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The whirlwind of summits held by President Joe Biden during a week in Europe (G7, NATO, US-Russia and bilateral meetings) may be perhaps the least commented on. EU-US summit last Tuesday there was a tidal change in the transatlantic relationship, and the west had little effect on the world.
The headlines focused on the most specific achievement: an agreement to end the long trade war over subsidies to aircraft manufacturers. Welcome, however, misses the summit and, most importantly, the most important part of the aircraft deal. A five-year suspension of trade sanctions may or may not resolve the Boeing-Airbus dispute. It is far more important that the conflict be parked, that good faith be restored, and that the two sides be committed to pursuing policies guided by their shared values and interests, rather than the issues they share.
The consequences go beyond conventional trade liberalization or the end of the tariff war since Donald Trump’s presidency. Europe and the US have increasingly instrumentalized trade policy in the service of non-trade values and geostrategic concerns. This trend will be much more coordinated.
The summit’s statement made it clear that trade is becoming a shared geopolitical tool, “to tackle climate change, protect the environment, promote workers’ rights, expand resilience … supply chains, among others.” in doing so, there is no doubt that “economies are not markets that are weakening the world trading system”.
The most significant result is the creation of the US-EU Trade and Technology Council. Count this as an EU score, that is he proposed this, in fact To the US administration in December. Brussels may be a little surprised that Washington has embraced the idea and how it has come to terms with it. The Council will consist of three Biden cabinet members — the Secretary of State, the Secretary of Commerce, and the Trade Representative — as well as various working groups, technology standards, and data governance, investment analysis, and security and human rights issues.
We can reasonably expect two positive results. One is a more aligned approach to governing the digital economy. This should facilitate deepening digital commerce and data transfers between the two economies. It helps the U.S. move quickly toward a more European approach to disciplining private technology companies. The last sign of that turn is Bidenena Appointment of Lina Khan, Critical of Big Tech’s market power, as a regulator of competition.
Second, there is more collaboration in standardization. This includes the Internet – the summit statement sets out “the goal of promoting a democratic model of digital governance” – but should be extended to physical technological standards. At a time when China is actively seeking it master the global standard setting, changes more narrow transatlantic perspectives.
I resigned in the face of the emergence of “splinternet” as digital barriers between the US, the EU and China grew, while they set different rules for the digital economy. I am now more optimistic that the distribution of regulation in the Atlantic can be minimized. This would radically change the balance of influence of governance and accepted standards elsewhere, and will increase China’s pressure to adapt to the Western model, rather than vice versa.
Of course, there is hard work to be done. Both sides are jealous of their regulatory sovereignty and are aware of competitive competition. Moreover, the previous corps of the cooperation councils are disappointed. But it’s different today: the perception of a common weakness is greater, the Trump era is fresh in people’s memory, and the sense that global economic rules are being rewritten quickly is overwhelming. Cooperation in writing new rules is more promising than trying to resolve the differences between the US and the EU over the old ones.
This will have nothing to do with the usual EU-US trade agreement. But that’s not the point. XXI. In the 21st century, trade policy has increasingly sought common approaches to internal regulation – smoothing trade flows, yes, but just as important as setting general rules of the game.
The summit has put the wind blowing within the Biden plan that the world’s democracies can work together to achieve better results for citizens than the alternatives promoted by the powerful around the world. Reinvigorated by the EU-US relationship, the old liberal world order lives on to fight for another day, and then some.
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