Economic Fractures Jeopardize US-EU Tech Cooperation
There remains great opportunity for and interest in transatlantic tech cooperation—but economic disputes are exposing divisions between the US and the EU.
The US and European Union launched a joint initiative in June 2021 to drive collaboration on transatlantic technology issues. While there was a flurry of excitement and enthusiasm at the initiative’s launch, recent US-EU economic disputes have provided a harsh reality check for participants, observers, and the many businesses and organizations impacted as a result. This post looks at recent economic fractures between the US and the EU and their implications for the transatlantic technology relationship. Brought to you by Global Cyber Strategies.
The One-Liner
There is continued, great opportunity for and interest in US-EU tech cooperation, but economic disputes drove a wedge into the latest meeting of the US-EU Trade and Technology Council — and could remain a major issue in the coming months.
What is the TTC?
In June 2021, the US and EU launched the Trade and Technology Council (TTC) — a regular convening, composed of US and European officials, aimed at driving forward cooperation on technology standards, internet policy, privacy, and other issues. It has held three official sessions since its creation. The TTC has five co-chairs:
US Secretary of State Antony Blinken
US Secretary of Commerce Gina Raimondo
US Trade Representative Katherine Tai
European Commission Executive Vice-President and EU Competition Commissioner Margrethe Vestager
European Commission Executive Vice-President and EU Trade Commissioner Valdis Dombrovskis
The TTC has 10 specific working groups:
Technology Standards
Climate and Clean Tech
Secure Supply Chains
ICTS [Information and Communication Technology and Services] Security and Competitiveness
Data Governance and Technology Platforms
Misuse of Technology Threatening Security & Human Rights
Cooperation on Export Controls of Dual Use Items
Investment Screening Cooperation
Promoting SME [Small- and Medium-sized Enterprise] Access to and Use of Digital Technologies
Global Trade Challenges
The Reality Check of Economic Differences
There was much initial excitement and enthusiasm about the launch of the TTC, and the Council has indeed made important progress in several transatlantic technology areas. At the same time, however, some participants and observers appeared quick to overlook the many differences that exist between the US and EU perspectives (broadly speaking) on technology, technology policy, and technology and competition.
But the December 2022 meeting of the TTC — the third ministerial since June 2021 — brought these differences to the forefront. I analyzed this development in a recent column for Barron’s:
A major dispute overshadowed last month’s meeting. The Europeans were unhappy with electric-vehicle subsidies in last year’s Inflation Reduction Act, concerned they would unfairly discriminate against European companies. One European delegate even refused, last-minute, to show up to the U.S. Despite the optimistic tone struck in press releases, several disagreements about electric vehicle subsidies, “economic protectionism,” and other issues undermined the meeting’s efforts at more productive trans-Atlantic tech cooperation. Several meetings I attended around the official TTC convening further underscored the disagreement at hand.
The US government clearly recognized EU participants’ discontent with the electric vehicle subsidies. In its joint statement following the meeting, the Trade and Technology Council said:
We also took stock of the work of the dedicated U.S.-EU Task Force on the Inflation Reduction Act and noted the preliminary progress made. We acknowledge the EU’s concerns and underline our commitment to address them constructively.
Nonetheless, as I described in the Barron’s commentary:
The TTC reportedly devoted just 45 minutes to the IRA disputes, and the White House did not include any discussion of energy, climate, and trade barriers in its press release. The European readout, in contrast, mentions the EU’s “strong concerns” about subsidies under the IRA that it raised in separate discussions with the U.S. EU Internal-Market Commissioner Thierry Breton was unhappy the electric vehicle issue was removed as a specific agenda item and relegated to a lunch discussion—and refused to attend.
Looking ahead, there will very likely be continued US-EU movement on issues concerning artificial intelligence, semiconductors, and even climate technology. Yet differences persist, including because the EU takes a far stronger stance on consumer privacy than the US; the US and EU clearly have different ideas of what economic policy vis-a-vis technology should look like; and the US remains very focused in its technology policy on China, and not every EU member state has the same goals.
As I wrote to close out the Barron’s column:
Dialogue is not going to stop, and cooperation keeps moving in some issue areas.
Nonetheless, the reality check is clear: U.S.-EU tech cooperation isn’t a given, and trans-Atlantic initiatives on technology can be overshadowed in a second by other political and economic fractures.
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