May 11, 2022

The Systemic Partnership

The upcoming meeting of the US-EU Trade and Technology Council (TTC) near Paris offers the chance to forge a Euro-Atlantic Operating System for democratic technology governance.

US Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo and Trade Representative Katherine Tai stand near European Commission Executive Vice President Margrethe Vestager and EU Executive Vice President Valdis Dombrovskis as they participate in the U.S and European Union trade and investment talks in Pittsburgh, Pennsylvania, U.S., September 29, 2021.
All rights reserved

Twelve miles outside of Paris lies the suburb of Saclay. Its hilly terrain was created when, in 1670, the French monarch’s engineers used the village as a base of a hydraulics network to connect Louis XIV’s Versailles with running water. That marvel of technological innovation—on par with the majesty of the Sun King’s palace itself—remains part of Saclay’s identity: the fusion of technology with power. Today, the village has become the heart of the Plateau de Saclay, or the Silicon Valley of France, best known for its research into nuclear physics and, increasingly, for its quantum research.

It is there that US Secretary of Commerce Gina Raimondo, US Secretary of State Antony Blinken, and US Trade Representative Katherine Tai will join with European Commission Executive Vice Presidents Margrethe Vestager and Vladis Dombrovskis for the first European meeting of the US-EU Trade and Technology Council (TTC), a follow-up to its September 2021 launch in Pittsburgh. Jolted by Russia’s brutal war against Ukraine, the Americans and Europeans seem to be setting a joint leadership agenda in democratic technology that deepens their strategic interdependence and hardens democratic autonomy. They have already begun to rewrite the global digital rulebook together in ways that favor human rights, rule of law, and open competition.

First, slowly—then all at once—an effort is emerging from Washington and Brussels to put in place the building blocks for a Euro-Atlantic digital order. On March 25, US President Joe Biden and European Commission President Ursula von der Leyen announced in Brussels a breakthrough in a decade-long conflict over US surveillance and the US-EU data bridge that powers the transatlantic digital relationship. Then, on April 28, the two led in the launch of the Declaration for the Future of the Internet—the outgrowth of the Biden administration’s Summit for Democracy—a covenant of sorts signed by more than 60 countries. Its major aim is that the Internet remains rooted in human rights, dignity, pluralism, open access, and economic empowerment for all people. In short, it aspires to take the values of the UN’s Universal Declaration on Human Rights into the digital domain. In a particularly sharp message to Russia and China, Ukraine and Taiwan were both prominently represented at the signing. The TTC meeting in Saclay is set to open a broader glimpse of what that order could look like.

Imposing Costs on Russian Tech

At its 2021 launch, some worried the TTC would devolve into a sort of meandering dialogue in which both sides aired grievances and reached no concrete outcomes—a fate that befell some preceding attempts at a US-EU systemic partnership. Those fears have been largely dispatched. Russia’s war has led to greater convergence between the US and EU on tech governance and a greater understanding of the knock-on effects of sanctions on partners when states seek to automate authoritarianism and continue to wage low-intensity global conflict.

The TTC created the structures that allowed the US and EU to react quickly to restrict dual-use technology exports and intellectual property to Russia. What could have taken six weeks took around 10 days in the end. The US application of the so-called Foreign Direct Product Rule (FDPR) to all of Russia has crippled Russian access to global semiconductor technology, crucial for industries from data centers to aviation to defense. Previously, the FDPR had only been applied to specific companies like Huawei. American and European cooperation on creating carve-outs that would protect European member states from knock-on effects of these sanctions, make its implementation possible. Long term, that muscle memory could come in handy as the two sides look to coordinate more closely on technology access and control vis-à-vis China, the more strategically tricky challenge that the TTC was in fact initially—if implicitly—designed to address.

At the same time, there are indications that the Russian aggression might have longer-term consequences on the transatlantic partnership. There are furtive signs that the two sides might codify the obvious: that trade between the two largest democratic blocs does not threaten American or European security. This is particularly meaningful in the wake of Trump-era use of tariff weapons—so-called 232 tariffs—on steel and aluminum against China but also treaty allies like European states, Canada, and Japan. It could also mean swearing off export restrictions that could kneecap the other side of the Atlantic on energy, critical materials, foundational technologies like chips, and even vaccines. Perhaps the two sides could formalize this commitment with a formal and mutual defense production exemption for treaty allies.

Democratic Autonomy in Technology Supply Chains

The notion that the US and Europe should build democratic supply chains—with stronger backstops based on partners who have a grounding in democracy and rule of law—makes them more secure than the world’s most important autocratic great powers like Russia and China. The regime of Russian President Vladimir Putin has already demonstrated that a certain idea of national identity, prestige, and global standing is more important than economic prosperity for its people, reliability for its partners, and interconnectedness to the world; so important indeed that they are willing to wage a brutal and unprovoked war. There is a strong question as to whether China’s Communist Party might feel the same.

This notion of reliability has been especially acute in semiconductor production and supply. The 40 percent increase in chip demand during the COVID-19 crisis layered on top of geo-political tensions over Taiwan, raw materials shortages, production bottlenecks, and even bad weather to strain global chip supply. In the TTC, the two sides have worked assiduously to identify weaknesses and create ongoing monitoring mechanisms in the feed-ins for the highly complex semiconductor production process. Together they have run a joint supply chain vulnerability mapping, often prying sensitive information from companies on both sides of the Atlantic.

Now the $52 billion US CHIPS Act—together with the €42 billion EU CHIPS Act set for passage in 2023—place industrial policy in cutting-edge technology at the heart of their strategic industrial bases. In order to create deeper technological strategic interdependence, the two sides are tentatively opening up about where and how they will invest so that state-centered industrial policy on both sides of the Atlantic is complimentary and mutually beneficial to their innovation industrial bases. In this regard, the TTC should continue to create greater space for transatlantic consortia to bind the Euro-Atlantic chip ecosystem closer together. In fact, Saclay—the location of the TTC meeting—is set to be a key research building block of an emergent transatlantic chip ecosystem, the capstone of which is a €17 billion Intel chip production facility in Magdeburg, Germany. This will likely create a larger research network with the National Semiconductor Technology Center (NSTC) in Albany, New York.

One of the major challenges to the democratic tech supply chain is where to source critical minerals like rare earths. Much of it still comes from states like Russia, China, and even states at risk from authoritarian aggression. The EU has attempted to use Ukraine as a hedge against its reliance on Chinese critical materials. The EU’s semiconductor industry is reliant on neon gas produced as a byproduct of the steel production process. Europe’s supply has come from the very Mariupol steel plants that were sheltering Ukrainian troops against the Russian onslaught.

Russia’s Disinfo Wars

Work in the Euro-Atlantic tech alliance should not be limited to hardware and exports, though. Against the backdrop of Russia’s war, the US and the EU have had no choice but to build a greater trust in each other on the global rule book. Old taboos are falling away. Areas once seen as off-limits—like data protection, technical standard setting, platform market power or rules to combat the Kremlin’s disinformation machine—are becoming central areas of discussion.

The two sides are converging on AI. This is not only on vague ethical principles but on questions of methodology for assessing AI risk and means to manage it. Both sides are engaged in an intensive process to create risk governance for AI. They are making no pretense that like-minded states have self-interests currently under threat in international standard-setting bodies like the International Standards Organization (ISO) and the International Electrotechnical Commission (IEC). Here, Chinese representatives working on behalf of the CCP flood the zone with working group members to support Chinese developed model technical standards proposals meant to strengthen Chinese competitiveness in the global tech race and some suspect that this could code in cybersecurity vulnerabilities and surveillance loopholes through the adoption of the standards themselves.

In light of a Russia bent on democracy-weakening disinformation, the EU and US can work to tackle state-backed disinformation. The EU—along with the US—should establish rules that avoid situations that could be perceived as a form of online “selective justice” —situations where political pressure arising from events like January 6, 2021 or February 24, 2022 leads to platform action that only shows major social media players still have preponderant power to direct online discourse and an “opacity, capriciousness and inconstancy with which they wield that power.”

The EU’s agreement on landmark platform governance legislation, the Digital Services Act (DSA), inspired American policymakers, even former President Barack Obama and Secretary of State Hillary Clinton. The DSA redefines how illegal content will be treated in the EU with accountability, transparency, and oversight. The DSA compels the major platforms to conduct risk assessment that will be subject to outside accountability from regulators but also academics and civil society. The Biden administration is looking at ways to provide access to data for researchers and academics following the model the EU is pursuing with the Digital Services Act. Such moves could also divulge more detailed information about the connective tissue between platforms based in authoritarian states like Yandex and ByteDance and regime information operations. Data transparency requirements could also help buckle companies like Twitter to the rule of law should a private acquisition subject their governance to the whims of billionaire owners like Elon Musk. Whistleblower Francis Haugen’s Facebook revelations drew cross-party ire and led to new Biden administration measures to restrict targeted advertising to minors, an element reflected in the DSA.

 To do so, the White House could also look at its own model codes of conduct. The Paris-Saclay TTC should inform a voluntary American “Code of Conduct” that the Biden administration could issue as an executive order reflecting the same principles developed by the EU’s code of practice as part of the European Democracy Action Plan. This could ultimately plug into the structure of the DSA, which holds the big platforms accountable by law for their decisions.

The EU, itself, will have to be extremely careful in defining the high criteria which would need to be met to trigger crisis response mechanisms that would justify limiting war propaganda from hostile states with outlets like RT and Sputnik in the future. Such a categorization could be akin to the designation of a country as a “state sponsor of terrorism.” As it currently stands, the Europe-wide de-platforming of Putin’s digital megaphones is largely grounded in political consensus rather than a strong legal basis.

Going South Fast

In many ways, Ukraine has already won the first phase of the war against Russia. It blunted Putin’s efforts to conquer the country, bled Russia’s military, wiped out Russia’s Potemkin defense technology, and decisively won over the hearts and minds of the world’s consolidated democracies amid Russian disinformation. But, paradoxically, Russia’s Ukraine war is only an episode—albeit an important battle—in a larger conflict. One that is increasingly sweeping into the countries of the Global South where the technological connections, online narratives, and fundamental values of the governing elite are less clear.

The Global South has become a central theater in the ideological competition for tech governance. On the disinformation side, trends are worrying. Even as Ukraine pushes facts, images, and stories of daily atrocities inflicted on its people in Bucha, Mariupol, Irpin, and elsewhere, there is an ominous sense that the Euro-Atlantic is losing the information war outside of the OECD. China’s industrial influence operations are amplifying Russian disinformation narratives—particularly in the Global South—around NATO expansion as a form of neo-colonialism and the catalyst for war. China is pushing the notion that sanctions are leading to higher global food prices, even as it has been discreetly complying with the Euro-Atlantic’s sanctions.

Even the like-minded drafters of the Internet Declaration ultimately boiled down to the Five Eyes, the EU, and Japan. Among the 60 signatories, the Global South’s systemically important democratic tech powers—India, South Africa, Brazil, Indonesia, Malaysia, and others—were missing from the roster. Kenya later withdrew its signature. Even some of the US’s closest non-Western allies like Mexico and South Korea were notably absent.

The European Commission is already looking at the TTC model to structure cooperation with India. India has become a much more pivotal tech actor on the international stage—banning Chinese software and hardware on national security grounds, invoking data localization laws, imposing expansive illegal speech legislation, eying its own semiconductor industrial policy, and even throwing its weight when it comes to Internet governance and technical standards diplomacy in the UN and elsewhere. The EU-India technology relationship—like the US relationship with India in the Quad and the Indo-Pacific Economic Framework (IPEF) —could be important in efforts to create connective tissue on tech governance with the democratic Global South.

At the same time, both the Biden administration’s ICT development initiatives and the EU’s Global Gateway are unleashing hundreds of billions in new development assistance to build connectivity infrastructure in middle- and low-income countries. These efforts are taking a harder geopolitical edge as Chinese state-owned and state-adjacent companies like Huawei, Hikvision, iFlyTec, SenseTime, and NucTech show interest in the connectivity infrastructure of the Balkans, Eastern Europe, Africa, and elsewhere. The TTC aims to establish trusted vendor principles on development financing of ICT infrastructure. Such principles, building along the lines of the Blue Dot Network and the EU’s Cyber Toolbox for 5G, would look to preserve the connectivity sovereignty and freedom to choose of third countries and their citizens while excluding products and software could serve as cyber-security wormholes for espionage, data capture, and blackouts.

What’s Next

As the TTC enters its next phase—a third meeting is tentatively scheduled for December in the United States—it can broaden its agenda from the acute challenge of Russia’s war to more directly confront the chronic challenges posed by China and climate change.

First, the US and EU must focus on deeper technological convergence, specifically on 5G, AI, and climate-neutral tech but also anticipating frontier areas industrial data governance, 6G, and Quantum Computing. On data governance, the timing is right to act before the issue becomes politically charged between the two great democratic tech blocs. Already, some in Europe are attempting to redefine industrial data as a “strategic asset”—borrowing on some of the data governance principles of the Chinese. Industrial data could become a new frontline in European debates around digital sovereignty. The two sides could begin to develop democratic data spaces for industrial data, perhaps expanding the Franco-German GAIA-X framework to include non-European powers—specifically, the US, but also Japan, South Korea, Canada, and the United Kingdom.

Second, the US and EU should use the TTC, G7, and other bodies to operationalize the notion of connectivity as a global human right. Together they could establish a Democratic Connectivity Agenda that funds encrypted digital communication tools like trustworthy virtual private networks (VPNs) that can avoid detection and provide links to the outside world for those being enclosed in increasingly autarkic Internet spaces. They should also direct development funding from Global Gateway, Build Back Better World, and similar initiatives to fund a range of satellite capabilities—including SpaceX’s Starlink but also the UK’s OneWeb, the EU’s nascent Secure Connectivity Initiative, and others—that can be rapidly deployed to bridge connectivity between citizens behind digital Iron curtains and the global Internet. This will become part of a global doctrine to allow open information to be provided in conflict zones and authoritarian-driven Internet shutdowns—following the Cold War logic that drove Radio Free Europe/Radio Liberty (RFE/RL).

Third, the TTC should broaden and codify its work on dual-use export controls by creating a Coordinating Committee for Democratic Autonomy, a 21st-century version of the Coordinating Committee for Multilateral Export Controls (CoCom). The new body—with an EU-NATO fusion center for information sharing and consultation—could systematize restricted access to strategic technology by authoritarian states like Russia and China. This should include criteria and information-sharing dashboards on dual-use export and import controls of critical technology, investment screening, trustworthy vendors, and research protection. On the import side, particular attention should be paid to Chinese AI-powered surveillance equipment used in smart cities, digital services, and digital services and hardware. It could also work to level export, investment, and IP restrictions to cyber hired guns like Israel’s NSO—the maker of the notorious Pegasus spyware—and Germany’s now-defunct FinFisher, who peddle human-rights destroying surveillance technology to authoritarian regimes.

Fourth, the TTC—together with the G7—should push for the US, Germany, France, Canada, and others like-minded states to establish a Global Critical Minerals Reserve in lithium, nickel cobalt, manganese ore, and rare earth elements—key for digital and green technologies, especially in EV batteries. That effort would be similar to the IAE’s Strategic Petroleum Reserve, a facility that released 120 million barrels of oil in the first six months following the outset of Russia’s war in Europe. Such an action on critical minerals must be countercyclical—this moment of acute shortage is not the right moment to look at stockpiling. But the TTC could start to build mechanisms for such a joint facility.

Finally, clean tech must play a greater role in the TTC’s future. The twin crises of climate change and Russia’s war on Ukraine have made clear that an accelerated shift to renewable energy as a more critical Euro-Atlantic tech security priority.

Even as the Euro-Atlantic tech relationship flourishes against the dark backdrop of war, differences remain between the US and EU on democratic tech governance remain. The lack of US data protection remains a potential stumbling block in the new Transatlantic Data Protection Framework’s ability to withstand Schrems III. Washington’s agencies remain at odds on how to tackle the preponderant power of American tech giants. Some like the FTC, the Justice Department, and the USTR are sympathetic to the Brussels approach while the Commerce and State Departments align more closely with US Big Tech.

But Russia’s war on Ukraine has focused the Euro-Atlantic mind about how much the international system—including the global tech order—has allowed rot to creep in that are now threatening digital rights, cyber security, and technological resilience. Russia burst the illusion that the petty differences can define the Euro-Atlantic tech relationship. If it works, the TTC could serve as a hidden G2 for rules-based, democratic tech governance.

Tyson Barker is head of the Technology and Global Affairs Program at the German Council on Foreign Relations (DGAP).

Read more by the author