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Activists may have thought the politically explosive Transatlantic Trade and Investment Partnership (TTIP) negotiations between Europe and America were dead and buried.
But one of the most important elements of those talks, which collapsed in 2016, is back from the grave: regulatory alignment between Washington and Brussels.
The first meeting of the Trade and Tech Council (TTC) in Pittsburgh on September 29 is intended to build a diplomatic platform for the European Union and the United States to work together on industrial and tech standards to counter China’s rise in sectors ranging from microchips and robots to artificial intelligence and the alleged antitrust abuses of Google and Amazon.
The attempt to build a common U.S.-EU front could hardly come at a more sensitive moment politically, as the American retreat from Afghanistan has blown a hole in European faith in the administration of U.S. President Joe Biden. Many in Brussels feel let down by Washington’s retreat from that country, while many in the U.S. capital believe EU countries did not pull their weight during the 20-year war.
“You can not discuss the Trade and Tech Council, and transatlantic trade relations overall, without Afghanistan in the back of your mind,” said one EU trade diplomat who spoke on the condition of anonymity because the ongoing talks are private. “The trust is gone, and that has to be rebuilt one step at a time.”
The two sides may not find themselves perfectly aligned against the common Chinese foe, however.
Brussels had originally hoped to pressure the Americans into following Brussels’ regulatory line on tech and trade, building on more than a decade of digital policymaking that spanned competition enforcement to global privacy rules. But now, the big fear among European officials is that the EU could well come off second best in this process and cede power to the U.S. after Washington flexed its muscles in early-stage talks around the upcoming trade and tech summit to focus on priorities for Biden’s administration.
TTIP through the back door?
The TTIP negotiations are mostly remembered for protests about hormone-treated beef and chemically-rinsed poultry but the major benefits of TTIP lay precisely in bringing together conflicting EU-U.S. regulations. At the time, Brussels described this part of TTIP as a „regulatory cooperation body“ and said that it could look at sectors such as data and cybersecurity.
Washington and Brussels now want to target those regulatory benefits again. “That sounds extremely boring and technical, but there’s a lot of money in having different standards. So this has the support from business from both sides,” former EU trade chief Cecilia Malmström told POLITICO earlier this year. Ten working groups — on everything from global trade standards to how to deal with online platforms — are expected to hammer out how such joint transatlantic policymaking could work in practice.
This time around, it’s not just car seatbelts or pharmaceuticals. The discussions focus on critical emerging technologies like artificial intelligence, semiconductors and data governance.
By doing so, the Europeans and Americans want to hit back at Beijing’s rise as a tech superpower as it has set its sights on becoming the digital standard setter for future industries. “Setting the rules of the world can not be left to autocratic governments,” U.S. Secretary of Commerce Gina Raimondo told the Tallinn Digital Summit this week, repeatedly referring to the U.S. and EU as having „shared values.“
Both sides also want to make commitments to police the digital world more effectively. They will discuss data governance and tech platform regulation, including how the EU’s Digital Markets Act could overlap with plans from the U.S. Congress on new antitrust proposals. While U.S. policymakers are reluctant to go as far as Europe in policing Big Tech, Washington has become more skeptical over the role of companies like Google and Amazon.
Brussels and Washington are both eager for quick wins to avoid the TTC facing the same fate as earlier similar initiatives, such as the Transatlantic Economic Council, an initiative to reignite transatlantic trade ties launched in 2007 that eventually fizzled out after EU and U.S. officials could not find common ground on even the most basic of principles.
“We could talk a great length about our shared values, and we should do that … but I think our job is to identify a few specific areas of engagement and then a few specific concrete outcomes,” said Raimondo. “You develop the muscle for solving problems by solving problems.”
To achieve that goal, the EU and U.S. are looking toward greater cooperation around supply chains, most notably semiconductor production, according to people with direct knowledge of the talks. Both the U.S. and the EU have announced plans to bring semiconductor manufacturing back home, and the hope is to allow U.S. firms to participate in Europe’s efforts, and vice versa with EU chipmakers.
But the problem with locking down deliverables at the first meeting, officials and diplomats say, is that the Trade and Tech Council was set up as a very broad partnership, with some of the working groups having names as vague as “global trade challenges.” Notably, Dan Mullaney from the U.S. Trade Representative and DG Trade’s Ignacio García Bercero, who will co-chair that TTC group, were the point men on the failed TTIP talks.
The broad scope also set in motion internal divisions on both sides of the Atlantic about the goal of the TTC.
In Washington, the Department of Commerce and the State Department want different things from the discussions, even though the competencies of State on these issues are limited, while the trade agency USTR risks getting cut out. In Brussels, the antitrust department is also being squeezed, as the regulation for digital platforms is not in their hands, while the trade department and digital department are vying for control.
No torpedoes please
To complicate things even further, transatlantic feuds in both trade and tech are looming over the discussions.
On the trade front, Brussels and Washington set themselves a December 1 deadline to deescalate their spat over steel and aluminum tariffs. Donald Trump had imposed the levies using a provision known as Section 232 that allows Washington to impose tariffs if cheap foreign imports endanger national security. Lifting the tariffs is a domestic political headache for Biden.
As far as tech policy goes, Washington is trying to piggyback a renewed transatlantic data transfer deal onto TTC, after a failed attempt to do so at the EU-U.S. summit in June. EU officials said the U.S. side had understood that including data flows across the Atlantic could torpedo political goodwill because Brussels remains cautious that Washington’s efforts to make a deal happen will withstand a likely challenge in the bloc’s highest court. Still, Raimondo continues to mention the data transfer deal as part of the talks, which ruffled feathers with some of her EU counterparts, according to two officials with direct knowledge of the matter.
On top of that, the U.S. decision to leave Kabul has EU capitals worried that Biden will not turn the degradation of the Western alliance around.
“Some member states are disappointed,” Anthony Gardner, the former U.S. ambassador to the EU, said. “They felt the U.S. was taking decisions for its own domestic purposes and didn’t give sufficient attention to allies. So those frictions over Afghanistan might spill over in the willingness to cooperate and focus on the Chinese challenge.”
At the same time, there is political will on both sides to move things forward. While Washington was skeptical to get on board at first, Brussels now feels that sentiment has changed. EU officials see the involvement of Secretary of State Antony Blinken as a sign of how serious Washington is taking the talks.
“This should succeed,” Gardner said. “But with the German and French elections and the U.S. midterms, there are a lot of shifting pieces on the board.”
Jakob Hanke and Sarah Anne Aarup contributed reporting.
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