June 2021

By Mathilde Defarges


Transatlantic ties off to a good restart

As Joe Biden wraps up his short Europe tour, he seems to have convinced his European interlocutors that America is back. On issues ranging from trade, to climate change, to security, the Biden administration’s conciliatory tone this week stood in stark contrast to the more confrontational rhetoric of the previous administration. However, despite Washington and Brussels’ shared desire to revitalize transatlantic ties, the new U.S. president’s visit also showed how intractable some of the relationship's irritants remain. Nevertheless, the slew of new initiatives announced in the wake of Biden’s trip demonstrate the United States and its European allies’ strong resolve to work together to face some of the defining challenges of the 21st century.

Partnering up on technology

One of the more high-profiles announcements to come out of the many meetings between American and European officials over the past few days was the establishment of a high-level EU-US Trade and Technology Council (TTC). While the specifics are still in the works, the TTC aims to bring together officials from both sides of the Atlantic to “grow bilateral trade and investment,” for instance by avoiding the creation of new technical barriers to trade, or by working together around standard-setting issues. On tech specifically, a newly proposed EU-US Joint Technology Competition Policy Dialogue aims to foster cooperation in areas such as biotechnology or cybersecurity.

These new initiatives could help smooth over long-standing disagreements on the enforcement of competition rules in the tech sector. It remains to be seen whether they will lead to more coordination on antitrust actions targeting the likes of Google, Apple, or Facebook. In addition, these new initiatives will take time before offering concrete solutions to issues such as the ongoing interruption of transatlantic data flows or the EU’s plans for a new digital tax, which the United States opposes.

Similarly, the announced transatlantic partnership on semi-conductors is an encouraging first step rather than a fully-fledged strategy. Brussels and Washington announced their intention to work together to secure the supply chains of these components crucial to high-tech products such as electronics and electric vehicles. Yet given the limited amount of semi-conductor manufacturers and the high barriers to entry in the sector, how both capitals intend to strengthen their position without competing with each other remains to be seen.

Irritants remain on trade

Beyond tech, the U.S. and the EU agreed a five-year truce in the 17 years-long legal battle over subsidies to Airbus and Boeing. Again, the agreement is both encouraging and somewhat underwhelming. On the one hand, the battle over both aircraft manufacturers has embittered transatlantic trade relations for almost two decades. In that context, the ceasefire provides room for both parties to work toward a more sustainable solution. On the other hand, the truce at best delays enforcement of the multi-billion tariffs with which both parties are threatening each other. Moreover, the terms of the ceasefire leave ample room for a resumption of trade hostilities before its five years are up.

Even more problematic, the tariffs imposed by the Trump administration on EU steel and aluminum remain in place. Retaliatory tariffs imposed by the EU on American imports like bourbon whiskey and Harley-Davidson motorbikes remain similarly untouched. No truce or ceasefire here, only the establishment of yet another working group with the aim of moving forward within months.

A clear intention to work together

Lingering disagreements over old disputes and uncertainties over new initiatives should not overshadow the positive disposition of U.S. and European officials after Biden’s trip. On the European side, there was a clear acknowledgment of the need to confront China’s growing economic and geopolitical assertiveness. China was explicitly mentioned in the communications put out by the G7NATO, and the EU over the past few days. On the U.S. side, the Biden administration renewed its commitment to the fight against climate change and to the protection of multilateral institutions that had been sidelined under Trump. Finally, both sides of the Atlantic were united in their resolve to accelerate the end of the COVID-19 pandemic globally.

Over the past several days, Washington and Brussels’ eagerness to repair ties damaged since 2016 was apparent from their willingness to elevate each other’s priorities. On the trade and tech front, a flurry of new initiatives create space for dialogue and coordination between both capitals. As demonstrated by remaining uncertainties around the Airbus/Boeing dispute or the tariffs that are still in place, these new lines of communication will be essential for democratic allies across the pond to be fully capable of addressing challenges such as climate change or the rise of China. Biden’s visit to Europe was never going to make all the issues in the transatlantic relationship vanish overnight, but it has paved the way toward a revitalized partnership.