Last month, the U.S.-EU Trade and Technology Council (TTC) met in Paris-Saclay for the second time since its launch in June 2021. (The first ministerial took place in Pittsburgh in September. France hosted this session as holder of the rotating presidency of the Council of the EU.) The meeting was co-chaired by Secretary of State Blinken, Secretary of Commerce Raimondo, and U.S. Trade Representative Tai, and European Commission Executive Vice Presidents Vestager and Dombrovskis. European Commissioner Breton also joined the discussions and the French ministers for foreign affairs, economy, and trade (Le Drian, Le Maire, and Riester) hosted the opening dinner.

The TTC is a new model of economic integration through regulatory coordination. Although both sides reserve their “regulatory autonomy,” they have also invested significant political capital, time, and effort into this process. The TTC spans broad policy areas including tech standards, climate, supply chains, export controls, and investment screening. It operates through ten working groups, which meet at staff working levels and seek input from outside stakeholders. For instance, the European Commission sponsors a “Trade and Technology Dialogue” facility to conduct outreach to the private sector and civil society. Through this technical work, the TTC’s aim is to shape the “rules of the road” for the global economy to favor liberal democracies, leveraging the transatlantic community’s half of global GDP. The ministerials set the themes and political direction for the working groups.

Against the backdrop of Russia’s ongoing aggression against Ukraine, the U.S. and EU noted that the TTC has become a “central pillar” of the transatlantic partnership, “indispensable” in facilitating coordination on sanctions and export controls. It will serve as a forum to monitor and discuss the Russia sanctions and may coordinate their eventual removal. Indeed, the TTC has arguably become more of a geopolitical tool than originally intended. Its 48-page joint statement reflects the breadth and depth of the underlying discussions and signals various future policy directions.

Tech Outcomes

Tech policy is at the forefront of the TTC’s discussions, perhaps even more so than trade. The Paris ministerial launched a new subgroup on Artificial Intelligence to help develop standards for “trustworthy AI,” which is at the core of the European Commission’s proposed regulation on AI. The subgroup will seek to develop a “joint roadmap on evaluation and measurement tools for trustworthy AI and risk management.” Given that the two sides currently have somewhat different approaches on AI regulation, this subgroup’s work will be important in shaping policy in this area.

The TTC also launched a U.S.-EU Strategic Standardisation Information (SSI) mechanism to facilitate information-sharing on international standards development. As noted above, the overarching aim is to shape international tech rules to advance U.S. and EU values and interests, rather than those of authoritarian actors, such as Russia or China. To this end, the two sides committed to collaborate in international standards institutions.

The two sides also emphasized the need for resilient supply chains, particularly in the area of semiconductors, and resolved to coordinate policy to avoid subsidy races. For instance, the TTC noted shared risks in the rare earth magnets supply chain and exchanged thoughts on how to mitigate these. Similarly, it discussed vulnerabilities of the critical medicines supply chain.

The parties also discussed content moderation, disinformation, emerging technologies, as well as a U.S.-EU guide to cybersecurity best practices for small- and medium-sized companies.

Trade Outcomes

In the area of trade, the TTC discussed both restrictive and facilitating measures.

To penalize Russia’s aggression against Ukraine, the EU and U.S. resolved to further a range of sanctions. They also agreed to deepen their exchange of information regarding exports of critical technology to Russia, as well as other malevolent actors, in an effort to restrict authoritarian countries’ access to such technology. To address the looming food crisis, the TTC launched a policy dialogue to develop solutions to mitigate the consequences of food shortage and to provide support to affected third countries. The parties also agreed to reduce unnecessary barriers to trade and investment.

One new issue addressed by the TTC is labor. The two sides launched a tripartite “Trade and Labor Dialogue” among the EU and U.S., trade unions, and businesses to promote internationally-recognized labor rights with the aim of ending illegal practices such as forced and child labor.

The TTC also discussed further measures to improve trade both between themselves and with third countries. To that end, the U.S. and EU agreed to establish an early alert dialogue regarding trade issues with third countries. The dialogue will allow both parties to consult each other at the earliest stage and preempt the establishment of trade barriers that may harm the U.S., EU, or both. However, there are no current signs that the TTC will mark the beginning of a new U.S.-EU trade agreement, as the talks do not cover issues such as market access.

The co-chairs also highlighted the need to reform the WTO in an effort to create an effective and resilient global trading system. In light of the WTO’s 12th Ministerial Conference planned for mid-June, and with the cooperation of allies outside the TTC such as Japan, the U.S. and EU hope to establish a structure capable of countering trade-distortive nonmarket practices and to develop the rules and enforcement tools necessary to counter these. However, the trilateral talks among the U.S., EU, and Japan on reforming WTO rules on subsidies that had run since 2017 have not resumed under the Biden administration. And while concrete steps on WTO reform are unlikely in the near-term, the TTC may serve as a useful forum to prepare these measures.

China

China was barely mentioned in the Paris-Saclay ministerial conclusions, but is always in the background of the TTC’s deliberations. In particular, cooperation on non-market behavior is an important part of the transatlantic agenda. The EU and U.S. have also discussed coordinating on measures targeting China’s violation of labor rights in the Xinjiang province. Transatlantic cooperation on export control and investment screening is also part of this joint approach toward China.

Next Steps

The TTC’s activities now return to the staff level to implement this political direction across the ten working groups. The next ministerial will take place in the United States before the end of 2022.

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Cecilia Malmström

Cecilia Malmström is a senior advisor in the firm’s Brussels office. She has devoted the better part of her career to global affairs and international relations and has extensive experience with multilateral leadership and cooperation. Cecilia, a non-lawyer, served as European commissioner for…

Cecilia Malmström is a senior advisor in the firm’s Brussels office. She has devoted the better part of her career to global affairs and international relations and has extensive experience with multilateral leadership and cooperation. Cecilia, a non-lawyer, served as European commissioner for trade from 2014 to 2019 and as European commissioner for home affairs from 2010 to 2014. She was first elected as a member of the European Parliament in 1999, serving until 2006, and was minister for EU affairs in the Swedish government from 2006 to 2010.

As European commissioner for trade, Cecilia represented the European Union in the World Trade Organization (WTO) and other international trade bodies. She was responsible for negotiating bilateral trade agreements with key countries, including agreements with Canada, Japan, Mexico, Singapore, Vietnam, and the four founding Mercosur countries.

Cecilia holds a Ph.D. in political science from the department of political science of the University of Gothenburg.

Photo of Bart Szewczyk Bart Szewczyk

Having served in senior advisory positions in the U.S. government, Bart Szewczyk advises on European and global public policy, particularly on technology, trade and foreign investment, business and human rights, and environmental, social, and governance issues, as well as conducts international arbitration. He…

Having served in senior advisory positions in the U.S. government, Bart Szewczyk advises on European and global public policy, particularly on technology, trade and foreign investment, business and human rights, and environmental, social, and governance issues, as well as conducts international arbitration. He also teaches grand strategy as an Adjunct Professor at Sciences Po in Paris and is a Nonresident Senior Fellow at the German Marshall Fund.

Bart recently worked as Advisor on Global Affairs at the European Commission’s think-tank, where he covered a wide range of foreign policy issues, including international order, defense, geoeconomics, transatlantic relations, Russia and Eastern Europe, Middle East and North Africa, and China and Asia. Previously, between 2014 and 2017, he served as Member of Secretary John Kerry’s Policy Planning Staff at the U.S. Department of State, where he covered Europe, Eurasia, and global economic affairs. From 2016 to 2017, he also concurrently served as Senior Policy Advisor to the U.S. Ambassador to the United Nations, Samantha Power, where he worked on refugee policy. He joined the U.S. government from teaching at Columbia Law School, as one of two academics selected nationwide for the Council on Foreign Relations International Affairs Fellowship. He has also consulted for the World Bank and Rasmussen Global.

Prior to government, Bart was an Associate Research Scholar and Lecturer-in-Law at Columbia Law School, where he worked on international law and U.S. foreign relations law. Before academia, he taught international law and international organizations at George Washington University Law School, and served as a visiting fellow at the EU Institute for Security Studies. He also clerked at the International Court of Justice for Judges Peter Tomka and Christopher Greenwood and at the U.S. Court of Appeals for the Third Circuit for the late Judge Leonard Garth..

Bart holds a Ph.D. from Cambridge University where he studied as a Gates Scholar, a J.D. from Yale Law School, an M.P.A. from Princeton University, and a B.S. in economics (summa cum laude) from The Wharton School at the University of Pennsylvania. He has published in Foreign AffairsForeign PolicyHarvard International Law JournalColumbia Journal of European LawAmerican Journal of International LawGeorge Washington Law ReviewSurvival, and elsewhere. He is the author of three books: Europe’s Grand Strategy: Navigating a New World Order (Palgrave Macmillan 2021); with David McKean, Partners of First Resort: America, Europe, and the Future of the West (Brookings Institution Press 2021); and European Sovereignty, Legitimacy, and Power (Routledge 2021).

Photo of Atli Stannard Atli Stannard

Atli Stannard has broad experience related to genomics, distributed ledger technology (blockchain), tax, and trade policy issues.

Mr. Stannard has particular experience in EU trade policy and regularly advises on EU market access and customs classification issues. He has assisted a number of…

Atli Stannard has broad experience related to genomics, distributed ledger technology (blockchain), tax, and trade policy issues.

Mr. Stannard has particular experience in EU trade policy and regularly advises on EU market access and customs classification issues. He has assisted a number of clients affected by EU trade policy developments relating to the imposition of U.S. tariffs, and the potential disruption of Europe-wide supply chains due to Brexit.

Mr. Stannard also advises clients on developments in EU policy and regulatory action relevant to genomics (the in vitro diagnostic medical devices regulation, data protection and data transfer, provision through national health systems), and technology clients on EU and international regulatory initiatives on Blockchain. His practice also encompasses EU tax policymaking, and he has advised clients on the EU Digital Services Tax proposals.