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In the whirlwind of summits held during President Joe Biden’s week in Europe (G7, NATO, US-Russia and a series of bilateral meetings), one of the least discussed may be the most consistent. The EU-US summit last Tuesday there is a tidal shift in the transatlantic relationship and the influence of the West in the world.
The headlines focused on the most specific achievement: an agreement to end the long trade war over subsidies from aircraft manufacturers. Welcome, even if it were, you miss what really mattered at the summit and, in fact, at the aviation deal itself. Suspending trade sanctions for five years may or may not resolve the Boeing-Airbus conflict. Much more important is for the conflict to be parked, for good faith to be restored, and for both parties to commit to policies guided by their shared values and interests rather than the problems that divide them.
The implications go far beyond conventional trade liberalization or ending the tariff war since Donald Trump’s presidency. Both Europe and the United States have increasingly instrumentalized trade policy in the service of non-trade values and geostrategic concerns. This trend will now be much more coordinated.
The summit statement makes it clear that trade is becoming a shared geopolitical tool, “to help fight climate change, protect the environment, promote workers’ rights, expand resiliently … supply chains. Even when China is not mentioned, perhaps with a nod to European pettiness, there is no doubt who is meant by non-market economies that are undermining the trading system. world ”.
The most significant result is the establishment of a US-EU Technology and Trade Council. Count this as a score for the EU, which proposed precisely that to the US administration entering December. You may even be slightly surprised in Brussels by the way Washington has adopted the idea and made it work. The board will be attended by three of Biden’s cabinet members – the secretary of state, the secretary of commerce and the trade representative – and various working groups on everything from technology standards and data governance to investment control. 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 the deepening of digital trade and data transfers between the two economies. It helps the United States move rapidly toward a more European approach to disciplining private technology companies. The last sign of this change is that of Biden appointment of Lina Khan, a critic of the power of the Big Tech market, as a regulator of competition.
The second is more collaboration in setting standards. This includes the Internet – the summit statement sets out “the goal of promoting a democratic model of digital governance” – but it should be extended to physical technology standards. At a time when China is actively seeking master the setting of world standards, a tighter transatlantic approach is a game changer.
He used to give up the emergence of a “splinternet”, with growing digital barriers between the US, the EU and China, as they set different rules for the digital economy. I am now more optimistic that the regulatory divide across the Atlantic can be minimized. This would drastically change the balance of influence over governance and standards adopted elsewhere, increasing pressure on China to adapt to the Western model and not the other way around.
Of course, a lot of work remains to be done. Both sides are jealous of their regulatory sovereignty and are aware of their competitive rivalry. In addition, previous incarnations of cooperation councils have disappointed. But today it’s different: the perception of joint vulnerability is greater, the Trump era is new to people’s memory, and the feeling that global economic rules are rapidly being rewritten is overwhelming. It is more promising to collaborate in drafting new rules than to try to resolve the differences between the US and the EU over the old ones.
None of this will make a conventional EU-US trade agreement more likely. But that’s not the point. In the 21st century, trade policy is increasingly trying to find common approaches to internal regulation: yes, to smooth trade flows, but it is just as important to set the global rules of the game.
The summit puts the wind in Biden’s plan to show that the world’s democracies can work together to deliver better outcomes for citizens than the alternatives promoted by strong men around the world. With the invigorated EU-US relationship, the old world liberal order lives on to fight another day, and then some.
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