Transatlantic Trade and Technology: Partners or Rivals?
25 January 2024
After years of mounting trade tensions and a tumultuous Trump presidency, new administrations came to power in both Brussels and Washington determined to work together. In 2021, they launched the EU-US Trade and Technology Council (TTC), promising to boost bilateral trade and strengthen cooperation on pressing technological challenges. since the TTC was launched with fanfare in Pittsburgh, the forum has helped foster the revival of transatlantic purpose, first by combatting Russia’s invasion of Ukraine and second by agreeing on the need to “derisk” rather than “decouple” from China.
Entering 2024, however, challenges are mounting. The two sides are sparring over clean technology subsidies and moving at different speeds on tech regulation. Europe pursues a “digital sovereignty” agenda that discriminates against leading US tech companies. The US invests in a new industrial policy, offering billions of subsidies to bring home high-tech manufacturing. Elections scheduled before the year-end on both sides of the Atlantic could prove divisive, particularly if isolationist leaders come to power in Washington.
The TTC can help reduce the risks — if reformed and strengthened. The forum must be streamlined and tasked with a few realistic yet ambitious goals. It should engage a broad range of stakeholders, with the participation of the European Parliament, the US Congress, and high-level business leaders.
On substance, the TTC must align the two powers on tough issues, not shy away from disagreement. It represents an ideal platform to forge a common position on how to “derisk” from China, create a new transatlantic green tech alliance that limits domestic subsidies to clean technologies, and construct a common semiconductor supply chain. Despite their divergent domestic approaches to regulating artificial intelligence, the US and the EU still can construct guardrails ensuring safe use of the breakthrough technology.
This paper is based on a careful review of official documents and more than a dozen interviews with officials, analysts, and business representatives in both Brussels and Washington. The interviews were conducted on Chatham House background rules, to allow for honest discussion. By bringing together the Brussels-based Wilfried Martens Centre for European Studies and the Washington-based Center for European Policy Analysis, our goal was to understand, synthesize, encourage, and improve this promising joint endeavor.
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