The concept of a functional transatlantic trade and technology council emerges

Three months into the Ukraine crisis, a sense of urgency has emerged, underscoring the need for meaningful transatlantic cooperation and collaboration. During the third week of May, at the end of the second Ministerial Meeting of the Trade and Technology Council (TTC) in Saclay on 15-16 May, a joint statement was issued identifying possible areas of cooperation within of the TTC that had been previously discussed. long in Pittsburgh.

Alleviation of pressure on the supply chain, export controls, investment screening, coordination of trade responses to non-trade policies and practices were highlighted. However, at the same time, concern was also noted with regard to other relevant dimensions, such as transatlantic collaboration on artificial intelligence management tools, digital transformation of SMEs and climate issues.

The key message of the second meeting of the TTC, however, is found in the remarks of the United States Trade Representative, Katherine Tai, who, after the ministerial meeting, reiterated that the use of the TTC as a framework for cooperation still seems to be only in its infancy and demands that the EU and the US continue their structuring effort in the near future and try to find the lowest common denominators and generate confidence regarding contentious areas that would overcome the challenges and directly connect the political communities on both sides of the Atlantic.

Initially, for the United States, the TTC was intended to contain China. The ambition of the EU, on the other hand, was to bring the United States closer to European values ​​in platform regulation and green transition and to overcome commercial irritants.

Their efforts, so far, had failed to uncover a common platform. Now, due to the evolving situation in Ukraine and the difficulties associated with NATO, the EU and the US seem to have found a common direction in the TTC and, perhaps, according to some analysts, ” more fundamentally, a sense of shared identity.”

Both sides of the Atlantic now believe that the best way for the West to tackle the authoritarian alternative would be to revive economic security cooperation at all levels. It is now agreed that technology and commerce are central to the future of liberal democracy because of their cumulative role in prosperity, security and sovereignty.

It may be recalled here that the EU and the US have worked quite well together on export controls over the past few months, but this has only been a promising start. This led this latest meeting to point out that despite signs of some success, it hasn’t been enough. This has led analysts to suggest that the work of the TTC now needs to be deepened and more concrete in the ten working groups.

It was pointed out that trade barriers, such as the tariff quotas that still prevail in steel and aluminum, prevent long-term investment decisions in Europe and the United States and indirectly contribute to their dependence on with respect to China. This has led strategic economic analysts to point out that Western supply chains will be more resilient if they are indeed greened with Western technology. In this context, achieving standards for trustworthy AI would fundamentally prevent the collapse of the Western economic, societal and democratic fabric. This is seen as a good step forward.

Annika Hedberg, Stefan Sipka, Guillaume Van der Loo, Frederico Mollet, Georg Riekeles, Andrea García Rodríguez, Simon Dekeyrel and Evin Jongen-Fay, who have all carefully followed the evolution of the chain of Western thought, underlined that the EU and the United States are both trying to bring transatlantic coherence to their domestic initiatives to increase supply chain resilience, particularly for semiconductors and raw materials. This is understandable as supply chains are deeply globalized, in most cases extending not only to EU-US jurisdictions, but also to other countries beyond their borders in different parts of the world, to the era of digitization.

The participants at this latest meeting also seem to have understood that international cooperation on supply chains is necessary if the momentum towards greater resilience is not to be rendered ineffective or counterproductive. At the same time, the connotation emerged from the discussion that, in this paradigm, concrete joint tools to actively manage supply chain risks with engagement are clearly still underdeveloped.

Some participants also seem to have drawn attention to the fact that there are a number of areas, such as clean technologies or semiconductors, where attempts at onshore production still create considerable tension between the EU and United States because of underlying protectionist policies. This scenario was a source of anxiety and eventually led the TTC to promise the development of joint tools to coordinate monitoring and information flows to avoid the build-up of bottlenecks, such as a pilot of early warning for semiconductors. Such coordination action could certainly help address the lack of transparency and information flow in the international private sector. However, it is not yet clear whether the new policy initiatives will remain primarily national.

Analysts carefully monitoring the various aspects associated with the TTC’s ambition on supply chains, standards, AI, 5G and 6G and other digital policies do so with caution. Some of them, associated with the European Policy Centre, noted that the joint statement “is essentially an ambitious statement of intent on strengthening information exchange and coordination in investment screening, areas such as ‘trade and labour’ and ‘trade and climate’, and ‘non-market policies and practices’ (referring to China) They agree, however, that the TTC currently focuses on non-tariff barriers, trade chains procurement, digital and regulatory issues, which for legal and political reasons are difficult to cover in binding treaties.

It was also pointed out that “sensitive business matters are largely left outside the scope of the TTC, including how to deal with remaining U.S. Section 232 duties on exports of steel and aluminum companies and the finalization of a new data transfer agreement” – associated with critical technologies. Nevertheless, some optimism has been generated by discussions on how to possibly avoid trade irritants, such as the EU’s many new and envisaged stand-alone trade measures covering government procurement, foreign subsidies, the adjustment mechanism carbon at borders or the fight against coercion. This has persuaded some to believe that frequent meetings of TTC working groups build trust and can lay the groundwork for sectoral agreements at bilateral or multilateral (WTO) level. Concrete deliverables are therefore expected for the next TTC meeting to be held in the United States in December 2022.

The latest meeting is also seen not only as an example of commitment to the principles of the Declaration for the Future of the Internet which will recognize the urgency of protecting a free and open cyberspace, but also the possibility that the EU and United States cooperate on the governance of new technologies and emerging technologies such as AI. By preventing trade disputes and reducing the risks of misuse of technologies, such cooperation will certainly stimulate research and innovation and contribute to closing innovation gaps on both sides of the Atlantic.

Annika Hedberg, Stefan Sipka, Guillaume Van der Loo, Frederico Mollet, Georg Riekeles, Andrea García Rodríguez, Simon Dekeyrel and Evin Jongen-Fay also noted that the joint statement “rightly recognizes the importance of the green transition and the roles trade and international cooperation to support climate action, address challenges related to biodiversity, environmental degradation and pollution, and enable the global transition to a circular economy.

Nevertheless, greater flexibility will be needed in the following two dimensions: (a) the recognition of solar energy as central to a western net-zero economy, which would reduce energy costs and increase energy security across the Atlantic. There must be more opportunities for cooperation to advance the transition to clean energy and the circular economy and also address supply chain challenges; (b) the envisaged EU-US food security collaboration could be aligned with long-term sustainability considerations. This will help reduce greenhouse gas emissions from the agricultural sector, halt biodiversity loss, ensure animal welfare and harness nature’s potential to support climate action.

This is a very difficult task that has been undertaken by the TTC. Nevertheless, he must pursue the desired course of action he has set and be ambitious to move forward.

Other developing and developed countries in Asia, Africa and Latin America believe that the TTC must overcome the diverse challenges it is committed to addressing and open up the possibility of new areas of collaboration.

The framework has begun to prove its ability to connect policy communities not only across the Atlantic but also across the world. Such coordination will prove essential long after the immediate geopolitical crisis is over.

Muhammad Zamir, former Ambassador, is an analyst specializing in foreign affairs, right to information and good governance, who can be reached at[email protected]

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