the Marshall Plan expanded the U.S. sphere of influence through economic investment, so too is China expanding its influence with its massive Belt and Road Initiative to connect regions making up more than half the world’s population. Meanwhile, Washington has abandoned a trade agreement with Pacific nations that would have positioned the United States as a key player in the region’s economic future and counterbalanced Beijing’s efforts.

The Paris withdrawal comes on the heels of President Donald Trump’s refusal to endorse NATO’s guarantee of mutual defense on his recent visit to Europe. The trip left German Chancellor Angela Merkel to say, “We Europeans truly have to take our fate into our own hands.” Imagine how the world would be different if Gen. Marshall had made Europeans feel similarly 70 years ago.

Plainly, the withdrawal from Paris was not merely about this administration’s skepticism that climate change is a problem. More profoundly, it reflects a view of foreign affairs whereby American prosperity derives from competition with other nations, not strategic cooperation and alliance. National Security Advisor H.R. McMaster and National Economic Council Director Gary Cohn explained the Trump administration’s view of foreign policy in an op-ed last week: “[T]he world is not a ‘global community’ but an arena where nations, nongovernmental actors and businesses engage and compete for advantage.” That is a strikingly discordant note with the legacy of the Marshall Plan, which recognized that securing economic and political prosperity in Europe was in the strategic interest of the United States.

Energy, in particular, is a key area for U.S.-European cooperation and a notable example of how the United States is better off when it is integrated into a global community rather than isolated. When energy supplies to the United States are disrupted, such as after Hurricanes Katrina and Sandy or the Venezuelan worker strike of 2002-2003, America is more secure because an integrated global market allows it to replace disrupted supplies and avoid shortages with imports from other countries.

A connected global energy market also strengthens the United States economically and geopolitically while supporting transatlantic security. In the wake of the shale revolution, U.S. liquefied natural gas (LNG) exports are ramping up fast. By creating a more integrated and competitive global market for natural gas, U.S. LNG will further undermine the market power of dominant suppliers, notably Russia and its influence in Europe. It will also help Europe implement its Energy Union package goals to reduce vulnerability to Russian gas dependence through market integration, interconnectivity, and diversification. That is why European leaders have been pushing the United States for several years to expedite export approvals. Also, one-sixth of U.S. oil exports (both crude oil and petroleum products) went to Europe last year, and transatlantic petroleum product flows remain crucial for the profitable operation of refineries on both sides of the Atlantic.

Just as retreat from the world stage weakens the United States, so too does the oft-trumpeted chimera of “energy independence” — or, worse yet, the Trump administration’s declared goal of “energy dominance.” In truth, U.S. economic and energy security is improved not by “independence” or “dominance” but by being integrated into a functioning global energy market, allowing more optionality, interconnectedness, competition, supply diversity, and interdependence.

That U.S. interests are best served through close cooperation on energy is not new. Indeed, energy was central to the success of the Marshall Plan itself. Europe emerged from World War II battered and short of critical energy supplies. In 1946, in the midst of the coldest winter of the century, Britain was forced to shut down power stations due to a lack of coal. A reliable supply of energy was necessary to avert a complete breakdown of the European economy. The solution to Europe’s crippling coal shortage lay in oil. “Without petroleum the Marshall Plan could not have functioned,” read one U.S. government report at the time, as noted by the Pulitzer Prize-winning historian Daniel Yergin. Indeed, imported oil was one of the single largest items paid for with Marshall Plan aid to rebuild the European economy. As Yergin has written, the Marshall Plan “made possible and pushed a far-reaching transition in Europe—the change from a coal-based economy toward one based on imported oil.”

Seventy years later, despite the body blow from last week’s Paris agreement withdrawal, it remains unquestionably in the U.S. interest to cooperate closely with Europe on energy and climate issues (not to mention all others, from trade and commerce to defense and intelligence).

U.S. and European diplomatic engagement has promoted energy market transparency and progress that will allow natural gas and electricity to flow more easily around the continent and reduce Russian leverage as the dominant gas supplier to Europe. U.S. administrations of both parties have long worked with Europe to diversify its energy supplies and have supported EU efforts to reduce its vulnerability to supply disruptions through pipeline interconnections, reverse-flow capability, and other infrastructure investments. The great research universities and national labs of the United States and Europe collaborate on energy research and development — from smart grids and energy storage to carbon capture and advanced nuclear. Energy R&D has long garnered bipartisan support, and the United States would be smart to stick by its commitment, along with nearly all of Europe, to double energy R&D spending.

Cooperation through the International Energy Agency (IEA), made up of countries in the Organization for Economic Cooperation and Development, helps stabilize world energy markets, improve data and transparency, and plot a mutually beneficial future. This includes the agreement by IEA countries to hold a certain level of strategic oil stocks to mitigate global energy supply disruptions. Our technical assistance programs share best practices on everything from safe and responsible shale development to energy efficiency standards. For example, the United States and European Union are facilitating the deployment of electric vehicles through a joint research center and the development of common standards and test procedures.

Continued engagement with Europe on energy policy is mutually beneficial. That is likely to continue on issues such as European energy supply and infrastructure diversification, oil and gas trade, and global energy governance. But the withdrawal from the Paris agreement casts a pall over U.S.-European energy cooperation. European partners have made clear that action on climate is a top priority. Not only will the United States no longer sit at the table with its European counterparts in climate diplomacy, but the Paris decision reflects the stark changes that have been announced by the Trump administration in domestic policy. Cuts in agency funding and R&D spending would weaken research and regulatory collaboration. Reversing U.S. climate policy would undermine key aspects of U.S.-EU energy cooperation, such as phasing down hydrofluorocarbons, reducing methane emissions, and addressing aviation emissions. Easing fuel economy standards would reverse progress in transatlantic cooperation on vehicle standards and technology.

The Marshall Plan was not charity but a strategic masterstroke that recognized that U.S. national security and global influence are enhanced through a strong transatlantic alliance. On energy, and much else, it’s a lesson America’s leaders would do well to remember as we commemorate Marshall’s legacy 70 years later.

Photo credit: Office of Presidential Libraries/U.S. National Archives/Wikimedia Commons