Tightening Screws on Autocrats: Russia, China Loom Large at EU-US Trade and Tech Meeting

Written by | Wednesday, May 18th, 2022

The global fallout from the Russian invasion of Ukraine — this was the overarching topic on the agenda of a trans-Atlantic forum originally meant to bring Washington and Brussels closer on digital and trade issues.
But the second meeting of the EU-US Trade and Technology Council (TTC) near Paris on Monday (16 May) has switched gears to tackle global trade and supply chain disruptions sparked by Russia’s ongoing aggression in Ukraine. “We already had a working structure in place at the TTC, lots of contacts and members in the working groups in the EU and the US were already working together when Russia invaded Ukraine,” a senior European Commission official involved with the negotiations said in a briefing. “So it was easy for us to change track and help target Russian trade and technology,” the official said. To that end, the joint statement from the TTC meeting mentions Russia several times, highlighting the council’s groundwork in coordinating export controls and sanctions against Moscow, stressing that both parties plan to “enhance their cooperation” and information exchange on dual-use technologies and export controls.
“The pandemic and events in Ukraine remind us that the partnership between the EU and the US is fundamental and should continue to intensify, both in depth and scope,” says a statement from Renew Europe, a liberal, pro-European political group of the European Parliament. “In uncertain times and in an unstable world, such a partnership is an important building block for our shared prosperity.” Drago? Tudorache, a Romanian MEP says that “the TTC can become a pillar of this alliance, a forum for the EU and the US to coordinate on everything from export controls vis-à-vis authoritarian regimes to supply chain security, standards for new and emerging technologies, joint positions in international standardization fora, and rules governing technologies such as artificial intelligence. We can no longer afford to let others write these rules. For this, we need to give strategic priority to the work of the TTC and to strengthen it with an inter-parliamentary dimension.”
The EU and the US are now being seen as closing their ranks to shut Russia out of the global economy as well as to shore up their own capabilities for everything from critical minerals to advanced microchips. “The war has changed not just Europe, but also the world,” Margrethe Vestager, European Commission executive vice president in charge of the bloc’s digital agenda, has recently said in an interview. She added that the global instability sparked by the Ukraine conflict had eclipsed lingering irritants in EU-US relations. Beyond Russia, the TTC aims to fight wider cybersecurity threats and clampdowns on freedoms. Technology is being used to “perpetrate human rights violations and abuses, engage in forms of repression and undermine the security of other nations,” the statement added.
The TTC statement also talks of setting up an early warning system to better predict and address potential semiconductor supply chain disruptions and a trans-Atlantic approach to semiconductor investments to boost their production in the US and Europe. But with its focus on the Russian invasion of war, the TTC barely mentioned China in its joint statement, though clearly the elephant in the room is how to deal with China. Still, many of TTC’s initiatives — investment screening, trade challenges, semiconductor supply chains — were initially directed at China. The Asian giant remains the dominant player in the semiconductor industry, with Chinese-owned firms buying chip companies around the world in recent years, raising concerns that Beijing could soon dominate certain sensitive technologies and use that as a strategic advantage. Also Europe’s “green transition”, designed to move away from Russian fossil fuels and invest heavily in renewables, increases the EU’s reliance on China. The Asian economic powerhouse dominates in key parts of the value chain when it comes to wind power, solar energy and electric batteries. But unlike Washington, Brussels has been keen to stress TTC should primarily be about working together, rather than targeting one particular country.

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