September 30, 2021

The EU-U.S. Trade and Technology Council Has the Potential to Re-conceptualize the Transatlantic Relationship

By Carisa Nietsche

On Wednesday, the United States and European Union held their inaugural meeting of the Trade and Technology Council in Pittsburgh, Pennsylvania. The meeting came at a fraught time in the transatlantic alliance. From the recent fracas over the AUKUS submarine deal to the bungled Afghanistan withdrawal, European allies are feeling increasingly uncertain about whether the United States is a trusted and reliable partner. This feeling of uncertainty reached a fever pitch during the Trump administration, but there was widespread hope in Europe that President Biden would be able to reset the relationship. However, the recent events have increased the pressure on the relationship once again. Against this backdrop, President Biden’s talk about the importance of allies is ringing hollow in Europe. Given the fundamental problems present, the transatlantic relationship is in desperate need of a reconceptualization, and the Trade and Technology Council provides an opportunity to set such change in motion. However, in order for the TTC to realize its promise, the United States needed to do two things to set the tone in Wednesday’s inaugural meeting.

To start, the United States needed to underplay the role of countering China in the dialogue. While the Biden administration’s top priority is competition with China, the EU already bristled at the “counter China” framing. In advance of the inaugural meeting, European Commission officials Rupert Schlegelmilch and David Ringrose clarified the EU’s position, “The TTC is not a dialogue on China.” This position is supported by how European electorates view China. A European Council on Foreign Relations survey found that “at least half of the electorate in every surveyed [European] country would like their government to remain neutral in a conflict between the US and China.” In the joint statement released following the meeting, there was not a single mention of China. The United States was right to avoid framing the TTC as an anti-China dialogue. Doing so threatened to hinder progress on the very issues that will make the United States and Europe more competitive vis-à-vis China.

As the United States embarks on the working group meetings, the United States will be more effective if it focuses more narrowly on advancing pragmatic outcomes. Recently, the EU has preferred to adopt a risk-based approach to securing supply chains and regulating select emerging technologies. Brussels develops criteria to measure risk, performs a risk assessment evaluating the technology vendors or applications, and ultimately adopts the requisite regulations. The European Union adopted this approach to 5G and artificial intelligence. In the case of the latter, the EU’s Artificial Intelligence Act does not call out China directly, but instead outlines the criteria for high-risk AI applications. While the approach rarely bans Chinese technology companies outright and is not wrapped in “competing with China” rhetoric, it often results in the de facto exclusion of Chinese companies. As European Commission Executive Vice President Margrethe Vestager stated, “I think there will be issues where we [the transatlantic allies] would naturally agree on something where China would disagree…But it should not be done because you’re against China, it should be done because you’re pro-democracy.” The joint statement puts the focus on the competition between democracies and autocracies, stating that “The United States and European Union have significant concerns that authoritarian governments are piloting social scoring systems with an aim to implement social control at scale.”

The United States also needed to convey that it is ready for genuine consultations with its European allies—an approach that should form the basis of the future transatlantic partnership. In advance of Wednesday’s meeting, there were concerns in Europe that Washington was looking to dictate the agenda and terms of the relationship in the TTC. Thierry Breton, European Commissioner for the Internal Market, recently expressed that the TTC is about developing future industrial positions, and it is not a classical trade agreement of give and takes. In other words, the United States should be ready for a dialogue, not a negotiation. Keeping this principle in mind will be critical as the working group meetings begin convening. Part of breathing life into the transatlantic relationship requires the United States to recognize that Europe has its own interests, and those interests might not always be the same as the United States’ interests. First and foremost, the allies must accept that the United States and Europe are not going to agree on everything. And that’s ok. From privacy to antitrust policy to the appropriate balance between regulation and innovation, the United States and Europe will certainly disagree on plenty of issues. But a productive dialogue will require allies to align on these thorny issues just enough to facilitate cooperation where it matters most – developing a joint industrial policy, leading on key technologies, securing supply chains, and charting democratic norms and standards for technology’s use.

At the same time, Europe has its own work to do. Margrethe Vestager warned analysts not to expect fireworks in the inaugural meeting. Her warning is largely due to the EU’s approach to the dialogue. The Commission has been keen to include the EU member countries through the European Council. This approach will require all 27 EU member states to reach agreement on a number of issues. Observers saw the risk of this approach a few days before the TTC. Already France attempted to hinder consensus by objecting to language and policy positions in the draft statement. The European Union has often failed to sing from the same sheet of music on these issues, and that has also hindered transatlantic cooperation. The TTC provides an opportunity for European countries to align their agendas internally, which will enable better cooperation with the United States.

The Trade and Technology Council provides the first step towards a newly conceptualized transatlantic partnership. To realize that potential, however, it will require the United States and Europe to approach future meetings in good faith, including on issues where we disagree. Especially on the heels of Afghanistan and the AUKUS deal, the United States cannot afford to squander this opportunity to reset the transatlantic relationship. How the TTC proceeds will be critical not just for the health and resilience of the transatlantic alliance, but for the health and resilience of democracy. Advancing a democratic approach to technology depends on the United States and Europe putting forward a joint affirmative agenda. The TTC gives the transatlantic allies the opportunity to harness the United States’ innovation leadership and Europe’s regulatory power to set that agenda and ensure a more democratic future.

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