Pittsburgh Is Back!
The choice of Pittsburgh as the site of the inaugural Trade and Technology Council (TTC) meeting with the European Union was a tribute to the city’s ability to reinvent and revitalize itself following the decline of steel and other bedrock industries in the region. It has been a success story, but we should not forget it came with a cost: the loss of jobs and livelihoods and the associated dislocation for thousands of blue-collar workers. Working for Senator John Heinz throughout the 1980s, I witnessed the decline and, like him, was frustrated by our inability to reverse the trend. I can’t help but remember the losses while welcoming the gains.
Nevertheless, it was a good choice because the city typifies what both U.S. and European governments desire: resilient cities embracing change and creating new opportunities for their workers. With that inspiration, did the results of the meeting measure up?
I think the answer is that the leaders met the relatively low expectations for the first meeting, but they largely teed up commitments to cooperate that will only bear fruit if they are diligently pursued in subsequent sessions, both in the 10 working groups and in future full TTC meetings. Rather than boring you with a recitation of their agreements—the full statement can be found here—I want to comment on just two items.
First, one of the mysteries of the meeting, at least to me, was the relatively modest language on climate. For an issue that both sides claim is a top priority, it is surprising it was not more prominent. It will be interesting to see if this becomes a serious TTC issue or whether it is addressed in other venues.
Second, those who might have been hoping for a comprehensive approach to U.S.-EU trade will be disappointed. The parties intended a narrow focus, and they stuck to it. The European Union has argued that the discussions should avoid the “iron rice bowls” of the past—the long-standing and deeply held bits and pieces of protection that have divided us for years—in Europe, geographical indications, GMOs, and chickens, to name three; in the United States, the Jones Act, Buy America, and steel to name another three; plus numerous areas where our regulations differ even when they are pursuing the same goals. Some current issues, like the European Union’s General Data Protection Regulation and the U.S. steel tariffs, will be taken up in other fora. Others will simply remain unaddressed.
The idea was that concentrating on digital trade and new technology where there were not yet any iron rice bowls would increase prospects for success. However, that is a bit disingenuous on the European Union’s part. While there may not be any rice bowls currently, the European Union is busy building them via its Digital Services Act and Digital Markets Act and its proposed artificial intelligence (AI) regulation. The United States has failed to develop national policies in these areas and thus is going to find itself playing defense as the TTC working groups move forward. That is on us. If we don’t develop our own approach, the European Union’s will become the default for businesses all over the world.
Rob Atkinson, president of the Innovation Technology and Information Foundation (ITIF) and a participant in CSIS’s postmortem event on the TTC meeting, thinks—and articulates in a recent report—that a regulation-heavy outcome would be bad for U.S. companies and for innovation generally. Rather than seeking regulatory harmonization, which is probably an impossible goal anyway, he would prefer an approach that recognizes the differences in the way the United States and the European Union do things and permits each to go its own way, respecting each other’s rules.
This is a form of mutual recognition, which makes sense with tangible goods but may be more complicated when it comes to data. The example discussed at our event was the European Union’s “right to be forgotten,” which provides a process for an individual to demand internet service providers delete information about them. The United States does not provide that right, which means an individual might be “forgotten” in France but vividly remembered in the United States. If the European Union insists that principle be respected extraterritorially and seeks to control movement or storage of data to enforce it, then we have a problem. You can see a similar issue developing over our Constitution’s first amendment. We permit public expressions that are banned elsewhere as “hate speech.”
These are divisive issues, both between the United States and the European Union and within each. The meeting in Pittsburgh did not attempt to resolve them, but they will remain on the table and may prove impossible to solve between us just as we seem unable to resolve them amongst ourselves. The iron rice bowls may be lurking out there after all—we just haven’t noticed them yet.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
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