The sixth ministerial meeting of the EU-U.S. Trade and Technology Council (TTC) could prove a pivotal moment for transatlantic cooperation. The April summit in Leuven, Belgium, offers both sides an opportunity to establish a strategic, harmonized vision for trade and technology that sets the course for global discussions and ensure the €8 trillion ($8.7 trillion) transatlantic economy remains a driver of digital growth worldwide.

 

The TTC has shown value since its launch three years ago, most notably in helping coordinate a unified response to Russia’s war of aggression in Ukraine. The Council has also created dialogue infrastructures at a technical level – channels that are especially useful in navigating periods of political and regulatory uncertainty.

 

But too much of the TTC’s attention and potential has been bogged down by policy divergences and competitiveness issues, from trying to solve trade irritants like steel and aluminum tariffs to addressing protectionist concerns stemming from the Inflation Reduction Act or the Carbon Border Adjustment Mechanism.

 

This is not to say that competition does not or should not exist, including among allies. But from an industry perspective, these rifts have resulted in missed opportunities.

 

As geopolitical crises continue to test both the transatlantic relationship and rules-based international order, the EU and the United States must act as partners before competitors. In this era of disruption, closer cooperation is essential to our mutual prosperity and security.

 

That’s why next week’s TTC is so important – it offers a window of opportunity to close the gaps on several digital trade and governance matters before both sides lean into election mode. Specifically, this means making firm commitments in four key areas.

 

 

1. Rebuild the transatlantic digital trade agenda

 

Digital technologies and data flows are not only important for “big tech” – an umbrella term that is often erroneously used to classify companies with completely different business models – they are the lifeblood of businesses across all sectors of the economy, including healthcare, financial services, transport, logistics, machinery, energy, and agriculture. Today, digital trade is trade – and a critically strategic area for both the United States and the EU, who are the two largest net exporters of digitally enabled services to the world.

 

As a first step, the United States should return to the leaders’ table. The U.S. Trade Representative’s decision to withdraw from WTO discussions on data flows, for example, was a disastrous 180 on digital trade. The move not only undermines American leadership, but it also threatens to intensify the ongoing fragmentation of the global digital economy. The extremely difficult road to renew the WTO Moratorium on customs duties on electronic transmission this year demonstrates the reals risks when the United States abandons its digital trade leadership.

 

While the EU is moving towards a more flexible digital trade approach, as shown by the recent EU-Japan deal on cross-border data flows, both Brussels and Washington should realign and reaffirm their approaches to maintain their common leadership in the global digital economy.

 

 

2. End discriminatory policies

 

We are seeing too many examples of policies pursued in the name of “sovereignty” or “strategic autonomy” that threaten to restrict market access based on where a company’s headquarters is located rather than on legitimate national security reasons.

 

For example, the EU is still considering introducing sovereignty requirements for companies to qualify for the highest level of the Cybersecurity Certification Scheme for Cloud Services (EUCS), despite strong opposition – notably from European cloud users – that such non-technical requirements will reduce their choice to use the technologies they need. As a result, adopting a mechanism to harmonize cybersecurity requirements for cloud services across the EU continues to be delayed, undermining resilience and competitiveness in Europe.

 

In the same spirit, IBM continues to oppose “Buy America” U.S. procurement provisions that discriminate against our closest partners and allies and raise costs for the U.S. taxpayer.

 

Such discriminatory approaches should not happen between the EU and the United States. Governments can achieve strategic autonomy by working with trusted partners who share their values. Such an approach will make us stronger and more resilient against external shocks, not weaker.

 

 

3. Refocus the TTC on clear, achievable goals

 

Too much time and resources have been spent on trying to resolve trade irritants: rather than getting stuck on ongoing trade disputes and regulatory divergences, the EU and the United States should build on the initial successes of the TTC and focus efforts on common interests and where convergence is most likely.

 

Fast-paced technological advances require that our joint resources should prioritize building a transatlantic governance agenda for critical technologies, including AI, quantum computing, and semiconductors. For example:

 

• Since the launch of the TTC, IBM has called for the EU and the United States to chart a common path for the ethical advancement of AI. Leveraging the successful role played by the TTC in the Hiroshima AI Process, Brussels and Washington, with the support of trusted private sector partners, should advocate for open, risk-based approaches to AI on the global stage through organizations like the OECD, WTO, and G7 to ensure standard setting and interoperability.

• The TTC should serve as a key platform to prepare for the era of quantum computing by promoting early-stage experimentation in industrial application and deployment, incentivizing private-sector investment, and preparing critical infrastructure for migration to quantum-safe standards, notably aligning standards for post-quantum cryptography. The TTC should also lead international efforts to establish a common licensing regime among like-minded nations for quantum exports. Such a regime would support transatlantic competitiveness and foster greater quantum technology collaboration among allies while preserving national security.

• It is critical that the EU and the United States coordinate on semiconductor investments and supply chain resilience. Building on such cooperation and leveraging their respective CHIPS Acts, transatlantic efforts on this issue should go beyond manufacturing and prototyping to include deep and sustained cooperation between researchers, laboratories, academia, and industry, as well as ambitious skills programs to resolve the severe shortage of qualified semiconductor workers.

 

 

4. Make the TTC a nimble and permanent structure with increased stakeholder input

 

To make the TTC more resilient against potential upcoming political changes, a nimbler structure with a refocused mission and fewer working groups would make it more agile and help it deliver on commitments. What’s more, the TTC should become a permanent structure that allows more formal and meaningful stakeholder input, for example:

 

• A CEO dialogue, composed of an equal number of selected European and American companies, appointed by EU and U.S. government leaders on a rotating basis. Based on the U.S.-India CEO Forum model, could develop joint recommendations to help implement the TTC’s agenda and deliverables.

• Industry and civil society expert committees, meeting on a regular basis, could provide more informed technical and business perspectives beyond the existing engagement with policy experts and associations.

 

Regardless of the outcome of the elections on both sides of the Atlantic this year, the EU and the United Sates should double down on efforts to reinforce the transatlantic relationship. Next week’s EU-U.S. TTC ministerial might be a make-or-break opportunity to firmly establish the Council as a meaningful forum for transatlantic collaboration. We hope both governments deliver strong outcomes. Policy leaders should not squander this moment.

 

 

 

 

-Amelie Coulet, Senior Manager, IBM Government and Regulatory Affairs Europe

 

 

 

 

 

 

 

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