US, EU pledge joint action on tech issues, semiconductors, China

Pittsburgh (AFP) –


US and EU officials on Wednesday pledged to join forces to deal with a host of technology and trade issues to secure semiconductor supplies and counter China's dominance.

The inaugural meeting of the Trade and Technology Council (TTC) laid out a lengthy to-do list, but perhaps the most significant achievement was the symbolic restoration of good relations after the damage suffered under the administration of former president Donald Trump.

The high-level meetings were held as industries worldwide grapple with shortages of crucial semiconductors that are harming manufacturing, including of autos, and pushing prices higher.

But the summit also set its sights on forced labor, artificial intelligence, digital privacy and protecting human rights activists online, as well as monitoring foreign investment in key sectors and controlling exports of sensitive products.

"We intend to collaborate to promote shared economic growth that benefits workers on both sides of the Atlantic, (and) grow the transatlantic trade and investment relationship," the officials said in their final communique.

The TTC was born out of President Joe Biden's summit in Brussels in June, when he attempted to repair relations battered by Trump's aggressive actions against trade rivals and allies alike, as well as more recent missteps that have riled Brussels.

The biggest thorn in the relationship are the Trump-era tariffs on steel and aluminum shipped from Europe, which the Biden administration has suspended but not withdrawn.

That dispute loomed over the tech meeting but was not on the agenda, although officials have said recently that they are nearing a permanent solution.

The ministers met at Mill 19, a massive World War II-era munitions factory and later steel mill on the shores of the Monongahela River in Pittsburgh that has been reborn as an advanced robotics facility for researchers from Carnegie Mellon University.

- Semiconductor supply -

The talks were led by US Secretary of State Antony Blinken, Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo, and by EU Executive Vice Presidents Margrethe Vestager and Valdis Dombrovskis.

They did not announce specific actions but mapped out key areas for the 10 working groups to focus on before the next meeting, which likely will be held next spring in Europe, according to a European source.

Seeking to address the global shortage of vital computer chips, the officials pledged to work together "on the rebalancing of global supply chains in semiconductors, with a view to enhancing respective security of supply" and production, including of the most advanced chips.

Demand for electronic devices of all kinds has exploded since the start of the Covid-19 pandemic, as more people work, study and find entertainment at home.

Semiconductor manufacturers at times have had to temporarily close their factories due to Covid-19, leaving them struggling to meet global demand and hamstringing industries including automakers.

"Through the pandemic, shortages of certain semiconductors have highlighted the importance of ensuring stable, resilient and robust supply chains for these vital products," the statement said.

Raimondo has said the chip shortage is both an economic and a national security concern, and called for investments in domestic manufacturing in the EU and United States.

- Containing China -

The lengthy communique does not mention China by name, but the world's second-largest economy is omnipresent throughout, notably in the frequent mentions of concerns posed by "non-market economies."

In addition to semiconductors, the sides are grappling with how to work together to counter what they view as China's unfair trade practices.

The Biden administration so far has continued Trump's strong line towards Beijing, keeping in place punitive duties on Chinese goods, while the EU has taken a less confrontational stance.

The ministers pledged to work jointly and through reforms of the World Trade Organization (WTO).

"We stand together in continuing to protect our businesses, consumers, and workers from unfair trade practices, in particular those posed by non-market economies, that are undermining the world trading system," the statement said.

The officials said the concerns "include -- but are not limited to -- forced technology transfer; state-sponsored theft of intellectual property; market-distorting industrial subsidies ... discriminatory treatment of foreign companies ... and anti-competitive and non-market actions" of state-owned enterprises known as SOEs.

But it also highlights the need to keep tabs on investments in sensitive areas -- something Washington did when it banned Huawei's participation in the US advanced 5G cellular network -- and control sensitive exports that could undermine national security.