02 September 2022

The strategic importance of Italy-US relations

The Position Paper “The strategic importance of Italy-US relations. Past, present and future of a mutually beneficial alliance”, prepared in collaboration with the National Italian American Foundation (NIAF), was presented during the “Country Focus USA” panel at the 48th Cernobbio Forum of The European House - Ambrosetti. The panelists were Michael R. Pompeo (70th U.S. Secretary of State), Lindsey Graham (U.S. Senator from South Carolina), and Kathleen Kennedy Townsend (Chair of the Robert Kennedy Memorial and former LT Governor of Maryland). Maurizio Molinari (Editor in Chief, La Repubblica) moderated the panel.

The strategic relationship between Italy and the United States has profound roots that reach back into history. Their initial interaction began in the 18th century, before the Unification of Italy. On one hand, Italy contributed to forging the cultural identity of the United States and Italian-Americans are still, today, the fourth-largest ethnic group of European origin. On the other, the United States was one of the leading lights in Italy’s rebirth during reconstruction in the post-World War II period, where Italy played a strategic role as a “pillar of the West” thanks to its position as an access point to Africa and influence in the Balkans.

Today, the United States is Italy’s no. 3 trade partner and the biggest outside Europe with a positive trade balance in the latter’s favor, worth $39.3 billion in 2021, and a constant growth curve over the last thirty years. Similarly, Italy is the no. 14 trade partner of the United States worldwide and no. 2 on a European level, second only to Germany.

Statistics regarding foreign direct investment also cohere with this. In 2020, investments stock worth $38 billion flowed into the United States from Italy, compared with $31 billion in American investments in Italy, with further margins for development given that Italy, with its expertise and technologies, could be one of the US’ key partners in the areas of sustainability and the green transition (Italy is ranked sixth in the world in terms of renewable technologies exports), and Americans could play a supporting role in the 4.0 transition of Italian manufacturing companies.

Another area of strategic cooperation is the defense industry. The United States has always been the no. 1 country in the world in terms of defense system expenditure. Italy also contributes to this expenditure through its national champions, Leonardo (twelfth-largest defense company in the world and no. 1 in Europe) and Fincantieri (no. 1 in Europe in shipbuilding and sixth in the world in terms of size). At over €760 million, the United States is also the no. 2 country for Italian defense industry exports, which in 2021 reached a level of €4.7 billion. This solid trade partnership is also reflected in a number of existing procurement programs between the two countries, such as the C130J and C127J (transport aircraft) and TH37-A helicopters—all Italian-made—and the KC-767 tankers (American-made air refueling aircraft).

Another important industrial contribution to the partnership is aerospace. Italy is, in fact, the sixth space power in the world with its own space agency and member country of the European Space Agency (ESA), to which it is the no. 2 contributor in terms of its Gross Domestic Product. With an industry worth over €2 billion annually, Italy has technologies and human resources that could provide support to the United States in the coming space race, the geopolitical domain of the future.

On the geostrategic front, and also given the evolving scenarios and shifts in the international balance-of-power, there are a number of areas in which a stronger alliance between Italy and the United States could create mutual benefits.

The first involves reinforcing the southern flank of NATO and stabilizing the regions of the Middle East and North Africa (MENA), areas which have seen a major increase in instability. Italy is one of the twelve founding nations of the Atlantic Alliance, the no. 5 contributor (€27 billion in 2021 which is destined to increase to €38 billion), together with the United States, the United Kingdom, Germany and France, and the no. 2 country in the world after Germany for number of American soldiers stationed. Taken together, all this makes it a cornerstone of the Alliance for defense and international peace. Thanks to its geographical position (a sort of platform in the middle of the Mediterranean Sea), Italy is, therefore, the ideal outpost from which NATO can oversee these areas, but also as a resource of other European Union member states. In addition, as a Mediterranean platform, Italy is in a valuable position to monitor the Indo-Pacific area from traffic to and from that area coming through the Suez Canal.

Also, in terms of Northern Africa, thanks to its extensive participation in the peacekeeping and peacebuilding missions in that area and the diplomatic ramifications, Italy could be a channel of stabilization for the United States in that area, heralding a potential future for Africa as the “next factory of the future” and the creation of a new value chain, an alternative to the Far East, with clear advantages for both countries.Italy’s presence in peacekeeping missions is of special global importance.

Currently, Italy takes part in over 30 missions, both civil and military (UN and NATO), deploying over 7,300 soldiers (Italy is the no. 1 Western contributor of personnel to UN missions). Esteemed around the world for their ability to communicate and empathize with those who live in the zones in which they are deployed, Italy’s armed forces abroad represent a tangible contribution to the success of any operation of this type, the forerunner of the stabilization of the host country and its subsequent economic and social development.

Download The Position Paper “The strategic importance of Italy-US relations. Past, present and future of a mutually beneficial alliance