Recent US-EU TTC Meeting Didn't Appear to Advance Export Control Talks, Experts Say

The U.S. and the EU didn’t appear to make much progress on export controls, investment screening and other pivotal areas of cooperation at the latest Trade and Technology Council meeting this month, experts with the ​​Center for Strategic and International Studies said during a Dec. 12 event. The two sides still look to be closely aligned on Russia controls and sanctions, the speakers said, but until the TTC announces more concrete measures, it remains unclear how similarly they view restrictions on China.

The U.S. and EU announced what they said were new export control initiatives after the last meeting, including a pilot program to better exchange information on dual-use export controls and a new effort to increase research collaboration on quantum technologies (see 2212050056). But much of the wording that came out of the discussions appeared similar to the meeting from May, when the two sides agreed to increase information sharing on export licensing (see 2205160033).

It was important that senior officials from both the EU and U.S. have continued to attend the meetings, said Bill Reinsch, the Scholl Chair in International Business at CSIS. But “otherwise, I think it was an exercise in kicking the can,” said Reinsch, who was a senior export administration official during the Clinton administration. “They, I think, in a sense, rested on their laurels on export controls.”

Reinsch said the U.S. and EU’s export control cooperation against Russia was “the biggest accomplishment” of the year, saying it was ”extraordinary” that nearly 40 countries agreed to impose trade restrictions against Moscow. “It was an extraordinary accomplishment and one that the Biden administration deserves a lot of credit for,” Reinsch said. But “they didn't advance that ball very much, if at all, in the meeting last week.”

Max Bergmann, director of the CSIS Europe Program, said agreeing to new measures is “hard,” adding both sides are “highly complex federal unions” and it’s difficult for the EU to reach a consensus among its member states. But he also said there was “a lot of agreement to continue talking.”

While that may not result in any new, immediate measures, “it does create the framework where, as we're assessing and going through new issues -- such as around supply chains, semiconductors, and new things come up when it comes to Russia sanctions or export controls -- that there's now this framework for discussion,” Bergmann said.

He said the TTC is “at halftime,” adding a “lot of pressure” is on the Biden administration for “this to really be a success.” Reinsch said he expects more tangible results from the TTC’s next meeting in Switzerland in six months. “There, I think, it'll be time to stop kicking the can and actually demonstrate some progress on a number of these areas where they said they're going to agree,” he said.

Reinsch also said he’s hopeful that the EU will eventually adopt similar restrictions against China. The bloc has learned from Russia that “dependence on people who are willing to politicize trade actually can lead to bad consequences down the road, and the smart move is to insulate yourself from that preemptively.”

The EU’s “wake-up call” has been China’s actions against Lithuania, Reinsch said. The EU recently requested a World Trade Organization dispute settlement panel over Chinese trade restrictions on Lithuanian exports (see 2212070028), which began after Lithuania showed support for Taiwan (see 2208160034).

China “weaponizes trade. And if you're not pursuing the right political line, they retaliate economically,” Reinsch said. “I think [the EU is] moving in the same direction that we are, and it's only a matter of time before they catch up.”

Bergmann said the two sides are “far more aligned in how we view China than we disagree.” But it may take time for the EU to join the U.S., he said, partly because of the fallout from trade restrictions against Russia.

“I think that part of the European hesitance to sort of decouple, which also exists in the United States, is because right now they're doing that with Russia, and that's having tremendous economic costs to their economy,” Bergmann said. “So my sense is that we’re sort of at different speeds when it comes to China.”