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The EU US Trade and Tech Council – how it’s shaping up

The EU-US Trade and Technology Council was an idea tabled in Brussels and endorsed at the last minute by Washington ahead of their first summit in June 2021. Although it might be postponed, preparations for a meeting that is ultimately expected to go ahead are far advanced. This is what we know.  By Robert Francis and Iana Dreyer.

Preparations for the inaugural meeting of the TTC on 29-30 September were in final stages last week when ‘AUSUK-gate’ hit. An aggrieved France called for the cancellation of ongoing trade talks with Australia and the TTC to be postponed. A final decision is expected on Friday. The US counterpart must also agree to an EU postponement request.

The quest for common objectives, deliverables, and the China question

So what is this TTC all about and how had it been shaping up?

The Commission conceives the TTC as a “platform to give a political steer to the emerging landscape,” as one official put it.  The overall objective – from the Commission’s perspective – is for both sides to issue a joint working programme at the end of the meeting that would set the tone for cooperation and set longer-term goals for the relevant strands of work.

This landscape is one of rapid technological change, deep geopolitical shifts – both issues involving China’s rise – and accelerating climate change. The landscape is also one of high uncertainty over the future of transatlantic alliance amidst a US ‘Asian pivot’ on the security front and after the trauma of four years of Trump administration.

Putting together the TTC was no easy task and the two sides had not managed to finalise an agenda by the time the crisis over Australia’s submarine purchase plans struck.

One of the difficulties lies in the fact that the contours of the Council and the objectives pursued by both sides do not fully coincide.

The EU does not want this Council to become a formal negotiation forum for international agreements – it needs relevant member state mandates and structured domestic consultations to be able to engage in such an exercise.

The aim is rather to compare notes with the US on a series of regulatory steps and make sure both sides take their decisions by taking account what the other is doing.

The US, in contrast, likes to come out of meetings with concrete deliverables that one can show to the press and domestic stakeholders. Otherwise there is a risk it dismisses such meetings as mere ‘talking shops’ – of which there have been a few in the past with the EU such as a short-lived Transatlantic Economic Council set up in 2007.

The underlying theme is the extent to which the EU will want to go along with an ongoing US anti-China bent in the policy areas tabled for discussion. The EU does not wish it to become and anti-China exercise. The US wants to tie the EU closer to its views on hedging against China.

A draft joint communiqué is reported to seek common ground in these areas and lists areas of work where views on ‘the China question’ converge.

Objectives both sides are setting each other include the promotion of labour rights and the abolition of forced labour, joint work on export controls, and supporting economically “a global level-playing field”, seeking to work together to respond to market distortive policies, in a veiled reference to China.

Formal and less formal arrangements

So this is what we know so far about the concrete setup.

The meeting will be co-chaired on the US side by Secretary of State Antony Blinken, Secretary of Commerce Gina Raimondo, and Trade Representative Katherine Tai.

On the EU side by Commission Executive Vice-Presidents Margrethe Vestager who deals with digital issues and competition and Valdis Dombrovskis, who has the trade portfolio. The foreign affairs dimension will be less visible due to the absence of the EU’s High Representative of the Union for Foreign Affairs and Security Policy Joseph Borrell.

These co-chairs oversee a set of bilateral working groups on the following topic areas:

  • Technology standards cooperation
  • Climate and green tech
  • Secure supply chains
  • ICT security and competitiveness
  • Data governance and technology platforms
  • The misuse of technology threatening security and human rights
  • Export controls
  • Investment screening
  • Promoting SME access to and use of digital technologies
  • Global trade challenges

Who will set the tone within the US government and within the Commission on these issues remains to be seen. Within the European Commission, DG Trade seems to be the informal lead, with DG Competition and DG Connect playing a prominent role.

Commissioner Thierry Breton, who is in charge of the internal market portfolio – though formally reporting to Vestager – appears to be playing his own game. Breton was in Washington early this week – partly to prepare the ground for TTC-related conversations on supply chains, not least in the area of semiconductors and pharmaceuticals, his pet projects.

Depending on the working groups, other relevant European Commission departments will be involved in the discussions, such as DJ Justice as part of the ‘data governance’ conversations and of the group dedicated to the issue of ‘misuse of technology threatening security and human rights’.

The Commission has stated that all Working Groups have already met and engaged informally, but just what they are meant to achieve, and by when, still needs to be worked out. Each Working Group will is understood to be rather autonomous and able to set its own pace and meet who, and when, they consider it necessary.

The working groups that appear most advanced in their preparatory work include the following:

‘Data governance and technology platforms’ – This one is being led led by a White House official and two Commission officials from DG Connect and DG Just. It is also a very contentious area on the transatlantic front. The US is seen as wanting have a say in critical regulatory initiatives of the EU in the area of data regulation (the Digital Services Act) and competition for digital platforms (Digital Market Act) – where itself has fallen behind. US firms are crying foul over potential discrimination against their big firms in Europe. The EU for its part wants its famed Brussels Effect to work its magic here.

‘Export controls’ – This is a complex area where the EU fears its firms might be the victim of US export controls to China. At the same time the EU itself just recently expanded its own export controls regulation to include ‘emerging technologies’ to avoid that AI, face recognition and other technologies are used by repressive governments (aka China) to crack down on their opponents. This area will be about managing the risks of policy divergence as both seek to minimise their exposure to China. This is the area of DG Trade on the EU side and the Departments of Commerce and of State on the US side.

‘Investment screening’ – A draft joint set of principles has already leaked. This is is an area where the EU has a major interest in learning from the United States. The Commission in particular is seeking to upgrade the existing EU-wide investment screening mechanism. This is an area where DG Trade is involved, with its counterpart from the US Treasury.

‘Global trade challenges’ – This area is where the US Trade Representative Office is most present, alongside DG Trade. The draft joint statement that is being prepared contains a lot of language related to the world of this working group: intellectual property theft, state-supported excess capacity, forced technology transfer, forced labour, trade and health, fair competition.

The EU is pursuing its own goals with the United States, not least in the area of supply chain resilience. This is one of the reasons Breton was in Washington. It is not yet clear how far the theme will feature in the final statements and working programmes of the inaugural TTC meeting.

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