China watchU.S. and EU, Wary of China, Forge Alliance on Technology
With Beijing on the rise as a tech superpower, Brussels and Washington want to close ranks. But divisions loom over the new “Trade and Technology Council” alliance — and previous efforts have a mixed track record.
The chip crisis turned dire when the coronavirus hit. As demand for electronics was skyrocketing in the spring of 2020, manufacturers warned they were running short of semiconductors — key components needed to make devices from smartphones to cars.
They had good reasons: In the following months, the shortage forced factories to shut down assembly lines. Tech companies postponed product launches. Computers were delivered months too late.
Worried about the fallout, politicians from Washington D.C. to Berlin called up chip-manufacturing countries and asked them to help prioritize orders from their countries.
But there was only so much they could do: The chips, which are made by just a handful of firms, are notoriously hard to produce. And there just were not enough for everyone.
“A U.S.-EU Partnership”
A year and a half later, the shortage persists — curtailing, for example, the production of new cars.
That is why manufacturing more chips in Europe and the US will be high up on the agenda when top US and EU officials gather on Wednesday in Pittsburgh for the first meeting of the “EU-US Trade and Technology Council” (TTC).
“We commit to building a US-EU partnership … to design and produce the most powerful and resource-efficient semiconductors,” the White House said in a statement.
Other discussions at the TTC will be about coming up with principles for artificial intelligence technology; how to boost cybersecurity in an increasingly unstable digital world; and how to push joint technology standards on the international stage.
The meeting will be co-chaired by the EU’s digital chief Commission Executive Vice-President Margrethe Vestager and Trade Commissioner Valdis Dombrovskis, as well as US Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo and Trade Representative Katherine Tai.
Far from Seeing Eye to Eye
The chip crisis was an eye-opening moment for policymakers on both sides of the Atlantic, illustrating how important access to technology has become for maintaining geopolitical dominance, according to conversations with US and EU officials involved in preparing the TTC meeting, who spoke on the condition of anonymity because the talks are confidential.
But finding common ground during the two-day meeting will not be easy.
Not only was the event overshadowed by news that the US had quietly negotiated a security agreement with Australia and the UK, wrecking a multi-billion-euro French submarine deal.
The US and the EU have been at loggerheads over how to regulate new technology for years.
