EU and US hold first trade and technology talks amid tensions

The Trade and Technology Council is a forum for the EU and US to find common positions on issues related to global trade and emerging technologies. [Shutterstock]

The new EU-US Trade and Technology (TTC) is set to hold its first meeting in Pittsburgh on Wednesday (29 September), in the shadow of the submarine dispute between France and Washington, which had put the transatlantic relationship to the test.

The summit will give Europe more clout and set standards and rules for the 21st century, the EU’s trade and digital chiefs said earlier this week, underscoring global concerns about China’s growing power.

Comments by the European Commission’s trade and economy Vice-President Valdis Dombrovskis and digital Vice-President Margrethe Vestager came as both sides faced off against China in areas ranging from trade to defence to technology and human rights.

“There is real strategic and geopolitical importance to this new platform as a way in setting standards and rules for the 21st century. So we need this Council to amplify our status,” Dombrovskis told reporters.

Besides Vestager and Dombrovskis, talks will also be co-chaired by US Secretary of State Antony Blinken, US Secretary of Commerce Gina Raimondo and US Trade Representative Katherine Tai. 

The Council’s 10 working groups will focus on technology standards, green technology, supply-chain security, data governance, export controls, investment screening, and global trade issues.

A draft of the joint statement expected in Pittsburg, which was leaked to EURACTIV, stresses the regulatory autonomy of both parties. 

LEAK: Trade and Technology Council draft statement reveals top priorities for transatlantic talks

The main areas where the EU and US will seek convergence are foreign investments, export control, AI and semiconductors, according to a joint statement leaked to EURACTIV.

In the leaked document, the EU and the US also stress the importance of workers’ rights, sustainable supply chains, and the fight against climate change. These strong positions help to set the two Atlantic powers apart from China.

The senior EU and US officials hope to discuss semiconductor shortages, artificial intelligence, and tech competition issues at the inaugural meeting.

The chip shortage due to manufacturing snags has had a massive impact on the US economy, hindering auto production and increasing prices.

“The semiconductor shortage has been a top priority for the president and for his economic and national security teams,” a senior US administration official told reporters in a briefing call, adding that the White House has been “working overtime” to address the situation.

But the official said, “It has also been a top priority of Europe,” and the meeting will offer an opportunity “to continue building our partnership with the EU on semiconductors,” with a focus on “near-term disruptions” as well as longer-term supply reliability issues.

French reservations

However, EU diplomats said France wanted to strike out a reference to the second meeting in spring 2022 when the French presidential election will take place.

It was unclear how the EU members would reach an agreement in time for Wednesday’s meeting, although the European Commission was talking with France and other EU countries, EU diplomats said.

The first TTC talks were in doubt last week because of French anger over Australia’s scrapping of a $40 billion nuclear submarine contract and decision to opt instead for a deal with the United States and Britain.

However, European Commissioner Thierry Breton said on Tuesday (21 September) that disruptions in transatlantic ties have been building up for years and cannot be reduced to just frustration over the submarine snub.

EU's Breton: AUKUS sub snub fuels 'growing feeling of broken relationship'

As EU diplomats discuss whether to cancel or postpone an upcoming EU-US summit meant to focus on technology and trade over the AUKUS deal, French officials insist this is not about a lost bilateral arms contract, but about a ‘broken’ relationship between allies.

When the European Commission announced its intention to launch the TTC after president Biden’s election last year, some were reminded of the TTIP, a failed attempt to reach a comprehensive trade agreement between the EU and the US. However, the TTC is less ambitious in its scope and has a different focus.

While the Trump-era steel and aluminium tariffs are still in place, EU and US leaders agreed to suspend the application of retaliatory tariffs related to the aircraft dispute in June of this year.

In a speech earlier on Monday, Dombrovskis also highlighted the need to take joint action on China but seemed to point to a broader, more multilateral approach rather than an EU-US effort.

“We equally share concerns about the urgent need to address unfair trade practices emanating from non-market economies,” he said.

But he called for a joint effort to strengthen the World Trade Organization, which was not designed to deal with issues such as force-technology transfers, “aggressive industrial policies”, and “massive industrial subsidies.”

Tech policy convergence 

This inaugural meeting is a “constitutional moment” where the two partners need to define what they can agree on, Fredrik Erixon, Director of the European Centre for International Political Economy, told EURACTIV.

A priority for Washington is addressing short-term disruptions on semiconductor supply-chains, a senior US administration official told reporters. A key aspect is to avoid a ‘subsidy race’ and organize a system of subsidies that would complement both partners.

The two blocks seem intentioned to better coordinate foreign takeovers in the future, although Europe still lacks a common approach on the matter. There is also recognition that unilateral trade restrictions should be avoided, as they risk affecting the partner’s supply chain.

For Tyson Barker, head of technology and global affairs at the German Council on Foreign Relations, the most significant outcomes might come in the long-term with a coordinated approach to accessing dual technologies and integration on research and development. “[The TTC] is about relationship building,” Barker said.

The transatlantic partners are also committing to work together on artificial intelligence, despite very different regulatory approaches. The objective is to establish common principles that would define the international standards for AI, to prevent China from becoming the standard-setter in the field.

The Privacy Shield negotiations were kept separate, officially, because not all the actors involved in the privacy bargaining are involved in the TTC. “I do see the two things connected; the Privacy Shield negotiations are at an advanced stage,” said Caitlin Fennessy, research director at the International Association of Privacy Professionals.

[Edited by Alice Taylor]

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