New Report Warns US Officials Not to Give Away the Store in Coming US-EU Trade and Technology Council Meeting

WASHINGTON—As a delegation from the Biden administration’s senior economic and trade team prepares to host EU counterparts for the inaugural meeting of a new U.S.-EU Trade and Technology Council (TTC), a new report from the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy, urges U.S. negotiators to hold firm in defending America’s pro-innovation regulatory system and resist acquiescing to Europe’s precautionary approach to regulating competition and digital technologies.

“Given the simmering tensions on issues like digital taxation, cross-border data flows, and antitrust, a high-level forum like the TTC is overdue. But no matter how much the White House may want to restore comity after the Trump era, it can’t define success as increasing cooperation for its own sake. We need to advance key U.S. economic interests at the same time,” said ITIF President Robert D. Atkinson, who authored the report. “The risk is that the European side will press the United States to harmonize its regulations with the EU by taking a precautionary approach to data privacy, artificial intelligence, and Internet platforms—which would skewer America’s leading tech companies above all others and kill U.S. jobs. We shouldn’t do that, nor do we need to. Our interests are broadly aligned and compatible—particulaly when it comes to China.”

For the TTC to produce tangible benefits, ITIF’s report outlines four strategic questions the U.S. delegation should consider before engaging in negotiations:

1. Should the principal focus be on shaping technology to address social concerns or advancing technology to drive progress and growth? The United States should stress the latter, not only because there is a significant risk that digital transformation will be too slow—which would have adverse effects on economic growth—but also because most of the social concerns are best addressed at the national level not at the international level.
2. To what extent should reaching an agreement and restoring more harmonious relations trump advancing key U.S. interests? After weakening transatlantic ties in the Trump administration, many U.S. foreign policy experts desperately want to restore good relations with their transatlantic allies. While certainly a useful goal, the desire for comity should not come at the expense of protecting key U.S. economic interests. The U.S. government should first defend U.S. economic and technology interests against problematic EU policies.
3. To what degree should the TTC work to craft common regulatory approaches versus allowing each region to develop its own? While harmonized regulations are generally better than disparate ones, this should not mean adopting similar EU regulations, which harm digital innovation and competitiveness. The United States should defend differential regulatory systems while insisting on full cross-border trade, with U.S. imports and operations in the EU complying with EU rules.
4. How much should the U.S. delegation press the EU to join it in its fight against Chinese innovation mercantilism and digital authoritarianism? It is in the interests of the United States and the EU to press China to roll back its innovation mercantilist practices that demonstrably harm global innovation and digital freedom. The U.S. delegation should press the EU side to commit to concrete joint actions.

“The price of comity can’t be giving away the store,” said Atkinson. “To build a better, stronger, and broader transatlantic digital relationship, the parties should start by agreeing on the principle that advancing digital innovation is in everyone’s best interest. Given the increasing threat China poses—and the countervailing benefits that would come from resolving digital policy disputes between the United States and the EU—the TTC has significant potential. America and Europe can achieve progress together without merging their regulatory systems into one. We can and should maintain separate, but compatible systems and identities.”

Read the report.