By Swann Collins, investor and consultant in global affairs – Eurasia Business News, October 17, 2021

View on the Manatthan’s skyline, New York city. Photo credits : Swann Collins.

Semiconductors and investments in innovation are priority issues for the Trade and Technology Council, which was set up by the United States and Europe on September 29. The two great powers are committed to coordinate their strategies to reduce their dependence on Asia and promote Western trade and technologies. Indeed, Beijing has been using its industrial influence to promote its geopolitical agenda, infringing human rights and freedom. In addition, the supply chains disruptions in Asia because of coronavirus pandemics have revealed the fragility of technology dependence for Western democracies.

The Trade and Technology Council opened on September 29, 2021 in Pittsburgh, Pennsylvania (United States). The European Union (EU) was represented by Valdis Dombrovskis, vice-president of the European Commission in charge of the economy, and Margrethe Vestager, vice-president in charge of digital and competition.

On the North American side, Antony Blinken, US Secretary of State, Gina Raimondo, US Secretary of Commerce and Katherine Tai, Advisor to US President Joe Biden on trade issues international, attended the meeting.

Discussions began on the issue of semiconductors, an area seen on both sides of the Atlantic as strategic for the economic future and security of both regions. Washington and Brussels share the same concerns about their dependence on Asia and mainly on China. The USA and Europe seek to rebalance the global logistics chain by strengthening production on their soils. The TTC meeting also focused on future U.S. and EU action to spur economic growth that benefits workers and small and medium-sized businesses on both sides of the Atlantic.

During President Joe Biden’s visit to Brussels last June, the two sides agreed to create a US-European Trade and Technology Council (TTC). Its objective is to deepen the trade ties and strengthen the transatlantic cooperation in technology.

The goal of the TTC is “to create a compelling vision for global trade and technology that serves our people, protects our interests, and fosters a spirit of innovation,” said U.S. Secretary of State Antony Blinken on September 29 after meeting with representatives from the EU.

This two-days meeting also provided an opportunity to track the progress to date of the 10 working groups established by US President Biden and European Commission President Ursula von der Leyen at the U.S.-EU Summit in June.

In the Inaugural joint statement published by parties, Washington and Brussels said that :

“We intend to collaborate to promote shared economic growth that benefits workers on both sides of the Atlantic, grow the transatlantic trade and investment relationship, fight the climate crisis, protect the environment, promote workers’ rights, combat child and forced labor, expand resilient and sustainable supply chains, and expand cooperation on critical and emerging technologies. We stand together in continuing to protect our businesses, consumers, and workers from unfair trade practices, in particular those posed by non-market economies, that are undermining the world trading system.”

Improving transatlantic trade

However, Washington and Brussels need to move forward on their conflict over steel and aluminium imports. The tariffs were imposed by the President Donald J. Trump. U.S. Trade Representative Katherine Tai met on October 14 with EU trade chief Valdis Dombrovskis on that issue.

Tai and Dombrovskis agreed in May to not escalate the dispute over steel and aluminum tariffs for six months in order to negotiate a settlement in a truce that expires in late November.

In June, the US and the EU agreed to halt a 17-year trade battle over aircraft subsidies with Boeing and Airbus, in order to work together against a common threat : communist China’s efforts to develop its own commercial aircraft industry, with the help of economic espionage.

Trade is an important issue in the transatlantic relationships, and is also linked to the monetary policies of the US Federal Reserve and the European Central Bank. A big goal would be to improve the coordination between the US and EU central banks, to better control inflation and purchasing power and deliver prosperity to US and European people.

Some challenges to the partnership

The White House has taken two major steps in the past three months, that have taken some of its European allies by surprise – the withdrawal of American troops without warning from Kabul at the end of August and the surprise creation of an alliance with the United Kingdom and Australia (AUKUS) fifteen days later – which cast doubt on the Mr. Biden’s real commitment to cooperate with its European partners.

France, which, along with the AUKUS, saw Canberra cancel the contract signed in 2016 over an order for French submarines for the benefit of the Americans and the British, sought to convince its European partners to postpone the Trade and Technology Council meeting. Hopefully, this attempt has not made success: the defenders of the transatlantic partnership (the Baltic countries, Poland and Romania) or the defenders of free trade (Denmark, Ireland) refused to do so. France finally reached a compromise with the US, after a telephone interview between Emmanuel Macron and Joe Biden on September 22.

Why the US and Europe must be together ?

Joint work on semiconductors with the United States is an opportunity for Europe to succeed in the 21st century economy, which will increasingly depend on IT technology and artificial intelligence. The US and Europe share the same liberal values of democracy, human rights, freedom and liberty of economic opportunities. Amid growing challenges on the world stage with authoritarian regime or renewal of socialism, America and Europe have no choice but grow their partnership in leadership and innovation, to protect and serve the free world.

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© Copyright 2021 – Swann Collins, investor and consultant in global affairs.