The EU-US Trade & Technology Council: from ambitious work plans to concrete outcomes – DIGITALEUROPE – DigitalEurope

Executive Summary
Earlier this year, DIGITALEUROPE contributed concrete ideas to what the EU-US Trade and Technology Council (TTC) should achieve by 2024, and we offered a clear roadmap, supported with success indicators for the short and medium term, to each of its working groups (WG).
The brutal Russian invasion of Ukraine has since firmly put EU and US collective and respective digital resilience at the top of the agenda. The weaponisation of gas supplies by Russia has also made cooperation on energy security a must. As illustrated by the rapid and firm alignment of export controls and sanctions, the TTC is the right forum in which to achieve this as tech allies.
DIGITALEUROPE welcomes the steps already taken such as the convergence of approaches on Artificial Intelligence, and the promotion of sustainability. The TTC’s recognition of the enabling power of digital to cut emissions must be integrated into the EU’s and US’s respective climate action plans [1]
Over the past months steps have been taken to open avenues for communication and strategic cooperation, for example through the Strategic Standardisation Information (SSI) mechanism. In this paper, we have outlined concrete suggestions for six TTC working groups on shared EU-US policy priorities including standards, artificial intelligence, cybersecurity, 6G, data governance, export controls, and global trade challenges with the aim of complementing our previous publication with concrete objectives in time for the next TTC meeting.
 
Working Group 1: Technology standards
Working Group 3: Secure supply chains
Working Group 4: ICTS security & competitiveness
Working Group 5: Data Governance & Tech Platforms
Working Group 7: Export controls
Working Group 10: Global trade challenges
 
Recognising the importance of standards in securing key aims, such as the twin transition, national security, and open strategic autonomy, was a welcome first step taken at the inaugural meeting of the TTC. The focus of standardisation in critical and emerging technologies must remain industry-led and global, rather than transatlantic only. Otherwise, we risk global fragmentation.
At the same time as coordinating within the TTC, we encourage the EU and US to advance good practices on supporting industry participation in technical standardisation in international fora, in line with the WTO Agreement on Technical Barriers to Trade. Moreover, we commend the efforts under WG1 to coordinate EU and US work in international standardisation bodies, rather than working to set bilateral standards.
The more we can align with international standards the better. Many of the relevant international standardisation bodies already have strong liaison mechanisms in place. We encourage the TTC to make use of and strengthen these avenues for international cooperation to initiate industry-driven, voluntary, consensus-based, technical standards for technologies under consideration.
International standardisation is in its nature an inclusive process and the TTC must emphasise and reinforce this. The G7 Ministerial Declaration of 2021 emphasises the importance of key principles for international digital technical standards and opposition to government-imposed approaches that seek to fundamentally reshape the standards’ eco-system[2].
We urge a continued commitment to these principles. The best available expertise in the standards development process must remain engaged and encouraged to continue to contribute their expertise and technologies to the standards making process.
There is a wealth of existing best practices from which the TTC should draw – while ensuring standardisation processes remain industry-driven.
Concrete examples we highlight are accessibility and best practices for consumer Internet of Things (IoT) devices in the EU, as well as the Software Bill of Materials (SBOMs) and Cyber Threat Intelligence (CTI) standards including the Structured Threat Information Expression (STIX) and Trusted Automated Exchange of Indicator Information (TAXII) driven by the US. The TTC could coordinate to bring these best practices into the international arena, sooner rather than later, and use them to influence common policies and avoid fragmentation. Given its success in Europe over the past 10 years, we encourage the TTC to directly engage the EU’s Multi Stakeholder Platform on ICT Standardisation (MSP) in WG1 and consider actions to leverage and build on the good work done therein[3].
The EU and US have begun identifying areas of common interest and introducing mechanisms to support standardisation as outlined in Annex I of the joint statement, including the Strategic Standardisation Information (SSI) mechanism. We ask the TTC for further information on how the SSI will work, and to leverage the expertise and on-the-ground knowledge of the private sector. The mechanism should aim for maximum transparency as to which international standards have been adopted into EU or US repositories and, if applicable, what amendments they have undergone, while being transposed into the regulatory frameworks. Alignment on key policy initiatives and principles can help to develop standards that support mutually acceptable core values.
Meanwhile, we caution against government-controlled standards development work. We encourage the TTC to establish concrete mechanisms to include industry input into this SSI, as well as consulting stakeholders on the functioning of the instrument. Below we outline further recommendations to take cooperation forward on artificial intelligence – for which there is already a dedicated subgroup – and cybersecurity which we also see as a vital priority.
Forming a dedicated subgroup on artificial intelligence (AI) is an excellent first step by the TTC towards alignment on common principles for assessing AI risk levels. As the group continues to discuss areas of strategic interest, further communication is needed to express both parties’ intent to support the development of new industry-led international standards for artificial intelligence, as well as using and building upon existing ones.
We are not starting from scratch, and close coordination with the work of CEN/CENELEC JTC21 is vital. The subgroup should also recognise the ongoing work in ISO/IEC JTC1 SC42 as the main venue for AI and data, as well as SC40 which looks at organisational governance, and seek to build on these efforts.
We encourage policymakers, notably in the context of the identification of relevant standards for the implementation of the EU’s AI Act, to refer to and create international standards whenever possible. With regards to the AI Act, as a transatlantic AI risk management roadmap emerges, we urge policy makers to carefully consider the allocation of responsibilities along the AI value chain. For a transatlantic common approach to be developed, there needs to be clarity yet flexibility about the different roles for AI stakeholders.
We must recognise that domestic legislation has strong external effects when it comes to trade. Adhering to the least trade-restrictive measure in domestic law should remain a priority. By complementing and coordinating with WG10, WG1 has the shared goal of seeking to reduce trade barriers in regulation as well as in standardisation and certification.
While much of the focus of WG1 has been on AI, stronger cooperation on cybersecurity, from cloud to connected devices, would allow data to flow more securely across the Atlantic and contribute to the horizontal aim of resilience.
Specifically, local certifications schemes can act as a potential trade barrier, contradicting the goal of becoming tech allies and failing to recognise the economic importance and value of the transatlantic trade and investment relationship. It is vital that, wherever possible, certification schemes are based on international standards, are not duplicative and leverage the existing internal infrastructure for conformity assessment.
We encourage further reflection on how collaboration between the EU and the US can be reinforced on cybersecurity, particularly given the current context of the war in Ukraine. We see collaboration on international standardisation as a necessary step. Here we encourage the TTC to ensure that relevant EU and US experts are fully engaged in ISO/IEC SC27 and are contributing to the 27000 series of specification, especially related to cloud controls. EU cybersecurity schemes need to be based on international standards to the highest extent possible. The CEN/CENLEC JTC13 work on cloud controls represent a valuable approach that could be brought to the international level.
The TTC can also support transatlantic efforts to drive convergence on IoT cybersecurity requirements in ISO/IEC 27402, which are in the drafting process, and the European standards EN 303 645 for consumer IoT, as well as the newly requested European standards under the Radio Equipment Directive (RED) delegated act. It will make sense to pursue international efforts in these areas to avoid fragmentation.
 
The Paris Saclay Joint Statement and its annexes set out specific plans for cooperation on strengthening supply chains with respect to rare earth magnets, solar energy and semiconductors. DIGITALEUROPE welcomes engagement on these critical technologies which are vital to EU and US technological and sustainable ambitions in both the short and long term. In order to secure future preparedness in the context of the pandemic, we believe WG3 could also consider pharmaceutical supply chains, which we understand were part of initial scoping discussions of the TTC. For pharmaceutical products for example, research makes up a large part of the pipeline from drug candidate to approval. Therefore, the TTC could further contribute to resilience along the pharmaceutical supply chain by enabling global R&D through health data flows, and exploring common data models with the aim of interoperability across the Atlantic and supporting wider efforts such as the WHO work on data governance models. [4]
The TTC conclusions lay out the possibility for a permanent framework for monitoring and early warning mechanism in the semiconductor supply chain. We need to be able to jointly understand where our respective and collective weaknesses are, with the ultimate goal of ensuring long-term continuity, resilience and security in our supply chains.
There is value in EU-US collaboration – combined with engaging like-minded countries – to minimise the impact that sudden geopolitical developments, natural disasters, or other location-specific factors may have on supply chains. In doing so, it is important to maintain an agile approach to supply chain monitoring, while fully respecting confidentiality and trade secrecy requirements. For example, the TTC could explore ways to facilitate communications between actors along the supply chain, including chip suppliers, users and distributors. We believe this will be a more realistic and efficient supply chain management measure by governments, as opposed to any possible broad B2G data-sharing obligations with confidential and sensitive data in scope (e.g. on orders, production capacity[5]).
We also strongly emphasise the importance of transatlantic cooperation in semiconductor R&D projects. We suggest the creation of a taskforce, similar to that in WG4, involving industry, to explore the formation of consortia and projects of mutual EU and US interest. Critical areas for these R&D projects for chips should be raw materials, chip design, manufacturing, assembly, and packaging. In parallel, efforts could be driven by the TTC in semiconductor-related R&D such as advanced telecommunications, automotive, telecom infrastructure, machinery and connected devices. This work must once again be explored in the context of digital partnership agreements (DPAs) with like-minded partners such as Japan, Korea and Singapore. Taiwan should also be taken into the context, given its relevance in the global supply chain. Involving these partners in coordination and information sharing efforts is critical as semiconductors are a global industry.
Finally, efforts to encourage sustainable and long-term semiconductor value addition and manufacturing in the EU and US will only succeed if the necessary workforce skills are sufficiently available. This is a crucial complement to the financial support that the EU and US are currently considering. Along these lines, we also recommend the two sides use the framework of WG3 alongside WG9 to discuss joint efforts that may be undertaken to enhance workforce skills development and facilitate the cross-border movement of specialised workers involved in different parts of the semiconductor value and production chain.
 
Communication networks form part of the critical national infrastructure of a state. Russia’s war in Ukraine illustrated the importance of securing our communication networks. These are key to sharing information from the ground operations or tackling cyber and hybrid threats.
As digital technologies are no longer separable from security, we see emerging and disruptive technologies developing. These are expected to have an impact on defence and security. We call on the TTC to explore avenues for investment in critical emerging and disruptive technologies (EDTs) to further support the initiative taken by NATO members.[7]
Tasked with exploring concrete proposals on including public finance for third country projects and preparing for the next generation of communication technologies towards 6G, the TTC’s ambitious agenda sets off in the right direction with a focus on driving transatlantic alignment in 6G research and innovation.
In this effort, the complete picture of investment, research and innovation, and regulatory approaches must have an international dimension. WG4’s taskforce is assigned to explore projects for technology neutral public financing of ICT infrastructure in third countries, as well as ensuring there is no duplication between work well under way on the EU’s Global Gateway. It should include a stakeholder advisory group, bringing together transatlantic industry experts who stand to be directly involved. The goal remains to address security risks, increase resilience and foster diversification of suppliers, including in the wider ICT ecosystem. This cooperation should also explore synergies with international instruments such as the G7 Partnership for Global Infrastructure and Investment, as well as making use of the EU’s DPAs and trilateral structures such as the EU-US-Japan Trilateral.
Transatlantic cooperation on fundamental research of ground-breaking technologies is our goal. Companies and universities are already performing 6G research and industries on both sides of the Atlantic have committed significant resources and accrued expertise in this area. This expertise needs to be harnessed, including via transatlantic 6G research collaboration between interested stakeholders, including but not limited to universities and industries.
TTC WG4 must identify, specify, and align on transatlantic 6G research technologies and how to cooperate. A stakeholder workshop as committed in the Joint Statement is an excellent first step. This should be followed by bringing experts to the table to gather specific input on R&D initiatives already underway and identify areas in which the TTC can kick off this ambitious workstream, for example on energy efficiency and 6G, AI and 6G, edge computing for 6G, new sensing capabilities, antenna technologies and remote e-health for 6G.
 
The mandate of WG5 is as ambitious as it is important. With the EU’s Digital Services Act now finalised and content moderation remaining a vital priority for the US Administration, steps have already been taken to converge on common approaches to the protection of minors online, for researchers access to platforms and for addressing algorithmic amplification. This dialogue must remain open and inclusive.
We also welcome the desire of EU and US principals to establish the structured policy dialogue to work towards closer alignment on policies and avoid unintended outcomes. As with all efforts under the umbrella of the TTC, while the primary interlocutors are transatlantic, engaging international allies and like-minded countries would be beneficial. We invite policymakers to ground their work in key principles of open, rules-based trade and values such as non-discrimination, strong due process, and involvement of the private sector. The dialogue should serve to address regulatory measures being explored on both sides of the Atlantic and help work towards an outcome that facilitates and increases transatlantic trade and trust. Mutual consultations should ensure we maintain high standards on privacy, security, the rule of law, open and rules-based trade, and prevent the misuse of technology by authoritarian regimes.
As the EU launches plans for data spaces in strategic areas, TTC WG5 could also serve as a forum where a pilot for a common transatlantic data space can be launched to test data collaboration opportunities and data access needs for SMEs across the Atlantic.
 
The Russian war on Ukraine has further reinforced engagement on export controls, first and foremost between the EU and US, but similarly with other key partners. We welcome the continued strong alignment between partners on the reaction to the war raged by Russia where the EU and US can redouble efforts to ensure that their respective controls on exports of information and communications technology products to Russia are aligned and consistent. Both regarding these efforts and to the future of export controls, the principles agreed in the TTC are likely to find application elsewhere.
The EU and US should seek to continue alignment. Reciprocated recognition of each other’s control regimes would allow the reduction of administrative burden in double applicable jurisdiction and re-exports. A focus must lay on balancing expanding item lists for new technologies and reducing controls for technologies, that are generally available and therefore no longer sensitive. As DIGITALEUROPE, we observe that a number of “advanced” technologies have come under control, which one can no longer reasonably consider “advanced”. For example, with respect to technologies without encryption or with encryption that is explicitly decontrolled under Wassenaar dual-use control list decontrols of category 5 part 2.
Differences between EU and US approaches to export controls should be bridged. We call in particular for progress on intangible technology transfers and the use of cloud services,[8] a dialogue about which should be added to the work programme of TTC WG7.
 
On TTC WG10, we welcome the open, rules-based trading system and the goal of pre-empting trade barriers as a strong underpinning for the EU-US partnership and the TTC. It is paramount that the TTC promotes open, inclusive, and sustainable trade among its partners and across all working groups and outcomes of the TTC. Hence, we believe the TTC should strengthen and expand principles of international trade, including the national treatment and most-favoured nation obligations in the WTO General Agreement on Trade in Services (“GATS”) and the protection for undisclosed information obligation in the Agreement on Trade-Related Aspects of Intellectual Property Rights (the “TRIPS Agreement”). We further believe the TTC should contribute to reinvigorating the multilateral trading system and support the extension of the moratorium on customs duties for electronic transmissions.
To deliver on the dialogue envisaged in paragraph 3 of Annex X in the Saclay statement, the EU and US should identify an initial set of emerging trade restrictive measures in third countries that the two sides can prioritise for engagement. In selecting countries and measures, the EU and US should be guided by input from transatlantic business, and use the opportunities presented by parallel EU and US trade discussions with certain third-country partners.
 
As political leaders have outlined, success of the TTC depends in part on the upcoming steps where deliverables can have a real impact on citizens, workers and businesses on both sides of the Atlantic. We commend the TTC’s leaders on the already identified deliverables and stand ready to address deliverables beyond those, including on the more challenging topics of the transatlantic relationship, such as the risk of digital protectionism, emerging fragmentation and trade barriers.
To maximise the TTC’s long-term impact, the existing stakeholder engagement avenues – which we have contributed to and welcome explicitly – should be maintained and further expanded, also with a view to the next TTC Ministerial. Making the most of stakeholder engagement enables policymakers to bring specialists and industry experts around the table to discuss key topics.
DIGITALEUROPE supported the TTC’s goals and work since day one. We remain committed to driving EU-US cooperation forward and making the transatlantic relationship a partnership of ‘Tech Allies’.
 
References
[1] DIGITALEUROPE has put forward 8 ideas to accelerate the green and digital transition: https://www.digitaleurope.org/resources/digital-action-climate-action-8-ideas-to-accelerate-the-twin-transition
[2] The G7 Ministerial Declaration of 2021 affirms that “It is essential that the development of digital technical standards continues to be underpinned by transparency, openness of process and participation, relevance and consensus-based decision-making in line with core principles for standards development.andWe firmly state our opposition to any government-imposed approaches that fundamentally seek to reshape the digital technical standards ecosystem.”
[3] https://www.digitaleurope.org/resources/digitaleurope-response-to-the-standardisation-strategy/
[4] In our February 2021 publication, we provided concrete suggestion under WG1 that the TTC can pursue to support pharmaceutical research, interoperable approaches and facilitate health data flows https://www.digitaleurope.org/resources/becoming-tech-allies-24-targets-for-the-eu-us-trade-technology-council-by-2024/
[5] https://www.digitaleurope.org/resources/digitaleuropes-recommendations-for-the-eu-chips-act-making-the-eu-a-catalyst-for-semiconductor-investments/
[6] The EU sets out the target of production for cutting-edge and sustainable semiconductors in Europe to represent 20% of world production by 2030, in its Digital Decade targets. DIGITALEUROPE urges the TTC to set complimentary transatlantic targets towards digital and technological resilience.
[7] NATO showed impressive leadership in its collaboration with the private sector last year, setting up the advisory Group on EDTs and implementing the NATO investment Fund and the Defence Innovation Accelerator for the North Atlantic (DIANA).
[8] https://www.digitaleurope.org/resources/export-controls-tech-transfers/
[9] Such a strategy should include accelerating efforts to obtain binding commitments from other WTO Members to refrain from imposing customs duties on electronic transmissions (through respective EU and US trade negotiations), working with the business community (in developed and developing countries) to more clearly articulate the benefits and necessity of the moratorium for all aspects of international trade and investment, and exploring tools to disincentivize the imposition of duties on electronic transmissions by third countries.
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