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New Atlanticist February 22, 2024

The US-EU Trade and Technology Council has been a success. Now build on that success.

By L. Daniel Mullaney

Two and a half years ago, officials from the United States and the European Union (EU) met in Pittsburgh for the inaugural session of the US-EU Trade and Technology Council (TTC). Their aim was to “coordinate approaches to key global technology, economic, and trade issues and to deepen transatlantic trade and economic relations, basing policies in shared democratic values.” Four additional TTC meetings followed in Europe and the United States, and a sixth will take place in April in Belgium. At this meeting, the co-chairs will have an opportunity to consider some of the lessons learned since the first meeting in 2021. While in most respects the TTC has been a success, there are several ways in which it could now be made even better.

Specifically, the TTC should incorporate a trade agreement framework informed by regular formalized stakeholder input. This framework would focus on (1) avoiding the full range of trade barriers arising from new technologies and (2) tailoring cooperative efforts in a way that allows the United States and the EU to promote their shared values globally and prevents small disagreements from impeding progress. Significantly, a trade agreement foundation for trade and technology cooperation would create huge efficiencies and go a long way toward ensuring US-EU engagement on issues of common interest from administration to administration and from commission to commission.

This recommendation is based on the following elements:

Break down the artificial divide between trade and technology

Let’s start with some basics. One of the original reasons for creating the TTC was to head off unnecessary trade barriers arising from new technologies and diverging efforts to regulate them. Legacy trade barriers coming from deeply entrenched US-EU regulatory divides had proven extraordinarily difficult to bridge. Think, for example, of biotech food, hormone-treated beef, pathogen reduction treatments for poultry (the infamous “chlorine chicken”), and conflicting standards on a wide range of industrial products. 

One of the main ideas behind the TTC was to get ahead of the curve and avoid the new-tech version of “chlorine chicken”—that is, to identify and prevent unnecessary trade barriers to products of new technologies from arising in the first place. Another related goal was to ensure that the United States and the EU could globally promote trade rules on products of new technologies that reflect their joint values of transparency, the rule of law, human rights, and high labor standards. 

As the TTC has proceeded, however, the tendency in the public narrative has been to create an artificial divide between “technology” and “trade.” This has led to a deeply unhelpful but persistent narrative that the TTC is making good progress on “technology” but is lagging on “trade.” What is probably meant by this is that officials are having useful discussions on initiatives such as an artificial intelligence (AI) roadmap, but that they haven’t resolved long-standing bilateral disagreements over, for instance, bilateral mutual recognition agreements on pharmaceuticals or machinery.

Of course, the officials haven’t: The TTC never set out to provide additional leverage to resolve such deep, long-standing divides, so it makes no sense to judge its success on that basis. (A comprehensive agreement negotiation would do that, but that’s another topic.) It’s not an accident that long-standing disputes such as hormones in beef or pathogen-reduction treatments for poultry have not been on the TTC’s agenda.

To illustrate the problem, treating AI or other new technology product standards as a distinct category from “trade” ignores the fact that having two sets of standards that conflict with each other unnecessarily represents the ultimate trade barrier. 

The TTC would benefit from getting back to one of its original goals: avoiding unnecessary bilateral barriers to trade in new technologies, and collaboratively promoting a joint vision of how such products should be regulated on a global basis. This includes early bilateral engagement on proposed legislation—which is where trade barriers often arise.

Sharpen the TTC’s focus on specific common trade goals

Old habits die hard. When the United States and the EU sit down together on trade issues, it’s hard to avoid complaining about what the other side has done or pressing the other side to do something it doesn’t have an interest in doing. This is not to minimize the importance of such discussions: The parties need a forum to complain and advocate. 

But the TTC should have a dedicated trade space where the parties can focus on building concretely on the things they can agree on, and to shape and nuance those issues so they are maximally congruent, shedding tangential disagreements. The approach of pressuring the other party to agree reluctantly to the other’s pet initiative simply has not worked in the TTC. (It can work in the context of a comprehensive trade agreement, where there are trade-offs and momentum, but it’s much harder in a cooperative forum such as the TTC).

I can attest from many years as a trade negotiator, especially with the EU, that identifying areas of agreement is not always easy. This is in part because a standard trade negotiation tactic is to turn any proposal, however mutually beneficial, into an “ask” that can be pocketed and used as leverage to get something else. If one side suggests, for instance, that the parties work on compatible standards for a new product produced by both parties, the trade negotiation instinct of the other side will sometimes be to make those discussions contingent on a negotiation it wants that the other does not. This discourages genuine cooperative proposals and attracts proposals on which there is disagreement, hindering cooperation.

The TTC should recognize this dynamic and deliberately avoid it, isolating the areas of agreement and disagreement, and “parking” the latter so the agreed areas can move forward without hesitation or caveats.

To illustrate, the United States and the EU undeniably have a huge common interest in opposing and defending against the increasing impact of a growing number of harmful international trade policies and practices. It is also true, however, that the EU is more hesitant to associate those practices with a particular country, such as China. This difference hobbles cooperation and encourages distancing because cooperation can be interpreted as general broad alignment vis-à-vis China, and the EU doesn’t want to associate itself with all US views on China (or its perception of those views).

One solution to this impediment would be to focus on countering specific harmful trade practices and policies and/or sectors, and perhaps even avoid characterizing the work as China-specific or endemic to any particular system, “nonmarket” or otherwise. In other words, strip out any divisive “ideological” aspect of the issue and move forward on those core elements that are not divisive. This would also sidestep the facile and false binary choice between engagement and disengagement with any particular World Trade Organization (WTO) member. 

Another practical example of this approach: The United States and the EU have significant and long-standing differences between how they define “international standards” in the WTO agreement, and a fight on that issue is tempting whenever they sit down to discuss standards compatibility. But they can and should pragmatically work to avoid future standards conflicts—a huge potential trade barrier—without taking on that ideological disagreement. The same is true for streamlining how products are assessed for conformity with regulations in each of their markets, in which they have a common interest, but widely divergent approaches. 

As a final example, the United States and the EU have a strong common interest in assuring that labor rights are respected around the world, but very different approaches to enforcement—to oversimplify, the United States’ use of trade tools versus the EU’s use of cooperation and persuasion. The same is true of environmental protections and trade. The TTC should avoid taking on this long-standing difference in approach and focus instead on joint practical initiatives that reflect where both sides agree. 

To be clear, the TTC has ultimately cooperated well on many issues, but could eliminate much wasted time and energy by deliberately focusing on and shaping the cooperative issues, and not letting the disagreements and complaints slow efforts down.

Establish a durable institutional foundation

US-EU trade fora have, for decades, been a bit ad hoc, designed and developed by particular US administrations or EU commissions, only to be reformulated and reinvented after the next election. That reinvention has several negative effects: It takes significant time and negotiating effort to reinvent procedures. It lacks the durability of an ongoing framework, even though the substance of the subsequent discussions often remains similar. And it lacks a structured mechanism for receiving and incorporating stakeholder input across the broad range of trade issues—input that is critical to anticipating commercially meaningful potential barriers and to identifying and pursuing joint global objectives. 

Contrast this process with bilateral meetings that are held under official Trade and Investment Framework Agreements, which have an agreed framework for participation by the agencies, regularly scheduled meetings, and, generally, a regularized formal process for receiving and incorporating stakeholder input. Further, under such framework agreements, regular meetings generally continue from administration to administration, since they are required by the agreement, without a new administration needing to redesign the forum or create a new initiative or set a schedule. This helps avoid the impression that the forum itself solely represents the priorities of any one administration. Policies will evolve from one administration to the next, of course—although targeting core issues of common interest will minimize differences—but the foundational mechanics and logistics, including stakeholder participation, are already in place. The result is both efficiency and legitimacy of the process that brings the parties together. 

Indeed, the absence of such an ongoing trade agreement structure between the United States and the EU is notable, given that it is practically a norm with other trading partners. 

When US and EU officials meet in Belgium in April, they will be right to celebrate that the TTC has been a significant plus for the transatlantic relationship. At the same time, the TTC could be even stronger and more durable by incorporating a specific trade agreement framework informed by regular formalized stakeholder input. As noted above, two features should take priority going forward: The TTC should aim to avoid future trade barriers arising from new technologies, and it should work to promote US and EU shared values globally and prevent small disagreements from impeding progress. Building on the success of the TTC by adding the permanent structure of a trade agreement framework would help keep the US-EU trade relationship steady and on course, even as the occupants of the White House and the Berlaymont building change over time.

L. Daniel Mullaney is a nonresident senior fellow with the Atlantic Council’s Europe Center and GeoEconomics Center. He served as assistant US trade representative for Europe and the Middle East in the Office of the United States Trade Representative from 2010 to 2023. He was chief negotiator for comprehensive trade agreements with the EU and the United Kingdom, as well as trade lead for the US-EU Trade and Technology Council.

Further reading

Image: EU Trade Commissioner Valdis Dombrovskis, US Secretary of State Antony Blinken, EU Commissioner for Competitiveness Margrethe Vestager, US Secretary of Commerce Gina Raimondo and US Trade Representative Katherine Tai attend a final press conference in connection with the TTC meeting in Lulea, Sweden May 31, 2023. TT News Agency/Jonas Ekstromer via REUTERS