The USA and the EU are planning an “early warning system for semiconductor bottlenecks”.
(Photo: Moment/Getty Images)
College Park The negotiators met in rooms with loft character, surrounded by a campus with industrial charm: The third meeting of the Transatlantic Council for Trade and Technology (TTC) was all about future industries. The University of Maryland, about 20 minutes from the US capital Washington, has a strong tech focus. Appropriately, the USA and the European Union decided here on Monday to expand their semiconductor cooperation.
A mutual “early warning system for semiconductor bottlenecks” is planned. “The last few years have reminded us all of the importance of having resilient supply chains,” said US Secretary of State Antony Blinken. The aim of the expanded cooperation is “more diverse and resilient supply chains that benefit industries on both sides of the Atlantic”.
The chairman of the Trade Committee in the European Parliament, Bernd Lange (SPD), sees this as progress. An early warning system “could make a real difference in real life,” he said.
However, there has been no rapprochement on one important conflict, even though time is of the essence. In less than four weeks, the US government wants to introduce tax breaks for buyers of electric cars. But these only apply if the vehicles were assembled in North America and a certain proportion of the battery parts come from the USA. The Europeans accuse the USA of protectionism, manufacturers from the EU fear disadvantages in the American market. Brussels is therefore pushing for an exception rule.
Top jobs of the day
Find the best jobs now and
be notified by email.
The dispute over the massive US subsidy programs for green technologies is straining transatlantic relations. With an anti-inflation package (“Inflation Reduction Act”) passed in August, the USA is pumping subsidies and tax breaks totaling 369 billion US dollars into the domestic green tech industry. Many foreign competitors are left out.
“Still a lot to do” – the e-car dispute remains
Last week, after a meeting with French President Emmanuel Macron, President Joe Biden admitted that there were “minor flaws” in the law. Macron condemned the anti-inflation package as a “job killer”.
The final declaration of the TTC now states: “We recognize the concerns of the European Union and underline our obligation to address them constructively”. A specially set up task force on the “Inflation Reduction Act”, led by officials from the White House and the European Commission, will try to find solutions, it said.
“We are leaving this session a little more upbeat than we went into this session,” Commission Vice-President Valdis Dombrovskis said in Maryland. But there is still “a lot to do”.
>> Read here: Von der Leyen’s debt fund faces massive resistance
The US Treasury – the agency implementing the package – has little leeway to adapt it to suit Europeans. Congress will probably not touch it again either. “We have no plans for the law to be changed in Congress,” the White House said on Friday.
However, after the TTC meeting, Blinken emphasized that the differences could be resolved. They “never intended to put our European friends at a disadvantage,” said Blinken. But there will be no fundamental turnaround, he made clear. Blinken called the anti-inflation package “the most significant investment in the future. Ultimately, it benefits our planet.”
The President of the Commission says that the EU economy still needs to learn how to strengthen itself.
(Photo: Bloomberg)
Vice-President of the EU Commission, Margrethe Vestager, said the TTC addressed “that there is a real concern at the European industrial base”. However, Europe must “also do its homework” to strengthen the domestic economy in the face of high energy prices and global challenges.
Europe is working on its own offensive
EU Commission President Ursula von der Leyen called for a major industrial policy offensive by the Europeans on Sunday, also as a reaction to the billions in packages from the Americans. The head of the Commission advocated relaxing European state aid law in order to enable more government investment in the energy transition.
The Trade and Technology Council was created in 2021 to allow Europeans and Americans to coordinate on trade, business and technology issues. For example, the US and the EU want to increase cooperation to study the impact of China’s global influence on medical devices. Cooperation in the field of artificial intelligence or quantum informatics is also planned. Both sides also want to finance digital infrastructure projects in developing countries.
According to some experts, the TTC, established in May 2021, falls short of expectations. “After a committed start, the TTC is now stuck,” experts from the German Society for Foreign Relations recently analyzed. The Ukraine war initially welded the EU and the USA together, also because of the joint sanctions against Russia. “Now the economic consequences of the war threaten to undermine transatlantic unity.”
Read more: Commentary – Biden’s protectionism is a necessary wake-up call for Europe