EU-US Tech Allies: No more ''business as usual” - redefining the transatlantic trade relationship

The transatlantic relationship is “the biggest and most economically significant partnership in the world”; both Presidents Biden and von der Leyen committed in March 2021 to “repair and revitalise the U.S.-EU partnership.” However, challenges such as tariff disputes, digital tax and WTO reform still loom large, meaning Brussels and Washington must work together on redefining the transatlantic trade relationship, rather than a return to “business as usual.”

Europe has proposed the EU-US Trade and Technology Council (TTC) as the key forum if the ambition of a transatlantic technology alliance is to be met. In the first of our EU-US Tech Allies event series, DIGITALEUROPE brought together decision-makers to discuss the prospects for establishing the TTC, and how it could ensure that the EU and US lead the global challenge of post-Covid recovery.

Speakers:

• Alexandra Whittaker, Chief Trade Counsel at the US House Ways and Means Committee
• Bernd Lange, Member of European Parliament, Chair of INTA Committee
• Pastora Valero, Vice President, Government Affairs and Public Policy, EMEAR, CISCO and Executive Board Member, DIGITALEUROPE
• John Neuffer, President & CEO, Semiconductor Industry Association
• Wolfgang Weber, CEO, ZVEI

The debate was moderated by Cecilia Bonefeld-Dahl, Director General, DIGITALEUROPE.

Relaunching the relationship through the Trade and Technology Council

With a new administration in place in the United States – and the EU having recently published its “Open, Sustainable and Assertive” trade strategy – there was an agreement that the time is right to relaunch the transatlantic relationship.

Moreover, the need to harness digital to drive economic recovery has never been clearer as we look to a post-Covid global economy. The proposed EU-US Trade and Technology Council can play a crucial role here.

Wolfgang Weber (CEO, ZVEI) welcomed the move on both sides of the Atlantic to drive a new conversation on trade, including the participation of industry, and highlighted the need to deal quickly with existing problems such as the tariffs on steel and aluminium, while also looking to the future.

The TTC proposal has garnered attention from industry and policymakers alike, and there is excitement about the possibility to drive collaboration in areas such as export controls, standards, cybersecurity, regulation on emerging technologies such as AI and, of course, data flows.

There is a window of opportunity in that both partners are faced with the need to regulate and drive investment on a number of issues, especially in the areas of climate and digital transformation.

However, participants also stressed that it is crucial to make sure that the right conditions are created for the TTC to be effective, and that means dealing first and foremost with existing irritants in the transatlantic context.

The cooperative approach on the Airbus-Boeing tariff dispute offers some guidance here, and dialogue on topics such as Digital Services Taxes will be essential.

In short, it can be said that a new US Administration does not mean that all problems have disappeared, and building a strong foundation for transatlantic cooperation also means addressing pending issues.

Setting an inclusive agenda with digital at its centre

Considering the specific challenges posed by digital transformation, and with the US now focused on rooting trade policies in equity, setting the agenda for EU-US partnership on trade must be an inclusive process. This is a question of considering the domestic impacts of trade policy across society and the economy. Indeed, digital industries have a particularly important part to play here.

As Pastora Valero (Cisco) noted, companies operating in the EU and the US can contribute to this inclusive trade agenda that harnesses the power of digital.

It is clear that the EU regulatory perspective – with risk-based frameworks on emerging tech that put people first – and the equity-focused US trade policy approach compliment one another.

With a common sense approach, these shared values can be translated into effective joint action. This is particularly important in the digital sphere in terms of the enabling power of tech – something that can both address the climate challengeand bridge the digital divide in our societies.

But it is not only about regulatory cooperation, speakers cautioned: we also need to strengthen capacities in key supply chains such as semiconductors – in particular, the EU and the US should intensify collaboration on chip production and design, and research and development.

Tech Allies on the global stage

Relaunching the EU-US relationship must be a priority. Not just because of its bilateral significance, but also because of the capacity of both partners to drive changes at the global level, especially through the World Trade Organization.

MEP Bernd Lange (Chair of the Committee on International Trade, and rapporteur on EU-US relations) pointed to WTO-level cooperation as one of the areas where EU-US cooperation will improve dramatically in comparison to the last Administration.

Mr Lange also underlined the need to address the role of China in the global economy and within the WTO itself. Indeed, readdressing structural issues in such economies goes hand-in-hand with reform of the WTO and the launching of new initiatives. Here it was stressed that the EU and the US should also continue to work with Japan in trilateral work on new subsidies disciplines, in particular.

Importantly, there is also a positive agenda, especially on eCommerce (and by extension, data flows) and trade in environmental goods. Expansion of the ITA is another item high on the agenda, as underlined by John Neuffer (CEO, Semiconductor Industry Association).

Establishing the New Transatlantic Agenda

Given the current window of opportunity, there was a strong consensus that industry should be open to organising a productive dialogue with the right stakeholders.

In a similar light, it is of utmost importance to bring the concerns of industry straight to policymakers; both EU and US policy must reflect the people they serve and address structural issues.

Because the threats to the digital economy is global, the need to colloborate and find a common mindset it is only fitting.

Speakers made it clear that they want to make the future generation digital natives – and want trade to be part of that framework.

When pursuing equal benefits and equal protections in EU and US, the current momentum in EU-US relations should be driven by an ambitious partnership at the multilateral level.