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President Biden has been in office for one month, and his Administration’s focus on revitalizing ties with Europe is already clear. Similarly, the EU’s just-released trade strategy acknowledges the importance of the transatlantic relationship and recognizes the opportunity that the arrival of a new U.S. Administration heralds. Workers, businesses, and consumers are beneficiaries of the transatlantic economic relationship: Nearly 16 million jobs depend on transatlantic trade and investment, and more than $3 billion worth of goods and services crisscrosses the Atlantic every single day. Given the drift and malaise that has afflicted the relationship in recent years, the focus on renewal is welcome. But the window to accomplish tangible results is not infinite, and concrete actions by both sides is imperative.
The U.S. Chamber recently shared an ambitious list of policy priorities for the new Administration to consider.
The United States and Europe agree on the big picture priorities: beating the COVID-19 pandemic, restoring our economies to sustainable growth, responding to climate change while protecting our competitiveness, and confronting the systemic challenges posed by China’s unfair trading practices and human rights abuses.
There are real opportunities to demonstrate quickly a commitment to better ties:
- The United States should rescind tariffs on European steel and aluminum, and the European Union (EU) should lift its countermeasures.
- The long-running large civil aircraft disputes are ripe for a negotiated settlement that would allow the termination of punitive tariffs.
- A lasting agreement to replace Privacy Shield and ensure the transatlantic digital economy remains connected is essential.
A formal platform for collaboration would be welcome. The European Commission has proposed an EU-U.S. Trade and Technology Council, which the U.S. Chamber endorses. This must have cabinet-level support, meaningful stakeholder engagement, and a laser-like focus on eliminating commercially significant barriers to trade and investment. We’re not naïve: A new council won’t resolve all our differences. That’s especially true in areas like the digital economy, where the EU is heading down a worrying path, threatening discriminatory actions on tax and competition policy. Still, a formal construct would be useful — provided it yields tangible near-term improvements.
If building goodwill and a politically-sanctioned structure for cooperation are critical — as we think they are — recent European moves raise questions about our ability to move from lofty expressions of support to demonstrable benefits.
Take vaccines. Carrying out the research and development to devise a vaccine, testing it for safety and efficacy, and then manufacturing, distributing, and administering it to millions of people requires seamlessly integrated supply chains and close collaboration between the public and private sectors. So the EU’s new export authorization scheme is troublesome; it may even endanger the procurement of critical inputs. We believe Brussels should instead ensure all export authorizations are granted automatically, even as they rightly seek transparency regarding volumes and destinations.
Next, consider China. President Biden has made clear he wants to work with allies to respond to Beijing’s malign behavior. It’s not surprising that the new Administration was disappointed that Europe announced its investment agreement with China just before the new team took office in Washington. Whether intended or not, the decision to close the deal when they did raises questions about whether Brussels is more interested in partnership or triangulation.
The next few months are critical if the transatlantic relationship is to be the powerhouse we know it can be. Early wins on tangible trade irritants will encourage greater collaboration on the big issues like the pandemic and a safe return to travel, tackling climate change, harnessing the global digital economy as an engine of growth, delivering on WTO reform, and making meaningful progress on a joint agenda towards China.
The business community is ready to roll up our sleeves and get to work with officials on both sides to strengthen the transatlantic relationship. Let’s get going.