How Is the U.S. Cooperating with Its European Allies on Issues of Technology?

By: Gregory Arcuri

Russia’s revanchist aggression in Ukraine has shocked Europe, the United States, and the world. At the same time, it has breathed new life into the imperatives for a transatlantic partnership and the broader liberal-democratic order it represents.

One key area of added transatlantic cooperation lies with the newly established forum for negotiation on technology and innovation issues, the U.S.-E.U. Trade and Technology Council (TTC). However, while the newfound transatlantic unity provides a valuable opportunity for American and European leaders to cooperate through the TTC, some experts have expressed doubt that the TTC would succeed in solving long-standing disputes.

Existing Obstacles

Renewed liberal-democratic solidarity is not entirely a result of Russian president Vladimir Putin’s war in Ukraine. In fact, since the beginning of the Joe Biden presidency, the United States has sought to  repair the transatlantic relationship frayed by the policies of the Trump administration. Bart Gordon, former congressperson and current director of the Trans-Atlantic Business Council, described the new thrust as a “sea change.” Gordon noted that “the previous administration ... was looking for reasons to try to pick a fight, whereas in this administration, they’re looking for reasons to try to work together.” The Trade and Technology Council is one product of this shift, meant to bolster Western coordination on technology policy against growing assertiveness by some authoritarian regimes to control and exploit the potential of emerging technological domains.

However, even with a more amicable partner in the White House, relations between American and European leaders have had their bumps. In September 2021, just a week before U.S. and E.U. diplomats were scheduled to hold their first meeting of the TTC, the United States announced a new defense technology pact with the United Kingdom and Australia, known as AUKUS. This agreement scrapped a partnership that France had been cultivating with Australia, an action which French Foreign Minister Jean-Yves Le Drian described as “a stab in the back.” Since this dispute, France has been the most vocal detractor of holding talks on technology collaboration.

There have also been obstacles to cooperation on issues of data privacy. In recent years, the European Union has grown increasingly hawkish towards Big Tech companies. It has pressured the U.S. to adopt digital privacy and antitrust legislation in line with European standards to ensure the safe flow of European data across the Atlantic. Compromise here, however, has been slow to materialize, as many of the world’s largest tech firms are based in the United States and the U.S. has not yet reached a domestic consensus on regulating its tech sector.

Addressing many of these challenges in an interview with the Atlantic Council in September 2021, E.U. Commissioner for the Internal Market, Thierry Breton, a Frenchman, expressed with regret that “there is, indeed, growing feeling in Europe … that something is broken in our transatlantic relations.”

Promising Signs for Enhanced Cooperation

Optimism for meaningful cooperation, though, is still warranted. The TTC is the most promising forum for technology and innovation collaboration in recent memory. Launched in June 2021, the TTC’s explicit goal is “to lead global, like-minded [democratic] partners in promoting an open, interoperable, secure, and reliable digital space, and to remain leaders in developing and protecting tomorrow’s technology.”

Importantly, the Council’s agenda intentionally avoids topics of long-standing disagreement and tension between the U.S. and Europe (so-called “iron rice bowls”) which have doomed previous forums for negotiation, such as agricultural subsidies, the Boeing-Airbus dispute, and Trump-era steel and aluminum tariffs.

The Council established ten working groups to promote high-level dialogue on a variety of issues where collaboration appears possible, including:
 
  • Technology standards
  • Climate and green technology
  • Secure supply chains
  • Information and communications technology and services security and competitiveness
  • Data governance and tech platform regulation
  • Misuse of technology threatening security and human rights
  • Export controls
  • Investment screening
  • Promoting access to and use of digital technologies among small and medium enterprises
  • Global trade challenges

The Council’s first meeting in September 2021 led to a series of notable outcomes on issues where significant agreement already exists. For example, on the issue of the global semiconductor shortage, both sides are committed to “identify[ing] gaps in the semiconductor value chain” and enhancing their respective semiconductor ecosystems. The U.S. and Europe have already begun taking important steps towards this shared goal. Of note, the European Commission has drafted legislation to mobilize over €43 billion in public and private funds to double its share of the global semiconductor manufacturing market by 2030. Meanwhile, in the United States, lawmakers continue to debate the CHIPS for America Act and the FABS Act, which provide lump-sum and tax-based incentives for chip manufacturers to “onshore” their operations. While these appear to be self-serving initiatives, the two sides view them as critical to ensuring mutual resiliency in a critical strategic industry.

In artificial intelligence (AI), the U.S. and E.U. affirmed their commitment to responsibly developing AI which is used in a way that respects democratic values and universal human rights. The European Union has already proposed sweeping legislation, known as the AI Act, which would serve as the first comprehensive law on artificial intelligence use and development worldwide. While the U.S. has no similar legislation making its way through Congress, the White House has established several bilateral initiatives through U.S. embassies and federal agencies with European partners to promote “democracy-affirming technologies” and responsible artificial intelligence and machine learning.

The next TTC meeting is scheduled for May 15-16, 2022, and this event will be the first dialogue since the Russian invasion, providing the TTC with a sense of urgency and seriousness that some analysts suggest might instill a spirit of compromise. Already on March 25, the President of the European Commission Ursula von der Leyen released a joint statement with President Biden announcing “an agreement in principle on a new framework for transatlantic data flows,” an agreement that the TTC will likely be tasked with fleshing out. Kenneth Propp with the Atlantic Council argues that this could mean a softening of Europe’s position on the issue of data privacy, acknowledging that the biggest threat to European data security is Russia, not U.S. tech companies. This could represent a significant breakthrough in cooperation on an issue where the two sides have struggled to find common ground, possibly heralding a wave of collaborative activity across a variety of other domains as well.

Putin’s wanton aggression in Ukraine has united a previously fractured Western world in a way that appeared impossible just months ago. The May meeting of the TTC provides a chance to build upon previous points of compromise. The United States and its European allies have a remarkable opportunity to harness the current political momentum to forge cooperation in securing their shared leadership in the technologies of the future.

Gregory Arcuri is a research intern with the Center for Strategic and International Studies in Washington, DC.

The Perspectives on Innovation Blog is produced by the Renewing American Innovation Project at the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).  
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Gregory Arcuri
Research Assistant, Renewing American Innovation Project