What is the TTC?
The TTC is a relatively new platform for high-level engagement between the US and the EU. It focuses on bilateral and global trade and technology issues, in line with shared transatlantic values and a commitment to both market-oriented principles and the rules-based international order. The creation of the TTC was first proposed by the EU in December 2020 and announced at the US–EU Summit in Brussels in June 2021. The stated objectives are comprehensive – reflecting both broader aims (such as growing the bilateral trade and investment relationship and avoiding unnecessary new barriers to trade) and specific goals (technology standards cooperation, for example).
On the US side, the TTC is led by the US trade representative, the secretary of commerce and the secretary of state. On the EU side, the commissioners responsible for trade and competition of the European Commission take the lead. There is also a strong stakeholder engagement component.
The work of the TTC is done via 10 working groups, spanning issues at the intersection of trade, technology and security. The 10 working groups are: 1. Technology Standards; 2. Climate and Clean Tech; 3. Secure Supply Chains; 4. Information and Communication Technology and Services (ICTS) Security and Competitiveness; 5. Data Governance and Technology Platforms; 6. Misuse of Technology Threatening Security and Human Rights; 7. Cooperation on Export Controls of Dual Use Items; 8. Investment Screening Cooperation; 9. Promoting SME Access To and Use of Digital Technologies; 10. Global Trade Challenges.
The relevant departments and agencies from the US and EU co-lead each group to coordinate the technical work needed to put political decisions into action. The range of topics and the cross-departmental nature makes this a complex undertaking for transatlantic and internal coordination.
To date, three ministerial-level meetings have taken place: the first in Pittsburgh, US in September 2021; the second in Paris, France in May 2022; and the most recent in the Washington, DC area on 5 December. The next TTC ministerial meeting is planned for mid-2023 in Europe. While the Pittsburgh meeting was about setting the agenda and the Paris meeting about policy scoping, the Washington meeting focused on initial outcomes. Delivering tangible results will remain a priority – both with regard to advancing newly launched projects and to developing new ones.
What isn’t in the TTC’s scope?
Despite the breadth and depth of issues covered by the 10 working groups, certain trade and tech-related issues are being addressed outside of the council. For example, the EU and the US set up a Joint Technology Competition Policy Dialogue in June 2021 in parallel to the TTC. This dialogue focuses on cooperation across competition policy and enforcement in the technology sector.
Meanwhile, work to agree and implement the new EU–US Data Privacy Framework for commercial cross-border data flows has taken place – and will continue – outside the TTC, even though the council’s Working Group 5 is devoted to data governance. The new framework could have positive spillover effects for the TTC, and can help the US and EU to build synergies around shared commitments to data protection, privacy and the rule of law.
Similarly, cooperation on minimum corporate tax rules is not part of the TTC discussion. However, the work that takes place primarily in the Organisation for Economic Co-operation and Development (OECD) and the G20 relates to the TTC.
In part, contentious issues like these were kept out of the TTC’s scope to prevent long-standing differences and disagreements over anti-trust, privacy and digital taxation from derailing the council’s work. Recent tensions – such as those over the US’s Inflation Reduction Act – are also being dealt with by a dedicated US–EU taskforce. Whether such separate tracks will allow the TTC to move on with its intended focus on emerging issues and its forward-looking agenda remains to be seen.
TTC in the geopolitical context
While much of the work spans bilateral issues, the TTC must be seen in the context of competition with China and Russia’s invasion of Ukraine. Eight of the 10 working groups have a China angle, in particular those dealing with standards for technologies, cooperation on export controls and foreign investment screening. Nonetheless, the European side has repeatedly stressed that the TTC should not become a ‘China-bashing’ forum.
The war in Ukraine has shown that democratic principles and the rules-based international order cannot be taken for granted, and has demonstrated the need for greater transatlantic cooperation. Cutting off the Russian economy has also reinvigorated the desire (and need) to deepen US–EU trade and investment ties, particularly in energy. The EU urgently needs to find alternatives to Russian gas, and the US can help with the shipment of liquefied natural gas (LNG). But, while the US now contributes 40 per cent of Europe’s total LNG imports, US LNG is expensive and only covers a fraction of the deficit in pipeline gas previously supplied to Europe from Russia. Calls to renew US–EU negotiations for a bilateral trade agreement have resurfaced in light of the Ukraine conflict – although the prospects for a deal are low.
The TTC compared to previous transatlantic trade initiatives
While the TTC has emerged as the central pillar of US–EU trade and technology cooperation, it is not the first attempt to formalize transatlantic collaboration.
Earlier attempts to strengthen cooperation and deepen ties between the EU and the US include the 1995 New Transatlantic Agenda, the 1998 Transatlantic Economic Partnership and the 2007 Transatlantic Economic Council. The latter launched the High-Level Working Group on Jobs and Growth in 2011, which led to the decision to pursue the Transatlantic Trade and Investment Partnership (TTIP) in 2013. These attempts had mixed results. The failure to conclude TTIP after more than three years of negotiations is perhaps the most notable setback. Nonetheless, the negotiations did achieve progress in some areas (like simplifying technical regulations without lowering standards); they also helped to establish strong ties between trade officials.
While a coordination mechanism like the TTC has many advantages over a dedicated negotiation like TTIP, there are some drawbacks.
TTIP and the TTC are different and the latter avoids many of the former’s pitfalls. While TTIP focused on the outcome of an agreed text, the TTC prioritizes the process of cooperation. The TTIP talks required negotiations, including on market access in key sectors, rules and regulatory cooperation. In contrast, the TTC focuses on common objectives and on how to achieve them via coordination and sharing of best practice. Unlike TTIP, the TTC does not require a negotiating mandate and ratification, which reduces parliamentary and congressional scrutiny – although regular updates and monitoring still take place.
But while a coordination mechanism has many advantages over a dedicated negotiation, there are some drawbacks. Unlike formal trade negotiations, a cooperation framework does not easily lend itself to making trade-offs across different issue areas. It also lacks enforceability.
It remains uncertain whether loose and flexible mechanisms like the TTC can deliver. The US has recently moved away from negotiating new trade agreements, preferring multifaceted and versatile approaches – for example, creating the Indo-Pacific Economic Framework (IPEF) instead of rejoining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). However, traditional trade agreements have not run their course. The EU is still pursuing such agreements in parallel to more flexible cooperation mechanisms like the US–EU TTC. For example, it has launched a Trade and Technology Council with India alongside negotiations on a free trade deal.
In the transatlantic context, the focus on cooperation under the TTC is helped by the fact that the US and EU share common concerns regarding China and Russia. Moreover, long-standing differences between the US and EU are either already being resolved (for instance, a 17-year-long dispute over aircraft subsidies) or put aside to be dealt with elsewhere (like privacy and digital competition).
Greater alignment of US and EU objectives gives the TTC a better chance of success compared to TTIP. Success is not guaranteed, though: the US and EU have different regulatory philosophies; they do not always agree on broader geopolitical developments; and domestic political events such as the return of Donald Trump (or a Trump-like figure) to the US presidency could unravel the progress made so far. Moreover, success is much harder to define for the TTC, given that there is no signed agreement to measure progress against.
The TTC’s record so far
Close cooperation between the US and the EU – in coordination with other G7 members – on export controls and sanctions against Russia over its invasion of Ukraine has been a remarkable success. As discussed below, the TTC has facilitated some of that cooperation.
The need for urgent cooperation on such concerns has pushed more future-oriented issues to the sidelines. Nonetheless, the US and EU have been able to make progress across several of the 10 working groups. Numerous sub-groups, dedicated taskforces or special dialogues have been created within those working groups. Other key developments are the establishment of a Trade and Labour Dialogue at the May 2022 TTC meeting and the launch of a Transatlantic Initiative for Sustainable Trade at the December 2022 meeting.
Building on their intention, expressed in May 2022, to develop a joint roadmap on evaluation and measurement tools for trustworthy AI and risk management, the US and EU issued an AI roadmap at the third TTC ministerial meeting in December. Another outcome of the December meeting is an initiative to support digital infrastructure and connectivity in Jamaica and Kenya. The US and EU have also taken steps to implement an early warning mechanism in their efforts to build resilient semiconductor supply chains.
These achievements deliver on key goals announced at the May 2022 TTC meeting, but further steps are needed to put them into practice.
