A week in Brussels, Digital, Latest news, SSAfrica, United States

Week in Brussels: Transatlantic competition, CBAM concerns, ESA EPA upgrade

It’s been a very transatlantic week, with a slight African bent. By Rob Francis and Iana Dreyer.

Transatlantic competition dialogue formally launched

EU competition chief Margarete Vestager and co-chair of the EU-US Trade and Tech Council was in Washington this week for a slew of meetings related to the TTC. There was no readout of her meetings with USTR Katherine Tai nor with Commerce secretary Gina Raimondo. A new date and venue for the second edition of the TTC has yet to be devised. The first meeting of the TTC was held in Pittsburgh late September.

The highlight of her trip was the formal launch of the 11th working group – so to speak – of the TTC, the Joint Technology Competition Policy Dialogue .

The creation of this cooperation mechanism was announced at the EU-US summit last June. It took the two sides six months to set it up.

The fact that the EU is moving ahead with its two flagship digital regulations, the Digital Markets Act and the Digital Services Act is focusing minds in Washington. The first regulatory move in particular aims to increase competition for digital platforms.

The European Parliament’s and Council’s recently adopted positions on these files and the fact that the incoming French presidency aims at fast-tracking these regulations raises concerns in Washington that it might discriminate against US firms in particular.

French president Emmanuel Macron reiterated in a speech on Thursday  that, with the DMA and DSA, he wanted the EU to set the global standard and replicate what the EU had achieved with its privacy rule-book in this field – the GDPR.

The US under the Biden administration is bent on regulating Big Tech too… but there is a time lag in its preparations to do so. One of the two US co-chairs of the new Dialogue Lina Kahn, the Big Tech critic who now heads the  United States Federal Trade Commission.

The aims of the dialogue were spelt out as follows in an inaugural joint statement issued this week: “cooperation will include sharing insights and experience with an aim towards coordinating as much as possible on policy and enforcement.”

The body will also “explore new ways to facilitate coordination and knowledge and information exchanges to ensure that enforcement authorities are sufficiently equipped to address new challenges together.”

“Finally, in addition to enhancing enforcement and policy coordination, these exchanges will help inform similar domestic efforts, potentially contributing to greater alignment on these pressing issues.”

On both sides of the Atlantic, business is however still waiting for the big announcement: the conclusion of negotiations on for a new Privacy Shield to ease transatlantic data flows…

Amcham EU calls for state-to-state agreements on carbon pricing equivalents

The American Chamber of Commerce to the EU is calling on the European Commission to put in place a network of state-to-state agreements covering carbon pricing and equivalent regulatory mechanisms within the framework of the planned carbon border adjustment mechanism.

The Commission’s proposal for a CBAM proposes exemptions for countries which have put in place carbon pricing “at an equivalent level to the EU”.

Amcham EU argues that such agreements should cover countries with “significant trade in impacted goods”, name-checking Canada and the US. The business group says that “different regulatory mechanisms” should also be taken into account, not just market-based measures such as the EU emissions trading scheme.

In a press briefing held earlier this week, Amcham representatives suggested that the future discussions around a global arrangement on sustainable aluminium and steel have probably led the US to believe it can escape the scope of the CBAM, whilst Europe is probably nervous about whether any future climate law agreed in Washington will meet its equivalence requirements.

Amcham EU is also calling for export credits, namely a “WTO-compatible solution” to improve the competitiveness of EU exports.

The association wants such credits to be introduced once the CBAM mechanism is up and running to level the playing field with producers in countries which have a low or non-existent carbon price. It also calls on the Commission to engage in discussions on a global carbon price at the OECD.

Unlike BusinessEurope’s position on the CBAM, Amcham EU is steering clear of criticising the timing for the phase-out of free allowances, but on the sector scope it is recommending a “thorough review” after the pilot phase.

“We strongly urge the Commission to provide specific timelines and details on criteria for expanding the scope in advance,” states the paper.

Elsewhere, Amcham EU notes the importance of WTO compatibility and adds that any legal challenge at Geneva “should not derail orderly and efficient implementation and that the Commission stands ready to make any adjustments to the scheme that may become necessary in the light of World Trade Organization rulings.”

The association also suggests moving the administrative processes away from the border to ease the burden on economic operators and customs authorities and automate data exchange “as far as possible”.

The European Parliament aims to adopt its position on the CBAM in first reading before summer 2022, whilst the incoming French Presidency plans to prioritise the CBAM in the first six months of next year.

EU ESA trade agreement upgrade negotiations

Negotiations between the EU and ESA group of African countries (Comoros, Madagascar, Mauritius, Seychelles and Zimbabwe) on deepening the current interim Economic Partnership Agreement are continuing apace, despite the obstacles imposed by the pandemic.

European Commission published a report on the sixth negotiating round which took place from 22 to 26 November by video conference.

The meeting, which was said to have been held “in a positive and constructive atmosphere”, covered technical barriers to trade, rules of origin , sanitary and phytosanitary standards, agriculture, intellectual property rights (IPR), geographical indications, public procurement, and trade and sustainable development – TSD.

The latter appears to be the main friction point, with the EU aiming for “high ambition” and the ESA partners attempting to link this ambition to “adequate financial and technical support”. Discussions on the TSD chapters are set to continue at future meetings.

On SPS, the parties were able to finalise the technical articles covering equal import conditions, harmonisation, animal welfare, and emergency measures. Capacity building and technical assistance will be discussed at a later date.

On TBT there was progress on marking and labelling, whilst a “constructive exchange of views” was held on conformity assessment procedures.

When it comes to rules of origin, the parties agreed to use self-certification only as proof of origin, whilst talks on agriculture, GIs, and intellectual property rights discussions will continue at the next round.

Both parties agreed to provide additional comments on public procurement by the end of January “in order to ensure fruitful discussions on the chapter in the next round of negotiations”.

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