This is how the EU and the USA want to overcome the trade conflict

Brussels, Berlin The Transatlantic Trade and Technology Council (TTC) may not be well-known, but officials’ hearts beat faster when it was launched last year. The EU Commission and the US government have agreed to work out common ground in future fields such as digitization, electromobility and artificial intelligence. With combined forces, they want to “shape the rules of the game for the economy of the 21st century,” announced Commission President Ursula von der Leyen and US President Joe Biden.

Little is left of the initial euphoria. When EU Trade Commissioner Valdis Dombrovskis met conservative economics ministers from some EU member states last week, he made his disappointment clear. Although the TTC is making progress, it is being “overshadowed” by the dispute with the Americans over subsidies for electric cars, he complained, according to participants.

The third TTC meeting will take place next week. Representatives of the Commission and the US government want to consult in Washington. But a draft of the final declaration, which is available to the Handelsblatt, shows that Americans and Europeans are far behind their own claims. The announced rules of the game for future industries have in practice shrunk to an agreement on the shape and technical specifications of charging plugs for electric trucks.

“We intend to continue working towards a common international standard to be adopted by 2024,” the truck connector document says. In addition, they are working on “joint recommendations for the state-funded development of charging infrastructure” to help e-cars achieve a breakthrough in Europe and the USA.

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Otherwise there is hardly anything tangible on the 22 pages of the summit declaration, instead: declarations of intent to work together on artificial intelligence, the laying of undersea cables and the promotion of the chip industry. The dispute over the Inflation Reduction Act (IRA) is only touched upon briefly – and referred to a task force.

With the IRA signed by Biden in the summer, the Americans want to pay out billions in subsidies for electric cars – but only if they were assembled in the USA. Europeans feel discriminated against. The conflict that is also simmering because of America’s sanctions against the Chinese chip industry is left out entirely in the TTC statement, although the EU is complaining about the effects on European companies.

Green group leader is in favor of a tariff agreement

Nevertheless, politicians, above all the German governing coalition, continue to have high hopes for the TTC that was set up last year. When it comes to questions about a trade agreement with the USA, representatives of the Greens and SPD in particular repeatedly refer to the Council.

The coalition wants to officially record this this week, and the decision on a trade agenda is on the agenda of the Bundestag for Thursday. It says: “We encourage our EU partners to deepen trade relations between the EU and the USA and to use the structures of the EU-US Trade and Technology Council for this purpose.”

Further trade policy approaches such as mutual tariff relief would first have to be “explored”. Green party leader Katharina Dröge is pushing ahead. “First and foremost, I think it makes sense to start talks on an industrial tariff agreement,” Dröge told Handelsblatt. Tariffs stand in the way of trade. “In view of the drastically changed geopolitical situation, however, we need this trade.”

It is remarkable that this push comes from Dröge of all people. The party left has made a name for itself as an opponent of the European-American trade agreement TTIP and the European-Canadian agreement Ceta, which Germany now also wants to adopt in the Bundestag on Thursday.

Catherine Droge

The Greens parliamentary group leader opposed the TTIP and Ceta trade agreements.

(Photo: dpa)

In order to make progress in trade policy, you have to convince Dröge, the Berlin traffic light government is unanimous. The Green politician does not generally reject closer trade relations, she had already attached her protest against TTIP and CETA to regulations on investment protection.

She stays with it. Her proposal for a customs agreement should not be understood as a new version of TTIP, she clarifies: “These should not be talks that could be in any way preliminary negotiations for a comprehensive free trade agreement, let alone the harbinger of a new version of TTIP. We don’t want that, the Americans don’t want that, and that doesn’t make sense either.”

However, with “we” she is likely to refer to the Greens. At the traffic light, there is increasing openness to a restart of a more comprehensive trade agreement. FDP leader Christian Lindner has been campaigning for this for months.

More Handelsblatt articles on the economic dispute between the USA and the EU

At an event organized by the Süddeutsche Zeitung, Chancellor Olaf Scholz (SPD) recently spoke out in favor of taking a “very close look at” the idea of ​​a free trade agreement with the USA. Such an agreement is “always better than a bidding war on subsidies and protective tariffs, as some see coming as a result of the American Inflation Reduction Act.”

A simple customs agreement, as proposed by Dröge, will not be easy to enforce. The foreign trade policy spokesman for the FDP, Carl-Julius Cronenberg, warned against “excessive optimism”. “US trade policy right now is focused on reshoring lost industries.”

More: Biden’s economic nationalism challenges the EU

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