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Trade, tech and China: what's on the agenda for the EU-US summit?

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By Euronews
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Joe Biden visited Brussels in 2015 while serving as Vice-President under Barack Obama.
Joe Biden visited Brussels in 2015 while serving as Vice-President under Barack Obama.   -   Copyright  Virginia Mayo/AP
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The coronavirus pandemic, China, trade tariffs, tech regulation, climate change and democracy are set to top the agenda of the first EU-US summit under American President Joe Biden.

European Commission President Ursula von der Leyen and European Council President Charles Michel will welcome Biden on Tuesday to discuss a variety of outstanding issues between the two Atlantic partners, some of which have strained the relation in the recent years.

The high-level meeting comes just a few days after the G7, where Biden, von der Leyen and Michel met in person for the first time, and the NATO summit on Monday. The American president is determined to use his first foreign trip to form an alliance of like-minded partners to confront the rising power of China.

Biden's intentions already bore fruit in Cornwall, where leaders adopted an infrastructure plan to rival Beijing's Belt and Road Initiative, a massive investment project that has served to extend and reinforce China's geopolitical influence around the world.

Tuesday's summit is meant to usher in a new era of EU-US cooperation, which reached an all-time low during the Administration of Donald J. Trump.

The combative and unpredictable tone of the former real estate tycoon baffled, frustrated and often offended European leaders. The diplomatic deterioration gave rise to the concept of "strategic autonomy", a still-abstract theory that calls for Europe to be more independent and self-reliant.

Although the concept is expected to stick around for the time being, Europeans are willing to set aside the narrative and make the most of the transatlantic alliance while Biden occupies the White House.

"I, for one, think that the European Union is an incredibly strong and vibrant entity," Biden told French President Emmanuel Macron during the G7 summit.

Trade disputes

One of the main issues on the EU-US agenda derives from the turbulent Trump years.

It was under Trump's direction that the United States slapped tariffs on imports of steel and aluminium coming from the EU. The so-called 'Trump tariffs' were set at 25% on steel and 10% on aluminium, which, according to the European Commission, represented €6.4 billion worth of trade.

As a countermove, Brussels imposed extra duties on a list of US imports, such as steel, peanut butter, whiskey, motorcycles and jeans, worth €2.8 billion. This month, the EU was supposed to add €3.6 billion in retaliatory charges to fully offset the damage, but the hike was delayed in May to give dialogue a chance to succeed.

Leaders will also discuss the tariffs related to long-standing dispute between Airbus and Boeing.

For years, the US and the EU have accused each other of illegally subsidising their respective airspace giants. Following a 2018 ruling by the Appellate Body of the World Trade Organization (WTO), the US targeted European exports worth up to $7.5 billion. The WTO later authorised the EU to take countermeasures on $4 billion of US exports. The tariffs were temporarily suspended in March.

Biden, von der Leyen and Michel are expected to advance talks to resolve both controversies. EU Commission Vice-President Dombrovskis, in charge of trade relations, is scheduled to meet tomorrow with his counterpart, US Trade Representative Katherine Tai, and will hold a joint press conference, hinting that an important announcement might be on its way.

"We have three ongoing disputes, which we really need to try and put to bed," David O'Sullivan, who served as EU ambassador to the US from 2014 to 2019, told Euronews.

"The first one is, of course, Airbus-Boeing, which has been litigated in the WTO for the last 17 years. I think it is time now to negotiate a settlement. It's complicated. It's difficult, but the time is short. We need to try and find a solution in the next weeks.

"We have the steel and aluminium tariffs, which we think were very unfairly imposed on European exporters by the Trump administration using the pretext of national security. We really want to see those eliminated, but we have to figure out what is needed from the American side to feel that they can comfortably roll back on that decision."

For O'Sullivan, the third dispute centres on the EU-US Privacy Shield, a mechanism that allowed free transfers of data on both sides of the Atlantic. The system was deemed invalid last year by the EU's Court of Justice, which argued the level of data protection in America was not equivalent to the bloc's General Data Protection Regulation (GDPR). Talks have been ongoing ever since to replace the privacy shield with a new arrangement.

A new tech council

Closely linked to the trade discussions will be a high-stakes conversation on technology and digital governance.

EU Commission Vice-President Margrethe Vestager, who oversees the bloc's digital strategy and competition policy, is also scheduled to welcome Biden on Tuesday. Vestager's presence demonstrates how important the digital issue has become in the transatlantic relations.

Both sides plan to establish a new EU-US Trade and Technology Council (TTC) to design standards for emerging technology, address the responsibility of online platforms, strengthen and diversify supply chains, promote join investments and rein in the growing power of Big Tech.

The EU is increasingly wary of Silicon Valley tech giants, some of which have become larger than most member states. As a result, Brussels has put forward a range of legislative proposals to make sure technology complies with EU principles and manufacturers are held accountable for its dangerous side effects. The preoccupation has also spread across the United States, a country that is traditionally reticent to any kind of business regulation.

The TTC proposal was first introduced by the Commission shortly after Biden won the 2020 presidential elections. Its ultimate goal will be to ensure that existing and future technologies follow Western democratic values instead of rules determined by China.

Taxation matters are set to emerge in both trade and digital discussions. Finance ministers from the G7 recently reached a landmark agreement to introduce a global minimum tax rate of 15 per cent for corporations and reallocate taxing rights to better reflect the reality of the digital economy.

Brussels will soon unveil its EU-wide tax on digital companies with the aim of making it operational by 2023. The executive has said the levy will be modest and non-discriminatory and will work in parallel to the G7 deal once it has been negotiated at G20 and OECD level.

The Commission hopes that the Trade and Technology Council will help solve divergences and clashes that might arise from proposals like the upcoming digital tax.

Vaccines, Brexit and human rights

The EU-US summit will also touch upon matters such as action to fight climate change and the global response to the coronavirus pandemic. Last week, the G7 committed to donate 1 billion doses of vaccine doses to middle- and low-income nations.

The United States is favouring the lifting of intellectual property rights to boost the production of COVID-19 vaccines. However, the idea has received mixed reviews across the continent: the European Parliament and President Macron have come forward to support it, while Germany has explicitly opposed it. Meanwhile, the European Commission is betting on an alternative path to help developing countries increase their manufacturing capacity by sharing know-how and fostering industrial partnerships.

Europeans resent the awkward position that Americans have put them in by suddenly endorsing patent waivers and continue to insist that the EU is the "pharmacy of the world", having exported more than 350 million doses produced inside its territory since December.

Leaders will also touch upon tensions surrounding the North Ireland Protocol, which the United Kingdom has threatened to violate if Brussels doesn't satisfy London's demands for flexibility in the post-Brexit flow of goods. Biden has repeatedly warned the government of Boris Johnson to protect the Good Friday Agreement and preserve peace on both sides of the Irish border.

Democracy and human rights will too featured prominently on the EU-US agenda. As part of his strategy to curb China's dominance, Biden is keen to work together with allies to show that "democracies can still deliver" and are better prepared than autocratic regimes to handle challenges like the fourth industrial revolution and the COVID-19 pandemic.

The abundance of substantive issues that Biden is willing to put on the table is a "hugely positive" change from the previous American administration, O'Sullivan says.

"It's not just a change of tone and style, it's a change of substance, the re-engagement of the military, the multilateral level, the commitment to climate change, the commitment to trying to revive the Iran deal, the commitment to multilateralism more generally," he says.

"There are real differences of opinion and conflicting interests between the United States and the European Union. We don't always see perfectly eye to eye. The challenge is to manage those in a constructive and positive way and not let it turn into a negative agenda. "