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

·4-min read
US Trade Representative Katherine Tai, left, Commerce Secretary Gina Raimondo, second from left and Secretary of State Antony Blinken, third from left, meet with European Union commissioner Valdis Dombrovskis, right, in Pittsburgh on September 29, 2021 (AFP/Nicholas Kamm)

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.

"It's just a remarkable spirit of cooperation and collaboration, and a desire between the United States and European Union to work very, very closely together," US Secretary of State Antony Blinken told reporters.

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.

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.

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the Trump-era tariffs on steel and aluminum shipped from Europe, which the Biden administration has suspended but not withdrawn.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 a massive World War II-era munitions factory and later steel mill in Pittsburgh that has been converted into an advanced robotics research facility.

- Semiconductor supply -

The talks were led on the US side by Blinken, Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo, and on the European side by EU Executive Vice Presidents Margrethe Vestager and Valdis Dombrovskis.

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

"We represent those largest economies, collectively," Blinken said after the meeting. "When we're working together, we have a unique ability to help shape norms, the standards and rules that govern the way technology is used."

Seeking to address the global shortage of vital computer chips, the officials pledged in their final communique 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.

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

But it also highlighted 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.

Dt-hs/bfm

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