US and EU team up to curb competition from China in trade and technology

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The European anger over the trilateral security pact in the Pacific signed two weeks ago by the United States, the United Kingdom and Australia, which openly disdains France and, by extension, Brussels, planned this Wednesday on the forum that representatives of the Administration de Biden and the European Commission will hold two days in Pittsburgh to launch the Technology and Trade Council (TTC); an alliance to increase transatlantic cooperation in the face of fierce competition from China and to value the global economic potential represented by trade between the two blocs.

For all these reasons, the call contains two objectives: implicitly the first, to shelve the diplomatic crisis caused by the pact with London and Canberra, and, specifically, to achieve a common approach on capital issues such as promoting the production of semiconductors, whose shortage is interrupting many supply chains around the world, as well as agreeing common positions on issues such as artificial intelligence and technology competition. Without mentioning it explicitly, the shadow of Chinese competition flies over the entire meeting.

Although the messages from both parties are conciliatory, the so-called nuclear submarine crisis, for which France lost a multi-million dollar contract in favor of the United States and the United Kingdom, came close to derailing the Pittsburgh meeting. Participating in the TTC’s inaugural forum are the Secretary of State, Antony Blinken, and the Secretary of Commerce, Gina Raimondo, as well as the Vice-Presidents of the European Commission Valdis Dombrovskis and Margrethe Vestager. That is, the first swords to reset a bilateral relationship touched not only by the Pacific pact, but also by the unilateralism that, in the opinion of the EU, entailed in Washington’s management of the withdrawal from Afghanistan.

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To overcome resentments, or at least reluctance, the same US president, Joe Biden, winked last week to Brussels. “We renew our commitment to the European Union, a critical partner in tackling the full range of challenges facing our world,” he said. Under this premise, Blinken addresses the meeting in Pittsburgh with the objective of “expanding and deepening transatlantic trade and investment,” an exchange that represents a quarter of global trade and almost half of global GDP, recalls in a note the Department of State. In 2019, direct investment from the EU in the US reached 2.8 trillion dollars, while that of the United States in the 27 was 3.5 trillion. That same year, direct investment in the US by the EU supported five million jobs; conversely, they were 4.9 million.

The forum launched in Pittsburgh was announced last June during the US-EU summit by Biden and the president of the European Commission, Ursula von der Leyen. The TTC is in practice composed of ten working groups whose objective also ultimately encompasses combating climate change. Other priorities are “promoting economic growth that benefits workers, the middle class and low incomes, as well as businesses, with special attention to creating opportunities for SMEs.” It is the same message, modulated and transatlantic now, that Biden raised during his electoral campaign and that runs through his two great infrastructure plans, pending a hazardous process in Congress: the determined support for the middle class, “the backbone of America ”, As the president likes to describe it.

In addition to the social drive, and the climate commitment, the TTC also aims to “address unfair trade practices around the world, particularly those posed by non-market economies.” A reference to China, to whose impunity the announcement of the strategic security pact signed by the United States, the United Kingdom and Australia also referred, implicitly but clearly. Either impunity in business – the trade war between Washington and Beijing started in 2018 by then-US President Donald Trump is far from reaching an armistice – or in its expansionist ambitions, as the trilateral defense pact recalls, the The presence of China as a stone guest at major international events is now becoming a custom.

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