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Rethinking the U.S.-EU Trade and Technology Council After Ukraine

Rethinking the U.S.-EU Trade and Technology Council After Ukraine
Written by Publishing Team

The Russian invasion of Ukraine has upended many expectations, not least in terms of transatlantic cooperation. Since the invasion began, there has been news between the United States and European Union (as well as other like-minded partners) on sanctions and export controls targeting Russia and its leadership. European and American companies have pulled out of Russian operations and investments, forgoing a market where they had been active, in some cases, for decades.

The full implications for the transatlantic economy are only slowly emerging. But one thing is already clear: as Russia’s aggression in Ukraine is the United States and European changing- there must also be changes in the primary forum for the USEU cooperation on economic issues of geostrategic importance—the US-EU Trade and Technology Council (TTC).

The TTC was launched in 2021 to facilitate greater US-EU cooperation in the trade and tech sectors. During a successful first meeting in September in Pittsburgh, the TTC leadership—Secretary of State Antony Blinken, Secretary of Commerce Gina Raimondo, US trade representative Katherine Tai, European Commission executive vice president Margrethe Vestager, and Executive Vice President Valdis Dombrovskis—confirmed the overall aim of coordinating approaches on major trade and tech issues. They also assigned workplans to the ten working groups and identified four priorities: supply chains (especially for superconductors), export controls, investment screening, and artificial intelligence (AI).

The second meeting at the leaders’ level is now confirmed for mid-May in Europe. Under normal circumstances, this meeting would probably have been aimed at demonstrating that the United States and European Union can agree to formal information sharing mechanisms on investment screening and export controls and shared definitions of trustworthy AI. But policymakers are no longer dealing with normal circumstances.

The TTC now must change—the May meeting will require a sharp shift in focus and an upgraded level of ambition. Some of this is already happening, and the TTC has played its part. Even though the working group on export controls had barely started to address the agenda assigned at Pittsburgh, the fact that key people had met and been given a mandate to cooperate facilitated the rapid agreement on export controls against Russia and Belarus. Sanctions had never been part of the TTC’s mandate, but the atmosphere of closer collaboration made both parties more knowledgeable about the other’s system—and what they could and could not do—and gave them confidence that superiors would view enhanced political cooperation positively.

In light of Russia’s invasion of Ukraine, it is time for the TTC to become a frontline mechanism for coordinating joint efforts between the United States and European Union. It cannot simply be a forum for discussion of common approaches to emerging tech questions. Certainly, such discussions are important and should not be abandoned. But the TTC can no longer make them its primary focus. At the May meeting, the TTC leadership should:

Make clear that it is no longer business as usual for the TTC. The challenge facing the transatlantic partnership is enormous. All of its institutions must contribute to facing this challenge. TTC leaders should make coordination regarding Ukraine a key priority when they meet, and in thinking about the next set of working group agendas.

Identify the economic isolation of Russia as a key goal of the TTC. The initial target of some TTC initiatives—investment screening, trade challenges, semiconductor supply chains—was China. China has not reformed its approach to global markets. But the issues it raises are not as urgent as adjusting supply chains to the total disruption of trade with Russia and ensuring that Russian companies have few, if any, opportunities for investment in the West.

Add sanctions to the list of TTC topics and create a new working group. The TTC will not be the only forum for discussing sanctions; Indeed, the urgency of imposing sanctions will often require that it will not be. But the TTC will encourage regular conversations about sanctions and their impact. Moreover, including sanctions on the TTC agenda will also recognize the interrelationship between sanctions, export controls, supply chains, and other measures.

Assign the supply chain working group to shift its focus from semiconductors to the impact of disruptions on trade with Russia. What are alternative supply options for oil and gas? How can the United States and European Union compensate for Russian and Ukrainian agricultural exports, which currently make up 26 percent of global wheat exports (and more of other farm commodities). Ukrainian wheat feeds livestock across Europe, but also feeds animals and humans across the entire world. Can the TTC identify alternatives in the supply chain that can ameliorate the threat of hunger in certain areas of the world?

Add to the agendas of other TTC working groups. The working group on the misuse of technology should become a key coordination mechanism for addressing Russian disinformation, while the working group on information and communication technology security should consider how the United States and European Union can help the Ukrainian government keep functioning communications in that country. Can the working group on small and medium-sized enterprises’ (SME) access to tech include a special component on Ukrainian SMEs (even though Ukraine is not a member of the EU)? Could the working group on technical standards examine not only how the United States and EU can better cooperate in standard-setting, but also ensure that standards are set with minimal Russian influence?

Bring like-minded countries into an expanded TTC framework. While the TTC was designed as a US-EU mechanism, and should remain so, there must also be room for conversations and coordination with other like-minded countries, such as the United Kingdom, Australia, New Zealand, Japan, and South Korea. These countries are already cooperating closely with the United States and EU on sanctions and export controls and should have some mechanism to encourage consultation on a less ad hoc basis.

Explore options for sustaining the Ukrainian tech sector. Before the invasion, Ukraine had a significant tech sector. Whether those companies remain in the country or move into exile, the United States and EU should find ways to support it—through money, technical support, and protection from cyberattacks—so that it can, in turn, support their country.

The TTC was launched as a mechanism to allow the United States and EU to address key issues of trade and technology together. It was meant to be an evolutionary process, with cooperative elements focused on emerging technologies. But the Russian invasion of Ukraine has launched a revolution in Europe and in the transatlantic partnership. The TTC must play its part in responding to that challenge.

Frances G. Burwell is a Distinguished Fellow at the Atlantic Council.

Image: Reuters.

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