Supply Chains Are Top Issue at TTC, EU Official Says
The European Union head of trade in the Washington embassy said that the value of the Trade and Technology Council is less in trying to resolve differences in regulatory approaches and more in trying to prevent new barriers to trade.
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Tomas Baert said the TTC is not talking about genetically modified organisms or Internet privacy regulations, but they are agreeing "before we each go our ways" on new topics, "can we each check in with each other?" He said that doesn't mean the U.S. and the EU have to have the exact same approaches.
He said now, the No. 1 issue at TTC is the supply chain, both critical minerals and semiconductors, including talking about the guardrails around domestic subsidies for semiconductor production. "It's important we do not create overcapacity and we really target in a smart and strategic way," he said. He said that the TTC is going to produce more concrete action as it's moving into the project stage.
Baert, Beth Baltzan, senior adviser to the U.S. trade representative, and Charles Lichfield, deputy director of the Atlantic Council’s GeoEconomics Center, spoke during a May 19 webinar hosted by the Atlantic Council about global supply chains and the trans-Atlantic economy.
Baltzan emphasized how the push to maximize profits through sourcing from lower-cost countries and using lower tariffs on American goods as an incentive to get agreements are both approaches that should be left behind.
She said the fact that the TTC is trying to solve specific problems rather than reach a broad FTA "is a real step forward."
Baert said that while the EU shares much of the USTR's diagnosis that globalization left some groups behind, and that countries have to make sure they are not importing goods made with exploitation of people or the planet, free trade is still its North Star. "You may say it's a 20th-century sort of tool," he said to Baltzan, quoting the USTR. "We still believe in FTAs. We still want to expand our network." The EU has far more FTAs than the U.S. -- 45, compared with 14. He noted during the webinar that the EU has restarted talks with India in the hopes of arriving at an FTA.
Lichfield said that businesses are always going to seek to maximize profits, and asked how policymakers will manage the contradiction that they want to find new markets to sell into, such as India, with the fact that large developing countries have not signed onto the effort to economically isolate Russia after its invasion of its neighbor Ukraine.
"We often say that India is like-minded; we have said in the past that Brazil is like-minded," he said. "We now know these countries are slightly opportunistic. The recent crisis has revealed we aren’t that like-minded. How can we square this circle?"