Ronan Murphy
Good morning, in DC at least to everyone who’s joining us. My name is Ronan Murphy. I’m the Director of the Digital Innovation Initiative here at the Center for European Policy Analysis (CEPA), and we are one of the organizations behind this report, along with the Wilfried Martens Center for European Studies in Brussels. Both our authors are here on the call to talk about the report. We have Bill Echikson from CEPA, who is the editor of our ‘Bandwidth’ journal, our online tech journal, which you can see on cepa.org. And we’ve also got Dimitar Lilkov, who is co-author and Senior Research Officer at the Wilfried Martens Center for European Studies. So thanks very much gents for joining us. Thanks to everyone else who’s joining us on the call here as well. We’re not going to hang around, we have 60 minutes allotted. But that’s not a target. That’s an upper limit. So we will move as quickly as everyone wishes and try to move through things. This call is on the record – clearly it has been recorded, and you will be sent a link to access the recording after the call. Michael, who has popped up here and is demanded to reach out to with any technical questions. So any questions like that we can forward them on to you, no problem. So the name of the paper is “Transatlantic Trade and Technology: Partners or Rivals?” We shared the, I think we’ve already shared the link to the report, which is now going live on our website. We will be doing a hard copy launch in Brussels in February, but for now, let’s dig in. What was the motivation? Why did we write this report? It’s very timely. We’ve got the TTC meeting coming up in Washington here next week. Bill, maybe you’d like to open up for us.
Bill Echikson
Thanks, Ronan and I appreciate that, thanks for the introduction. We did this project because we thought that the Transatlantic Trade and Technology Council was the only game in town to talk about trek tech transatlantically and we wanted to see whether it was living up to its promise. I mean, for CEPA this was sort of a natural because our mission is non-partisan and to support the Transatlantic Alliance and it was good to do the project with the Martens Center so that we did interviews on both sides of the Atlantic. We thought this was a good time to really sit and research because we knew elections were coming up in June here in Europe, with the European Parliament and in the United States, of course in November, and we thought that the TTC needed to be judged and perhaps given some proposals to work and improve, dig deeper roots to survive that political transition, if it was possible. Now, why was the TTC started? It was pretty clear under the Trump administration that relations with Europe had fallen into disrepair. There wasn’t dialogue, there was a lot of tariff wars and denouncing each other. Actually, the Europeans proposed the TTC to the Trump administration, as a way of overcoming some of the tensions, but the Trump administration ignored it. So we give kudos to the Biden administration for picking up on the idea and taking it up and running with it. But three years after it was inaugurated, I think with fanfare in in Pittsburgh and so forth, we really did find that the forum was underperforming. And we’re worried. The upcoming meetings in Washington next week as far as we know, there’s not even an agenda, there’s no joint communicate planned. And we think that if nothing is done, pretty much the upcoming or next meeting in Europe in the spring, proposed in Belgium, could be the last one. And we would think that would be a pity that this whole process would die an untimely death. So, we came up with some proposals to try to make the TTC more impactful, the proposals are both structural and thematic. On the structural side, we thought that there were too many chiefs that no one knows who’s really leading the TTC on either side of the Atlantic and it would be really useful and helpful to have one person in charge, hopefully the President and the President of the European Commission. We also thought at the same time that the TTC was government to government and too narrow so it would be good to invite CEOs, civil society and Congress. We thought that because when we looked at the UK AI Summit, which I had relatively low expectations for, it turned out to be pretty impactful precisely because they got everyone who was involved on both sides of the Atlantic to be talking. So that was a sort of model for us. We also thought that there were too many summits, many of the interviewees told us that they would end one summit and they’d be rushing to start the next one. So one big summit a year maximum seemed to us to be a good way of going forward. We also thought perhaps the Secretariat would help and that this would sort of streamline and make sure that everyone knew what was going, there were too many working groups, too many sort of floating atoms, we would like to see more organization and impact to the structure. The second thing was to focus on a few clear goals. And I mean, one of the things the TTC, I think, disappoints Americans is that there’s no clear, we’re not moving towards some clear type of project, some clear results. And it would be good if the TTC would look at, you know, set out a few clear goals for the years ahead and then work to reach them. The working groups can continue with the technical stuff on the side, but it should be you know, a chat, how to meet the China challenge, how to work together on climate change, how to work together on tech regulation, like on AI, rather than everyone going off on their own and doing their own type of project, which are also often conflictual. So again, we’d like to see the TTC succeed, but it needs to change to succeed Dimitar over to you.
Dimitar Lilkov
Thanks, Bill. Thanks for CEPA for organizing this call and thank you for all the journalists finding the time to join in. If you’re worried about Martens Center, which I represent, we are the official foundation and political think tank of the European People’s Party, which is the centre right caucus in European Parliament, and this is the biggest political group in the European Parliament. Now the Martens Center together with the colleagues from CEPA, we started this joint project as we wanted to explore the Transatlantic Trade and Technology Relationship from a shared EU-US perspective, not only from the ivory towers in in Brussels or Washington, I think, actually, this is the first study and the report is the first actual report we have on the Technology Council coming from two think tanks on both sides of the of the Atlantic. So our joint report also stems from our understanding and dedication to deepening transatlantic relations and we saw the need that we need an improved supranational institutional mechanism for dealing with high profile issues related to trade, green technology and export controls. Now it’s somewhat bizarre that the EU and the US account for 1/3 of global trade and services and goods, ballpark more than a trillion dollars every year in terms of trade, but we don’t have a truly functional supranational mechanisms for the bottom or social stock and this is why the TTC is this mechanism that we want to see strengthened and future proofed, especially because of the elections coming this year in the EU and in the US. Maybe a few words about the perceptions here in Brussels about the TTC and how experts around town saw it. Now the format was seen as part of this renewal of transatlantic vows, if I might frame it as such. Men in Brussels saw the Trade and Technology Council as this high level policy forum, as a testament for this rekindled relationship with the EU-US. And in Brussels maybe we saw it as an opportunity with potential spillovers on climate, upholding democracy, reducing trade and defence tendency. So Brussels saw this format as an open platform with many spillovers for co-operation and global engagement. Some of these expectations in the last couple of years were quickly overturned and the naivete in Brussels was quickly dispelled after it became apparent that the administration of Joseph Biden is not convinced about deepening transatlantic ties in certain areas, but maybe we can talk about this in the discussion. The working hypothesis we saw and which was also reiterated by a number of experts here in Brussels was that the US saw the TTC differently. It saw it as a format for potential China containment. And this is where maybe both administrations didn’t see eye to eye. In our report, we tried to make an assessment of the last almost three years of the EU-US engagement on trade and tech. Now the scorecard is a mixed picture as the format was riddled with external challenges and also a source of friction between Brussels and Washington. Most importantly, the TTC proved to be an important avenue where both administrations continue talking. Now, maybe this is a low bar, but given the tumulus Trump administration this was an accomplishment and given the improved contacts and the fact that the working groups handled a number of issues, especially on export control, this was extremely extremely important -facing the Russia and Belarus challenge after the illegal war in Ukraine. So we saw in our report that the TTC was an extremely important tool that we aligned our export controls on technology on Russia and Belarus. More importantly also, both economic blocs started talking on common electrical vehicle chargers and related standards on green technology. This is not the sexiest of topics and maybe sounds a bit non-essential, but don’t underestimate the need for developing these joint standards on technologies. In the last few years we’ve seen China making headway and aggressive headway by the way, when it comes to pushing through its vision and technological standards internationally. Look at the UN level, the International Telecommunications Union and other standardization bodies internationally, where China has become more and more visible. So we see this as an extremely important avenue for closer alignment between the two economic blocs. Lastly, in the report, we also analyzed the joint ambitions for connectivity investments in Latin America, also in Africa, Kenya, Jamaica, Costa Rica, even though the specific deliverables on joint investment in technology and digital infrastructure remains a bit elusive. And finally, we also analyzed some of the other, so called soft achievements of the format, non-binding resolution on the common future of the Internet, or general principles on promoting child safety online. Now, Bill already touched upon a couple of ideas how we see the future of the format in terms of restructuring, but just to reiterate, in terms of policies, we need a better laser focus on a couple of issues which are very important for both administrations. First, we need US-EU agreement on critical materials so we can improve security of supply and also solve tensions when it comes to access to electric vehicle subsidies in the US. We need to make more headway on creating a common green tech alliance or green technological marketplace however we want to name it. This means eliminating tariffs fully and aligning standards on solar panels, EVs, wind turbines, and so forth. And finally, we need a better and more current response on Artificial Intelligence and handling the potential risks from proliferation of AI and biotechnology risks. Both economic blocs can move forward with their own domestic regulations on AI, but we need to have a better framework for mitigating international risks. The report goes into more details on many of these issues, please make sure to check it, but I’ll stop here so that we can continue in discussion. Thanks.
Ronan Murphy
Thanks Dimitar, thanks Bill. So I think we’re going to open up straightaway for questions, but one thing I will say is, the positive thing we can say without question is that the TTC exists as of today, at least. And that’s a starting point. So it is something to hang your hat on. It’s something to use, something to utilise, or at least spark other ideas. It isn’t going to answer every question that you’ve asked right now, but that’s the starting point we can go from. So questions I got, like I said, that’s why we’re having a call. We want to hear from those who have joined us. Who would like to go first? Is there anyone would like to submit anything?
Philip Blenkinsop
If you can hear me, I’m happy to ask the first question or couple of questions. Yeah, yeah. Good. Very good. So I’ve read your report, and you talk about, you know, whether you’re a minimalist or maximalist or something like that. So basically, the minimalist approach is, oh, well, at least the sides of two are talking. Now, I think your conclusion is, we want a little bit more than that… than in terms of, say, deliverables, and then you know, the EU side particularly is talking about trying to get deliverables. You know, you mentioned this green tech alliance, green marketplace, critical minerals agreement. Yes, it makes sense to have goals, but, you know, it’s the problem or part of the problem that, you know, and I guess you kind of identified that, to some exten in your report, that the two just want different things from this. You know, when it comes to say, green marketplace, this is sort of trade, trade market access, etc. I mean, do you think that the United States has any interest in this? This is kind of key demand of the EU side. And then, you know you’re obviously kind of talking about the TTC, the one in spring I guess, you know, could be the final one because of how it’s set up, do you think that the TCC could anyway survive a new president in United States?
Bill Echikson
Let me start, Dimitar you can go with the second question. I mean, that obviously was one of our motivations was to write this and make some reform so that at least it had a chance to survive. I think there always be differences, you pointed them out, and we’re not going to get resolutions to all of them, but obviously, if it’s struggling during the Biden administration, a change of administration would make it probably harder and the history that we came up with was that a previous Trump administration rejected the idea or at least didn’t respond, and it or ignored it, so the omens wouldn’t be good. I can answer the first one, two, but maybe Dimitar you go with..
Dimitar Lilkov
No, go ahead Bill, go ahead.
Bill Echikson
No, I do think that, you know, on, detail on one of the things that we found frustrating with the TTC was that there was commonality of objectives often, but it didn’t deliver some of the meat. And I know, you mentioned for example, that Jamaica-Kenya connectivity projects, which, you know, in supporting in developing world tech, and being an alternative to China, we should be able to work together yet, when we pulled up the embassies and looked for details we just couldn’t find anything that was substantive. I still can’t figure out whether these joint deals in Jamaica and Kenya are about building new networks free of Huawei, or whether they are about training SMEs to use digital tools. There’s just nothing detailed, so I think that if we’re going to announce joint projects, and we should work with joint projects, we need to do more, to give details about them. Now, I know that a lot of the interview said “well, you know the grant schedules are different, it’s difficult coordinating” but that’s the type of thing that the TTC should break through, if it’s going to be successful. Go ahead, Dimitar.
Dimitar Lilkov
These are these are great questions on the green stuff and then the critical materials. I’m a bit more optimistic. We’ve seen some movement on the US side when it comes to dialogue on critical materials, different advisors from the administration are involved in this, we’ve seen some some movement. The US signed earlier in ’23 and agreement with Japan on critical materials and I think the EU is going to follow suit. We need more clarity on improving our supply chains on lithium, nickel, cobalt, graphite, and honestly, I mean, yes, the US administration right now looks a bit more protectionist, but I honestly think we need to leverage our markets to make sure that in the future, we can actually rise up to the China/Asia challenge. Looking at the growth projections for next 10 years, looking at demographic projections I don’t think our markets can sustain the competition internationally if we don’t work better on this. When it comes to the Trump challenge, yes, absolutely, this is something which we thought about and this is why we want to see the TTC Trump-proofed and become more institutionalized so that it doesn’t, it doesn’t just, you know, go with the whims of the different political administrations, be it European or American. On Trump, I see that there is movement in the EU right now, when it comes to China. We recently saw the new economic security strategy draft by the European Commission. There is more and more willingness in Brussels to talk about potential dumping in China, about probes on electric vehicles on wind turbines, even plastics. So I think that Brussels is moving when it comes to China containment and honestly, this might be a bit more appealing for potential political administrations whether the format survives.
Ronan Murphy
Okay, thank you.
Bill Echikson
I agree with Dimitar, I think that we, you know, there could be, you know, hopefully the new administration would see this as a useful tool to actually move forward on what is increasingly a common agenda, despite a visa vis China, for example.
Ronan Murphy
Okay, well, as Michael has indicated in the chat there, if anyone has any questions, you can use the put your handle function here in Zoom, or you can add it via text. Let me just ask because you mentioned there, Dimitar when you opened up on your remarks that there was no facility, there was no structure for constant back and forth trade negotiations between the EU and the US. They might contend that what the plan was that the WTO was where that would happen, or large-scale trade agreements was where that would happen, and it didn’t need to be done another way and they wanted other parties at the table in any case. So what does the, where does the TTC fit with in terms of large trade agreements? Are those gone? Are those no longer a viable option?
Dimitar Lilkov
I mean, I come from a tradition and I and I’m a staunch transatlanticist myself and everything dealing with these issues would argue in favour of potential free trade agreement with the US. But let’s be politically realistic. Number one, there is obvious unwillingness on the US side for traditional free trade agreements for a long time now, even look what’s happened with the UK, the UK-US free trade agreement was supposed to be the Brexit crowning achievement for the conservative administration in London, but even with the US the Brits couldn’t strike a free trade agreement. And there’s obvious unwillingness from the US side. Also don’t underestimate it on the EU side, there is also I would say a certain level of fatigue when it comes to free trade agreements. Even though the EU is committed to multilateralism and free trade, we have dozens of free trade agreements with a number of economic blocs around around the globe, but there is a certain sense of fatigue. Look at the Mercosur agreement. We’ve been negotiating for 20 years and the thing is almost done but not signed and ratified. So on both sides of the Atlantic, there is a certain sense that, number one: free trade agreements right now don’t give the bang for the buck you would get back in the days, now we have less and less tariffs and you get less and less actual tangible benefits of free trade agreements because of the WTO functioning for last 30 years successfully and reducing trade tariffs internationally. Also, because of globalist anti-globalization and protectionist practice on both sides of the Atlantic, we see that this is not maybe viable, so what we will see is some kind of a pick and choose a la carte Free Trade Agreement on specific not agreement, but specific items, and this is what we argue in the TTC: that this is the avenue where we can eliminate tariffs in potential areas so we don’t need a full scale Free Trade Agreement.
Ronan Murphy
Yeah I think that’s yeah, sorry Bill, go ahead.
Bill Echikson
No, I was just going into agreeing. In the history or the research that we did, it was clear that we went through the free the efforts for a free trade deal between the transatlantic partners and why they failed Frankenstein foods, for Europe and you know..
Ronan Murphy
Chlorinated chicken.
Bill Echikson
Yeah, chlorinated chicken and whatever, so it really I mean, this was, it’s just a no go and the TTC is an alternative format. And I agree with what Dimitar was just saying is that, you know, this is an area where you can get important key agreements and get them out of the sort of politically poisonous, free trade type of negotiations, which proved fruitless.
Ronan Murphy
Yeah and a lot is made of the American election, which clearly is a big deal. And there’s always an election cycle, as was the perception in the US, but when you’ve got 27 member states, 27 democratic member states in the EU, it’s always an election year somewhere and as you mentioned, there, the big trade deals have been scuppered, or held up, at least, at very local level. So the Flemish assembly for instance.
Bill Echikson
It was Walloon, but okay.
Ronan Murphy
Excuse me, excuse me, so there you are – Flemish report, excuse me. So let me correct the record. But that’s the I think maybe the EU doesn’t get the credit it’s due for managing to get anything done in that context, but it does mean that everything has to be considered a local level. Keshav, I think you have if I’m pronouncing your name correctly, but please correct me from the prints – you have your hand up. Go ahead. The dreaded unmute.
Keshav Padmanabhan
Hello?
Bill Echikson
Hi
Ronan Murphy
Oh, still on mute. Let me see if I can help you. Excuse me, folks. There is a sensor on the lights here that’s why I keep – I’m sitting very still that’s why I keep disappearing.
Bill Echikson
Keshav we heard you and then you disappeared.
Keshav Padmanabhan
Yeah hi, can you hear me? Yes. Hi. So my name is Keshav. I’m a journalist covering foreign policy from India and the reason I raised my hand is because we’re discussing this idea of free trade agreements, not getting you know, bang for your buck. Saying that, my question specifically is that the EU and at least from what we’re hearing in India, is extremely interested in closing out a free trade agreement with India ASAP, before both the EU and India goes for the elections, right. And we also have started the Swain Technical Council discussions between India and the EU as well side by side. So I just, my question is, how do you see this architecture of trade relations evolving between India and the EU? Keeping in mind, you know, the larger transatlantic conversations that are ongoing, as well as China and the rise of China and the investigation surrounding China’s dumping policies, EV policies. I know it’s a lot to pack in one question, but that’s just generally what I wanted to ask.
Bill Echikson
Dimitar I think that one’s for you, it’s EU-India.
Dimitar Lilkov
Yeah. Thanks, Keshav for the question. You know, full transparency here. I’m not a specialist on free trade agreements or EU-India relations. All I’m just going to say is that I agree with your initial general assessment about the willingness on the EU side to engage with India, it’s important to say that last year, we started a Trade and Technology Council with India, which by the way, hasn’t got enough media attention, as it should, honestly, also, the EU-US TTC hasn’t gotten enough media attention as it should. But indeed, we have started the dialogue, in a way the EU-India TTC reflect some of the goals we have with the Americans. It doesn’t have, you know, 10 defined working groups as we have with the EU-US dialogue, but as far as I’m aware, we have launched joint conversations about semiconductor supply chains and leveraging trade on digital and key technologies, so I hope that if the US-EU format pushes ahead and proves to be successful, it will be the golden standard of a template which we will use and we will pursue with other regional powers and other important economic blocs like India. So, yeah.
Bill Echikson
Yeah. And well, I can add to Keshav that, you know, obviously, the US sees India’s key counterweight to China, as in many ways future economic or present and growing economic powerhouse, tech powerhouse and at the same time, has a lot of worries about India’s tech policies which often veer into, you know, data localization and protectionism. So, you know, I don’t know the ins and outs any better than Dimitar, probably worse, but I think, you know, some sort of TTC structure with India that would work on those specific irritants or would be would be welcome.
Ronan Murphy
So yeah, I think yeah there’s an idea there Dimitar, for your next paper, if you can find the CEPA equivalent in India, that would be something to write about. It’s, I think, if the TTC, and this is something that’s been mentioned in the paper, from one side at least is viewed as a tool to combat China at some level, then the likes of India have to be involved. And in, in the solution, particularly on the digital side, there is no border, too much of the work that’s ongoing and you mentioned green tech, and a third country plays such a significant role in delivering the critical minerals or whatever it is, or other refining for the bits and bobs that are going to go into the green tech that we want to use in both of these markets. So is there you know, is there, is there a call here to start bringing other people to the table? Is that going to make it more effective? Or is it less likely to get anywhere as a result? At the TTC. Or is that a pipe dream?
Bill Echikson
I have to say Ronan, we didn’t really look at that. But I would agree with what Dimitar said which is that this could be a model for similar types of forums with I mean, I guess Europe is already seeing it as a model, I think the US between free trade and something concrete this will be the best type of alternative so you know a TTC US-India might be welcome too, maybe a tripartite I don’t know
Ronan Murphy
And other players, yeah. And Dimitar anything to add there?
Dimitar Lilkov
I’m a bit more I don’t know pessimistic on having such a multilateral expansion of the EU-US TTC. I think that we need to engage with these actors absolutely, but I’m just you know the Bulgarian pessimist in me political pessimist doesn’t see this happening in a joint common table. I think we will pursue important dialogues with these countries and we already have them, with Japan as you mentioned, Japan for example, India with Japan, we have a fantastic relation through the G7 summit. The US has its own policies and its own different formats with India we are doing the Trade and Technology Council with the EU. So for now, I mean with CEPA we try to be a bit more sober and focusing on transatlantic relationship, but of course in parallel these things can develop but I don’t think that through a common white table.
Bill Echikson
Right, no, I think you’re right Dimitar. Is that done? You know, the American priorities around data localization and access to it for its tech companies to the Indian market would be different than the priorities of the European.
Dimitar Lilkov
Exactly, exactly.
Bill Echikson
Emphasize financial services and other types of of industries.
Ronan Murphy
Yeah, there are other supernational even organizations already in existence like the WTO, albeit with a logjam about regarding dispute resolution as it stands. So, I mean, use the word sober, Dimitar, maybe, maybe that’s the point we might conclude on if there are no more questions. In the cold light of day, given that there is a meeting here next week in Washington, and we have one scheduled, at least or supposedly scheduled in Belgium, who are the current presidents of the EU in April and pending elections on both sides of the Atlantic and elsewhere, like India as has been mentioned, actually, coming up later in the year. Is the clock ticking and if so, how long is left to revive or not revive, but keep the TTC and get it to function?
Bill Echikson
The clock is ticking. I agree. And I would be relatively pessimistic that we could defuse it in time. So we’re going to try to be optimistic and make proposals that we think are doable, because some of them can be done internally and hopefully, the Belgian government will jump on this too, as something, you know, most of the negotiations on specific regulations stop in the run up to elections, so maybe the Belgians could concentrate on this and make it a big, big splash , with inviting CEOs, with inviting civil society to actually make it something more difficult to shut down.
Dimitar Lilkov
Ronan, the proverbial low hanging fruit next couple of months, they need to close on a couple of deliverables, international standards on green tech and so forth, as I mentioned, working with with the buzzwords on AI, developing the Hiroshima process and making sure that we’re engaged when it comes to common definitions, common direction and risk assessments so that we can talk in the future about handling the proliferation of AI and handling these issues and maybe on the European side, honestly, I think we, if the word is to give in by at least show some willingness to work on China through this format. As I mentioned in the opening, we did accomplish quite a lot when it comes to export controls on Russia and Belarus, this was absolutely instrumental and came to limiting the access of the right to the Russians to critical technologies and other related materials, so close on these quick wins and showed the willingness to adapt and reform this format so that we can work together on the biggest challenges for next couple years.
Ronan Murphy
Yeah and I think, to end on a positive note, and again, if anyone has any questions, please jump in. There are 10 working groups under the TTC. So they don’t all have to exist in perpetuity. Some of them are going to be more important than others like you, like you mentioned low hanging fruit, Dimitar, there are things that can be done. And even in the previous US administration, there were cut out deals, there were individual industry specific deals done.
Dimitar Lilkov
Absolutely.
Ronan Murphy
In the US and other nations and other blocs. So that and I think we should probably say it out loud, we don’t know who’s going to win any election yet, so the TTC could continue as if nothing ever happened and our paper could form the basis we hope of some recommendations that might be followed. So I think that’s where we conclude it unless anyone has any more questions from our gaggle here. No, I think that’s it. Thank you very much again, Dimitar from the Wilfried Martens Center for European Studies, and Bill from Center for European Policy Analysis colleague of mine. Thank you very much again, to everyone who’s joined the call and the paper’s live, the links supplied and we will be firing out the recording and the transcripts in due course.
All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.
