Tyson Barker is director of the Technology and Global Affairs Program at the German Council on Foreign Relations (DGAP). He previously worked at Aspen Germany, where, as deputy executive director and fellow, he was responsible for the institute's digital and transatlantic programs. Prior to that, Barker held numerous positions, including Senior Advisor at the US Department of State's Bureau of European and Eurasian Affairs.
On September 29-30, at a converted steel mill in Pittsburgh that now serves as an accelerator, three senior Biden cabinet members and two senior EU officials met to launch the Trade and Technology Council (TTC) between the United States and the EU. The TTC, if it takes root, could be a Euro-Atlantic answer to the Quad in the Indo-Pacific: an embryonic technological alliance and a building block for a new democratic technological arrangement.
Looking at the nexus between technology and foreign policy in political Washington, all eyes seem to be on the Indo-Pacific, particularly China. But in software and hardware data, the US-EU relationship remains an equally important technology corridor, if not more so. To analyze it comparatively, the data transfers Euro-Atlantic countries are 55% larger than those of the US and Asia.
With the TTC, the Euro-Atlantic partnership gets a strategic place to take advantage of this massive and democratic digital corridor, particularly in view of the global geotechnological race in which the US, China and the EU are the three main players.
Pittsburgh's 17-page declaration on the TTC outlines a roadmap for future work and a set of working groups addressing critical issues such as technical standards, secure supply chains, data governance, foreign investment screening (FDI), green technology, misuse of technology in human rights, abuses and open economies.
While the word China does not appear, the joint statement is riddled with language about "non-market economies," "civil-military fusion," and the use of "social punctuation" by "authoritarian governments," all of which make a veiled reference to China.
Main responsibilities of the TTC
1.- Standards
First, the US and the EU are rethinking their approach to technical standards. A message that has been circulating in China holds that "third-tier companies make products, second-tier companies make technology, first-tier companies create standards." Those of the first level are those linked or intervened politically. In September, the Chinese government published its Standards Strategy focused on further internationalization of Chinese technical standards, accelerating standards adoption, and increased efforts by the private sector in standards development.
The US and the EU have taken note of how regulations can be instrumentalized for geopolitical purposes. The United States and the EU increasingly recognize that their model of allowing the private sector to set standards has meant losing ground as companies adjacent to the Chinese Communist Party (CCP) colonized standards-setting bodies like the International Organization for Standardization ( ISO) or the International Telecommunications Union (ITU).
In light of China's aggressive moves internationally, the two sides have revived dialogue between the National Institute of Standards and Technology (NIST), the US agency in charge of technical standards, and their EU counterparts. Both want to use the TTC to coordinate their regulation and standard setting strategies, including how they work with the private sector.
2.- Supply chains
Second, COVID disruptions and US-China tech tensions demonstrated the vulnerability of Euro-Atlantic technology supply chains, particularly in semiconductors given the use of entity list restrictions and the chip champion's precarious situation. from Taiwan, TSMC. In the United States the chip manufacturing quota it has fallen from 37% in 1990 to 12% in 2020. The EU has seen an even more dramatic decline, from 44% in 1990 to 8% today. Both Washington and Brussels are committed to reversing that trend. Congress recently passed the $52 billion CHIPS Act and the upcoming European Chip Act could tap into the €93 billion Horizon Europe fund, the EU's €750 billion post-COVID recovery fund and national semiconductor industry efforts in a coordinated manner.
But while this may have raised fears of competitive industrial policies in the past, both European Commission Executive Vice President Margrethe Vestager and US Commerce Secretary Gina Raimondo highlighted in Pittsburgh a desire to "avoid a race of subsidies» in technology. Indeed, the TTC's “dedicated semiconductor track” in the “medium to long term” provides a hint for a more ambitious joint agenda to work together on high-end semiconductor production. Everything indicates that they should be coordinated and the Pittsburgh declaration emphasized that it should be “balanced and of equal interest to both parties”. It is easy to imagine a transatlantic consortium with a "Mega-Fab" project, the largest project in Europe.
3.- Import and Investment Controls
Third, in the wake of restrictions on Huawei 5G equipment, new revelations about Xiaomi phone censorship in Lithuania, and massive purchases by companies like Tencent in Europe, both sides are taking a hard look at how they manage foreign flows of critical technology. . Levers like export controls and reliable suppliers are up for debate. In the past, the EU and the US have implemented export controls in traditional aspects: nuclear, chemical and biological, but also increasingly in cyber.
Recent developments have created new challenges in the governance of digital spaces, particularly around the selection of reliable investments and providers. Regulators are also concerned with how to preserve democratic data spaces and protect research and intellectual property in areas like AI, semiconductors, 5G, gaming, AR/VR technology, and perhaps even digital services and smartphones. It will be increasingly important for US agencies like the Bureau of Industry and Security (BIS) and the Committee on Foreign Investment in the US (CFIUS) to create channels for intelligence sharing with their European counterparts as member states of the EU expand restrictions on market access and detection. capabilities.
Obstacles in the Application of the TTC
If it works, the TTC could be the apparatus through which the US and EU write the global rulebook that governs technology companies. In recent years, the EU has felt compelled to act on its own in regulating digital technology, taking the lead in areas such as data protection, content moderation and the market power of online platforms.
While some in Washington see Europe's efforts in the face of a lack of meaningful regulation in the US (Washington has been perceived as completely absent from tech foreign policy in the Trump years and captured by Big Tech in the Obama years) , this so-called "Brussels Effect" also creates some tension, particularly on data flows and the future of digital antitrust laws.
Free data flows across the Atlantic are left in limbo after a 2020 GDPR-based court ruling invalidated the Privacy Shield, the main “passport” for European personal data in the United States. On the antitrust side, major players like Meta (Facebook), Amazon, Google and Apple are fighting to water down the EU's signature law against online platforms' market dominance. The Biden administration itself has yet to establish a clear position.
More generally, many Europeans remain skeptical of the United States as a partner. The Snowden affair (which revealed the NSA's widespread hacking of European leaders), the 2016 Trump election, the Cambridge Analytics scandal, and more recently the Facebook documents have led not only to geopolitical distancing, but also digital, in the Euro-Atlantic relationship. At a recent German Council on Foreign Relations, in a poll, 92,7% of Europeans believe that Europe relies too much on US companies for cloud computing, 79,8% for AI and 54,1% for high-performance computing. 54% of European stakeholders say they would like to remain independent in a technology confrontation between the US and China, while 46% would like to move closer to the US.
Meanwhile, there is the question of whether Europe's two key powers, France and Germany, are at odds over the TTC. Both France and Germany's support for the idea of “technological sovereignty” in recent years raises the question of how closely Europe's major powers are really aligned on the success of the TTC.
The transatlantic relationship was built in the industrial age of coal and steel; now, in the digital age of semiconductors and artificial intelligence, the TTC is a bridge to ensure that the Euro-Atlantic alliance can deal with the rise of techno-authoritarianism around the world. Both sides understand it. Perhaps this is what worries the most.
