The European Union’s executive branch has set out a bold wish-list for warmer relations with Joe Biden’s incoming administration, including resolving key trade disputes and cooperating on new tax and competition regulations for Big Tech.
The long-running dispute between plane makers
is explicitly cited in the European Commission’s proposal to European governments, which also has broad ramifications for energy and tech companies.
The back story. The relationship between the EU and the U.S. has been strained over the last four years during President Donald Trump’s administration, which pushed a view of American priorities over multilateral commitments and cooperation.
Trump withdrew the U.S. from the Paris climate accord and the Iran nuclear deal, both of which are important elements of EU foreign policy, and he has previously criticized NATO, the trans-Atlantic military alliance crucial to the defense of many EU countries.
Under Trump, the U.S. has imposed tariffs on EU goods as part of a two-way trade war centering on state aid from the U.S. to Boeing and the EU to Airbus. Both companies, rivals, are jewels in the manufacturing crowns of the U.S. and EU respectively.
Plus:America’s Trade Chief Has a Bold New Plan. U.S. Companies, Beware.
What’s new. On Wednesday, the European Commission proposed a new trans-Atlantic agenda to European governments, after years of what it said were “geopolitical power shifts, bilateral tensions and unilateral tendencies.”
Along with highlighting common mandates of democracy and human rights, the proposal directly targets cooperation with the U.S. on climate change, market regulation, and a health and economic recovery from the Covid-19 pandemic. This includes proposing a joint commitment to net-zero carbon emissions by 2050, reforming the regulatory and tax regimes for technology giants, and reforming the World Trade Organization.
In tandem with trade reform, the Commission wants to end “bilateral trade irritants” with the U.S., namely the dispute between Boeing and Airbus, as well as lifting tariffs.
“When the trans-Atlantic partnership is strong, the EU and the U.S. are both stronger,” said European Commission President Ursula von der Leyen. “It is time to reconnect with a new agenda for trans-Atlantic and global cooperation for the world of today.”
Also read:Airbus Vs Boeing: Legal Battle Of The Titans
Looking ahead. The EU’s early opening gambit to Biden underscores the deep desires of the bloc to restore more normal trade relations with the U.S. post-Trump. It should be welcomed on both sides of the Atlantic, where the trade war and harsh tariffs stemming from the Boeing-Airbus dispute leave little to gain for either party. Subsidies for Boeing may quietly end.
The EU’s proposal is broad in scope and light on details. Reading between the lines, a stronger shared stance on climate change is likely to trickle down to the European and U.S. oil supermajors. For tech companies, any extensive cooperation on the regulation and taxation of Big Tech will rattle Silicon Valley, which faces new regulatory proposals from the EU next week, and a continuing U.S. antitrust case against Google.