In One Sentence

• USTR Katherine Tai sees trade dispute resolution with the European Union (EU) as a good foundation for a transatlantic partnership to address systemic global trade and investment issues involving China.
• Commerce Secretary Gina Raimondo expects the U.S. and the EU to reach an enhanced arrangement on Privacy Shield, a transatlantic data protection compliance mechanism, in the near future.
• A USTR official says the U.S.-EU Trade and Technology Council (TTC) can help foster compatible trans-Atlantic regulations for new technologies without impeding trade.
• A senior EU official raised concern about electric vehicle (EV) tax credits in the Build Back Better bill, citing discrimination against the EU.

Mark the Essentials

• Ambassador Tai has lauded the U.S.-EU trade and tariff détente over steel, aluminum, aerospace and digital services, which allows both sides of the Atlantic to manage their differences and thereafter address “non-market and non-democratic” global challenges such as China, as the “significant accomplishment” of the year. 
• Despite Secretary Raimondo’s emphasis of the Privacy Shield as the administration’s top priority, former USTR officials and data industry experts caution that the negotiation may still remain too complicated to produce meaningful deliverables in the near future. 
• C.J. Mahoney, Deputy U.S. Trade Representative under the Trump administration, said that meaningful deliverables from the TTC are unlikely without a deal regarding a successor to the Privacy Shield mechanism. 
• Valdis Dombrovskis, European Commission Executive Vice President and Trade Commissioner, said the EV tax credits in the House-approved Build Back Better plan, which requires eligible EVs be assembled in a unionized plant in the U.S. discriminates against European companies and violates commitments made by the U.S. at the World Trade Organization (WTO).

Keeping an Eye On…

• In stark contrast to the Trump administration years, the U.S. and the European Union made laudable progress in 2021 towards resolving many of their long-standing trade irritants. These include the long-running Boeing-Airbus WTO dispute as well as the Section 232 tariffs on steel and aluminum imposed by the Trump administration. The Trade and Technology Council (TTC) in particular was proven effective in restoring and enhancing communication as well as in initiating and coordinating a number of transatlantic workstreams on critical trade, investment, industrial subsidies and digital policymaking issue areas. Thus far, these achievements align with the Biden administration’s overarching goal to rebuild trust and strengthen partnerships with like-minded European allies and jointly tackle a number of challenging market distortion issues involving China. That said, 2022 is likely to throw up as many challenges as convergences for Washington and Brussels as they grapple with their long-standing differences on data privacy, ‘digital sovereignty’ and regulation of emerging technologies. As Commission VP Dombrovskis’ recent shot across the bow attests, old-school trade protectionism challenges practised by the Biden administration in the name of its ‘worker-centered’ trade policy—in reality, a political play to score points with Rust Belt workers—will also not be far from the surface. 

Expanded Reading

• Remarks of Ambassador Katherine Tai at Chamber of Commerce’s Transatlantic Business Works Summit, Office of the United States Trade Representative, December 8, 2021
• Transatlantic Business Works Summit Day 1, U.S. Department of Commerce, December 8, 2021
• EU Warns U.S. Electric-Vehicle Subsidies May Inflame Tensions, Bloomberg, December 6, 2021 [Paywall]
• Aspen Berlin Conference on Artificial Intelligence, The Aspen Institute Germany, December 3, 2021