Emerging Technology and a Reimagined U.S.-EU Partnership

Erica D. Borghard is a senior fellow with the New American Engagement Center at the Scowcroft Center for Strategy and Security at the Atlantic Council.

This week, the Financial Times reported that the European Commission and the European Union’s (EU) high representative for foreign policy will issue a paper proposing a reimagined partnership between the EU and the United States to address a range of shared challenges, especially those posed by China. This proposal echoes similar discussions about the merits of a partnership of “techno-democracies,” as well as efforts spearheaded by the United Kingdom to build a D-10 alliance of democracies. This EU initiative reportedly spans a wide range of topics, such as technology, trade, and COVID-19 policy. There are significant gaps to be bridged on a number of fronts, especially data privacy [PDF] laws and regulation of private sector technology companies. Nonetheless, this is welcome news—with some caveats.

This proposal contains a number of positive elements. First, a European-driven effort to revive the transatlantic partnership is a seemingly unintended consequence of the Trump administration’s trade wars, which included the imposition of tariffs against EU members, and its “America first” approach to diplomacy. Fear among some in Washington that the Trump administration’s actions would indelibly damage American ties with European allies appear to have been misplaced. However, a critical task facing the incoming Biden administration will be to discern how to work with European partners to reimagine the transatlantic relationship in light of changes in the strategic context, such as uncertainty about the role of America in the world after the Trump administration and changes in how Europe perceives the challenge posed by China.

Second, the EU initiative appropriately frames the crux of great power competition in economic rather than military terms, with emerging technology playing an essential role. Efforts by China and Russia to craft alternative international institutions, exert leadership in existing ones, or form new agreements without the United States, have primarily taken place in the economic and technology realms. Even a cursory examination illuminates this trend—the recent signing of the Regional Comprehensive Economic Partnership (RCEP) between Association of Southeast Asian Nations (ASEAN) members and China, Japan, South Korea, Australia, and New Zealand; China and Russia's efforts to create alternatives to the SWIFT financial messaging system; or China’s efforts to promote new international telecommunications standards for 5G. It’s fitting, therefore, that the EU has proposed this new partnership. Typically, the North Atlantic Treaty Organization (NATO) is seen as the bedrock of the transatlantic alliance, and members states certainly confront shared threats in the area of emerging technology. But, as a military alliance, NATO is not well-suited to address these types of challenges. This hopefully reflects a shared transatlantic understanding that economic statecraft will be prominently featured in grand strategies for great power competition.

That said, there are also areas for concern. This proposal appears to comprise a diverse set of issues that will be difficult to resolve under one umbrella. Even for technology, the EU paper proposes a number of initiatives, including digital regulation, anti-trust, limiting foreign investment, and addressing cyber threats. This creates the risk that, in aiming to get everything done, nothing will get done, especially when there could be competing priorities and interests across issues. The reality is that not every emerging technology issue should be tackled by a U.S.-EU partnership. For instance, it would be wise for the United States to distinguish between primarily national security and intelligence issues, such as cyber threats, which would be better addressed through existing military (NATO) and intelligence (Five Eyes) alliances, versus economic ones (such as antitrust regulation).

Of greater concern is that this proposal’s overarching framework is based on a partnership of like-minded democracies. This risks muddying the waters between economic and political issues. While there are certainly liberal democratic values that lie at the heart of many of the technology policy positions of the United States and Europe, such as privacy and speech protections, leveraging democracy as the partnership’s fundamental organizing principal risks alienating potential partners with overlapping economic interests. In turn, this feeds China’s ability to frame the global narrative as a contest between autocratic and democratic systems, enabling Beijing to pull away potential collaborators to a U.S.-EU partnership, such as Hungary. Moreover, framing the entire partnership in terms of a confrontation with China risks vitiating the opportunity for collaboration with China in areas of shared interest—even if they could be narrow.

Finally, there are two critical topics pertinent to emerging technology that appear to be absent from this proposed U.S.-EU partnership but should be urgently prioritized. One is how governments can promote the competitiveness and global market share of Western firms and continue to shape international standards for emerging technologies. This will not only require paying careful attention to technical standards development by international bodies but, more importantly, cultivating partnerships between governments and private firms and increasing investment in research and development in critical technology areas. Another issue is resilience. Great power competition will likely involve disruptive events, whether due to cyberattacks, economic recessions, or pandemics. The private sector, as well as regulatory bodies in both the United States and Europe, have made notable efforts to develop cybersecurity resilience frameworks to anticipate, withstand, and rapidly recover in the wake of disruptive cyber events. However, these efforts have largely focused on the financial services sector and have not been coordinated at the governmental level by the United States and EU. A broader and common effort to harmonize resilience frameworks, especially given the interdependence of the transatlantic economies, should be an integral element of a revitalized transatlantic economic partnership.

Despite the flaws in this latest announcement, the EU’s recognition of the economic dimensions of great power competition is a positive development, and the United States should respond to this call to action and work with transatlantic partners to develop a shared strategy to confront their contemporary challenges.