The election of Joe Biden as the next US President brings to an end a particularly difficult period in EU-US relations. Both sides should now get ready to step up cooperation in a range of fields, something that has been argued for by the Commission and the High Representative of the Union for Foreign Affairs and Security Policy in their joint communication ‘A new EU-US agenda for global change’.
Yet we should not forget that we have been here before. Barack Obama’s election saw a similar burst of optimism and a very ambitious attempt at a comprehensive EU-US agreement on trade, investment and regulatory co-operation (TTIP – the Transatlantic Trade and Investment Partnership). Agreement however, proved elusive.
This time, we need a more focused agenda and more realistic and deliverable goals. As the EU is strongly committed to implementing the twin - green and digital - transformations, it would make sense to propose cooperation in these areas. Climate policy and digitalisation are expected to be important themes for the new US administration also, and President-elect Biden has made it clear that he wants to cooperate closely with allies in these areas.
“While the EU and the US need to enjoy their coming honeymoon period, we should be well aware of the challenges that we face”
For the EU, there are high hopes for the climate agenda, but the risk is that the US may not be able to that he will take the US back to the Paris Agreement and he has a very ambitious climate plan, not dissimilar to the European Green Deal. However, he may not get the public funding needed for his climate policies unless the Democrats achieve a surprise victory in the Georgia senate race on 5 January, thus winning a majority in the upper chamber of Congress.
Without sufficient public funds, transatlantic cooperation on the Paris Accord would need to be downsized. Biden as much as anyone, has the ability to reach out to Republican senators to get enough of them on board for a private sector-focused green agenda. Cooperation with the EU could take place, for example, on green finance initiatives, on R&D and on green technology standards. This would certainly be a step forward. Also, many states - even some Republican-led ones - have had much more ambitious climate policies than Trump had at federal level.
On the digital agenda, which features prominently in the joint communication, there is a major risk that neither the EU nor the US will be able deliver what the other side expects. Yet we must try. The global digital economy badly needs the joint leadership of the world’s leading economies and democracies.
Otherwise, we risk international fragmentation and increased dominance of undemocratic digital rules without privacy protection. The EU would need the US to agree to better tax and regulate digital companies, including the tech giants. While many Democrats support this agenda, and the Department of Justice among others is looking to strengthen digital competition in US markets, it is unclear how strongly Biden will want to take on Big Tech.
In reality, with the senate in Republican hands, he probably couldn’t. To demonstrate our willingness to cooperate to the new administration, the EU should make clear that the DSA, DMA or DGA are not about closing doors but rather at creating a more level playing field on markets.
For digital taxes, the new administration has until mid-2021 or so; time to show its intent, when there is a new deadline for a deal in the OECD tax talks. In the digital sphere, where the EU is playing catch-up with the US and China, we need to be attentive to what really brings us to the same table.
“Climate policy and digitalisation are expected to be important themes for the new US administration as well, and President-elect Biden has made it clear that he wants to cooperate closely with allies”
If not, the US will instead concentrate on joining forces with its other democratic partners; the EU risks remaining a smaller and more solitary player, and - in the worst case - becoming isolated in the global digital economy. Biden has made clear he wants democracies to write the rules of the global digital economy and thus prevent China from doing so.
Therefore, as the EU prepares to join forces with the US on digital issues such as those related to trade and the rules and standards of new technologies such as AI, we need to be clear that this cooperation will strengthen our voice in international organisations.
While the EU and the US need to enjoy their coming honeymoon period, we should be well aware of the challenges that we face. Neither the US nor the EU may be able to deliver what the other side expects. While we should learn from past mistakes and prepare for new disappointments, we should remain optimistic and constantly seek new opportunities for cooperation. Because, when the EU and the US do agree, together we can truly protect democracies and freedoms and effect global change.