The TTC ministerial meeting in December 2022 offered the US and EU a chance to show progress and deliver tangible results across a limited number of areas, such as the AI Roadmap and financing digital infrastructure in third countries. But while the outcome was positive, more work needs to be done – both with regard to advancing these new initiatives and to developing new ones.
Ahead of the next TTC ministerial meeting in mid-2023, certain issues stand out where progress is most likely and where action is most needed for the TTC to show success.
First, advances on the AI Roadmap could be easily achieved. In particular, creating a common terminology and shared taxonomies could not only help to showcase that the TTC is able to deliver on its ambitions, but it would also help broader efforts to build trust. Cooperation on technical standards and tools for trustworthy AI and risk management could also be a model for cooperation on standards in other areas.
Second, the US and EU need to successfully deliver on the digital infrastructure and connectivity projects with Jamaica and Kenya announced in December 2022. The US and EU might also consider launching further pilot projects associated with the transatlantic taskforce on public financing for digital infrastructure in other low- and middle-income countries. To better enable collaboration on financing for connectivity in third countries – and to contribute to broader G7 efforts – the transatlantic partners stand a better chance of success by enhancing coordination between the US Development Finance Corporation and the European Investment Bank.
Third, and perhaps most important, specific initiatives on clean energy would be impactful and would demonstrate the usefulness of the TTC and its Transatlantic Initiative on Sustainable Trade. Cooperation between the US and EU is needed to reduce carbon emissions and accelerate the deployment of low carbon products and technologies. Given the potential for transatlantic friction over CBAMs, both sides of the Atlantic should focus on their stated objective to align methodologies to calculate the carbon intensity of certain products as part of TTC Working Group 2.
But progress on clean tech and energy need not be limited to the TTC. In fact, leaders from the US and EU pledged to create a ‘Transatlantic Green Technology Alliance’ in June 2021, but this mechanism is not up and running yet. Efforts under the TTC could help to establish that alliance and reinvigorate existing mechanisms, such as the US–EU Energy Council (created in 2009; it has met nine times since, most recently in February 2022 after a four-year hiatus). It is critical for the US and EU to use multiple vehicles to strengthen strategic cooperation on energy, climate and clean technology. Such efforts are likely to focus on strengthening the energy security of partner countries amid the challenges caused by the war in Ukraine, as well as accelerating the transition to clean energy.
In addition to these three main areas of cooperation, there will likely be progress around specific issues. For example, the US and EU plan to launch a pilot project on privacy-enhancing technologies in 2023. They will also continue work towards a common standard for charging heavy-duty EVs (such as buses, coaches and trucks), to be adopted by 2024.
In the context of Russia’s invasion of Ukraine, the US and EU will likely seek to expand their cooperation on export controls to like-minded partners. Transatlantic efforts to build resilient semiconductor supply chains will build on the early warning mechanism and focus on transparency measures. Such transparency measures would not only help the TTC deliver tangible outcomes, but also play a key role in avoiding a US–EU subsidies race and potential trade war.
How to measure success? And how long will the TTC last?
While it is difficult to identify metrics by which to judge the success of the TTC, general indicators exist. Among them are higher levels of cooperation and renewed trust between the US and EU. The level of stakeholder outreach and engagement play an important role in this regard. A key challenge is how to assess such indicators without being simplistic – a high number of meetings, for example, does not necessarily indicate progress.
A further aspect is the complexity around what success for the TTC looks like at different levels – whether that is bilateral, minilateral/plurilateral or multilateral. If the EU and the US were to agree on a set of common tech standards that increases bilateral trade and investment, then arguably the TTC has been successful. But if doing so has negative spillover effects for third countries, this would raise questions about the TTC’s overall success.
Putting specific metrics aside, indicators as to the TTC’s effectiveness could include overcoming barriers that the US and EU face in third countries, especially in emerging technologies. As the European Commission develops its own unilateral trade defence measures and the US considers what tools it might use, avoiding collateral damage would itself be an achievement.
If the TTC cannot deliver by early 2024 – in the run-up to both the US presidential election and the end of the five-year terms of the European Commission and Parliament – it will quickly lose credibility. Unless measurable outcomes are produced, it will be difficult to sustain political interest at the ministerial level. Failure to make tangible progress on TTC initiatives would be seen as a loss for the Biden administration and its efforts to revive transatlantic relations after the Trump presidency.
The potential re-election of Trump as US president, or the election of a politician with a similar worldview, is already casting a shadow over Europe’s approach to relations with the US. To future-proof (i.e. Trump-proof) the TTC, a ‘parliamentary component’ could be added to strengthen the existing ties between US and EU legislators and reduce the impact of a hostile presidency. For example, members of the European Parliament and US Congress could hold meetings in conjunction with those of the TTC. Such efforts would not only cement the TTC’s organizational structure, but also reinforce other mechanisms such as the Transatlantic Legislators’ Dialogue. At a time when trade and technology issues are under increased scrutiny, broader engagement with key stakeholders could alleviate concerns regarding lack of congressional oversight. The idea of a ‘congressional advisory council’ to the TTC has already been floated.
Despite the above-mentioned emphasis on delivery, the main benefit of the TTC might therefore lie in the creation and maintenance of an extensive network of officials (especially through regular meetings of mid-tier officials), plus regular stakeholder engagement, on both sides of the Atlantic that could uphold cooperation even in the event of Trump’s return.
TTC and variable geometry
As the TTC evolves, it could emerge as a central platform among the growing number of groupings of variable geometry – which includes recent minilateral initiatives as well as more established forums. Issues will ultimately determine which forum emerges as the best vehicle to drive forward discussions and build consensus. On topics where bilateral discussions are sufficiently developed, the US and EU can have greater impact if they reach out to like-minded partners. Initially, there could be ad hoc invitations to join TTC taskforce or working group discussions. Further steps could involve TTC spin-offs with key partners on issues of shared concern. Important partners could include Australia, Canada, Japan and the UK. The inclusion of Canada and the UK would make the TTC a truly transatlantic initiative.
The UK in particular could add value to TTC discussions on AI and digital trade issues. Strengthening US–EU–UK cooperation would allow the TTC to align more closely with discussions under the UK–US Dialogue on the Future of Atlantic Trade, launched in 2021. There are also possible synergies around efforts to build resilient supply chains in critical sectors; support the rules-based global trade system; promote better alignment between trade and climate ambitions; and create economic growth for workers and businesses on both sides of the Atlantic.
