The EU-US Trade And Tech Council Sounds Fancy But, Really, What's The Point?

The next meeting of the EU-US Trade and Technology Council (TTC) will take place in Washington DC next week to discuss mutual approaches to trade issues and tech challenges, such as climate change and China.

The TTC was launched in 2021 to boost bilateral trade and strengthen transatlantic cooperation following years of mounting trade tensions. Previous meetings covered international standards, trustworthy AI, an early warning system for potential supply chain disruptions, and a joint approach to semiconductor investments.

One potential talking of the forthcoming TTC discussions could be the coordination of export restrictions to China, which saw ASML, the Dutch producer of photolithography kit for making chips, severely constrained in what it could sell to Chinese semiconductor companies.

Some critics, however, believe that the TTC is nothing more than an informal talking shop, with key decisions made elsewhere in alternative forums, and others believe it needs to be fully institutionalized as a proper mechanism for forming joint policies or face being cancelled.

The fifth summit, scheduled for December 2023, was officially postponed until January 30, reportedly because US Secretary of State Antony Blinken wanted to attend but was tied up with events elsewhere. According to Euractiv, this demonstrated how far "the initiative has slipped down the priority list on both sides of the pond."

Next week's event is perhaps "best viewed as a pitstop on the way to the next Trade and Technology Council gathering in Belgium later this spring," according to Politico. By that point, policymakers aim to conclude outstanding items like shared definitions and methodologies for AI and greater cooperation on social media governance, it claimed.

The TTC's tangible outputs remain minimal, according to a report from the Center for European Policy Analysis (CEPA), consisting mostly of a plethora of dialogues, principles, and roadmaps. Despite its name, CEPA is a think tank based in Washington that claims to be focused on "strengthening the transatlantic alliance".

CEPA claims the TTC lacks clear goals and suffers from a convoluted structure, with ten working groups debating topics from technical standards to green technology and global trade challenges.

• Korea passes tax break-driven 'Chips Act' as protectionism fears mount
• US and EU looking to create 'critical minerals club' to ensure their own supplies
• South Korea to offer tax breaks to hedge semiconductor woes
• EU-US Trade and Technology Council meets to coordinate on supply chains

The CEPA report suggests fewer, high-level groups dealing with geopolitical concerns, and moving technological issues to a separate low-level group. It also proposes annual rather than biannual meetings, and creating a secretariat or administrative body to make the TTC more "official."

Potential areas for discussion in this upcoming meeting next week could be increased alignment on policies regarding China, with CEPA noting that the European Commission is already considering import tariffs on Chinese electric vehicles to protect European car makers.

Also on the agenda could be talks for an agreement on critical minerals. Last year, a proposal for a "critical minerals club" between the US and Europe was floated to ensure supply of raw materials such as lithium, cobalt, nickel, and graphite for electric vehicles and other technologies.

This was possibly in response to threats from China to choke off the supply of various minerals used in electronics, of which the country is a major source.

However, there are areas of disagreement between Washington and Brussels that may be left off the table, such as Washington's subsidies for green technology like electric vehicles made in America as part of the Inflation Reduction Act, and attempts by the EU to regulate US tech companies.

The TTC has led to some successes, with US and EU semiconductor strategies proving complementary, CEPA claims. The EU is focusing public funds mostly on manufacturing basic chips to support local industries such as car makers, while the US is focused on cutting-edge semiconductors.

CEPA also warns that the entire TTC project could be under threat if it continues to show few results. A potential second Trump administration would likely prove even more protectionist and isolationist, and would likely cancel TTC. "Looming EU protectionism" could also see Brussels expand Europe's digital sovereignty agenda, it adds. ®