Tag: Innovation

LONDON — Britain was rebuffed by the Biden administration after multiple requests to develop an advanced trade and technology dialogue similar to structures the U.S. set up with the European Union.

On visits to Washington as a Cabinet minister over the past two years, Liz Truss urged U.S. Commerce Secretary Gina Raimondo and senior Biden administration officials to intensify talks with the U.K. to build clean technology supply chains and boost collaboration on artificial intelligence (AI) and semiconductors.

After Truss became prime minister in fall 2022, the idea was floated again when Raimondo visited London last October, people familiar with the conversations told POLITICO. But fear of angering the U.S.’s European partners and the U.K.’s diminished status outside the EU post-Brexit have posed barriers to influencing Washington.

Businesses, lawmakers and experts worry the U.K. is being left on the sidelines. 

“We tried many times,” said a former senior Downing Street official, of the British government’s efforts to set up a U.K. equivalent to the U.S.-E.U. Trade and Technology Council (TTC), noting Truss’ overtures began as trade chief in July 2021. They requested anonymity to speak on sensitive issues.

“We did speak to Gina Raimondo about that, saying ‘we think it would be a good opportunity,’” said the former official — not necessarily to join the EU-U.S. talks directly, “but to increase trilateral cooperation.”

Set up in June 2021, the TTC forum co-chaired by Raimondo, Secretary of State Antony Blinken and U.S. trade chief Katherine Tai gives their EU counterparts, Margrethe Vestager and Valdis Dombrovskis, a direct line to shape tech and trade policy.

The U.S. is pushing forward with export controls on advanced semiconductors to China; forging new secure tech supply chains away from Beijing; and spurring innovation through subsidies for cutting-edge green technology and microprocessors.

The TTC’s 10 working groups with the EU, Raimondo said in an interview late last year, “set the standards,” though Brussels has rebuffed Washington’s efforts to use the transatlantic body to go directly after Beijing.

But the U.K. “is missing the boat on not being completely engaged in that dialogue,” said a U.S.-based representative of a major business group. “There has been some discussion about the U.K. perhaps joining the TTC,” they confirmed, and “it was kind of mooted, at least in private” with Raimondo by the Truss administration on her visit to London last October.

The response from the U.S. had been ‘’let’s work with what we’ve got at the moment,’” said the former Downing Street official.

Even if the U.S. does want to talk, “they don’t want to irritate the Europeans,” the same former official added. Right now the U.K.’s conversations with the U.S. on these issues are “ad hoc” under the new Atlantic Charter Boris Johnson and Joe Biden signed around the G7 summit in 2021, they said, and “nothing institutional.”

Securing British access to the U.S.-EU tech forum or an equivalent was also discussed when CBI chief Tony Danker was in Washington last July, said people familiar with conversations during his visit. 

The U.K.’s science and tech secretary, Michelle Donelan, confirmed the British government had discussed establishing a more regular channel for tech and trade discussions with the U.S., both last October and more recently. “My officials have just been out [to the U.S.],” she told POLITICO. “They’ve had very productive conversations.”

A U.K. government spokesperson said: “The U.K. remains committed to working closely with the U.S. and EU to further our shared trade and technology objectives, through the EU-UK Trade and Cooperation Agreement, the U.S.-U.K. Future of Atlantic Trade dialogues, and the U.K.-U.S. technology partnership.

“We will continue to advance U.K. interests in trade and technology and explore further areas of cooperation with partners where it is mutually beneficial.”

Britain the rule-taker?

Last October, Washington and London held the first meeting of the data and tech forum Johnson and Biden set up. Senior officials hoped to get a deal securing the free flow of data between the U.S. and U.K. across the line and addressed similar issues as the TTC.

They couldn’t secure the data deal. The U.K. is expected to join a U.S.-led effort to expand data transfer rules baked into the Asia-Pacific Economic Cooperation trading agreement as soon as this year, according to a former and a current British official, who spoke on the condition of anonymity to discuss internal deliberations. The next formal meeting between the U.K. and U.S. is penciled in for January 2024.

Ongoing dialogue “is vital to secure an overarching agreement on U.K.-U.S. data flows, without which modern day business cannot function,” said William Bain, head of trade policy at the British Chambers of Commerce (BCC). “It would also provide an opportunity to set the ground rules around a host of other technological developments.”

In contrast, the U.S. and EU are always at work, with TTC officials in constant contact with the operation — though questions have been raised about how long-term the transatlantic cooperation is likely to prove, ahead of next year’s U.S. presidential election.

“Unless you have a structured system or setup, often overseen by ministers, you don’t really get the drive to actually get things done,” said the former Downing Street official.

Right now cooperation with the U.S. on tech issues is not as intense or structured as desired, the same former official said, and is “not really brought together” in one central forum.

“This initiative [the TTC] between the world’s two regulatory powerhouses risks sidelining the U.K.,” warned lawmakers on the UK parliament’s foreign affairs committee in a report last October. Britain may become “a rule-taker rather than a rule-maker,” MPs noted, citing the government’s “ambiguous” position on technology standards. Britain has yet to publish a formal semiconductor strategy, and others on critical minerals — like those used in EV batteries — or AI are also missing.

Over the last two years, U.S. trade chief Tai has “spoken regularly to her three successive U.K. counterparts to identify and tackle shared economic and trade priorities,” said a spokesperson for the U.S. Trade Representative, adding “we intend to continue strengthening this partnership in the years to come.” 

All eyes on Europe

For its part, the EU has to date shown little interest in closer cooperation with the U.K.

Three European Commission officials disregarded the likelihood of Britain joining the club, though one of those officials said that London may be asked to join — alongside other like-minded countries — for specific discussions related to ongoing export bans against Russia.

Even with last week’s breakthrough over the Northern Ireland protocol calming friction between London and Brussels, the U.K. was not a priority country for involvement in the TTC, added another of the EU officials.

“The U.K. was extremely keen to be part of a dialogue of some sort of equivalent of TTC,” said a senior business representative in London, who requested anonymity to speak about sensitive issues.

U.K. firms see “the Holy Grail” as Britain, the U.S. and EU working together on this, they said. “We’re very keen to see a triangular dialogue at some point.”

The U.K.’s haggling with the EU over the details of the Northern Ireland protocol governing trade in the region has posed “a political obstacle” to realizing that vision, they suggested.

Yet with a solution to the dispute announced in late February, the same business figure said, “there will be a more prominent push to work together with the U.K.”

TTC+

Some trade experts think the U.K. would increase its chances of accession to the TTC if it submitted a joint request with other nations.

But prior to that happening, “I think the EU-U.S. TTC will need to first deliver bilaterally,” said Sabina Ciofu, an international tech policy expert at the trade body techUK. 

When there is momentum, Ciofu said, the U.K. should join forces with Japan, South Korea and other advanced economies to ask for a TTC+ that could include the G7 or other partners. At the last TTC meeting in December, U.S. and EU officials said they were open to such an expansion around specific topics that had global significance.

But not all trade experts think this is essential. Andy Burwell, director of international trade at the CBI, said he doesn’t “think it necessarily matters” whether the U.K. has a structured conversation with the U.S. like the TTC forum.

Off the back of a soon-to-be-published refresh of the Integrated Review — the U.K.’s national security and foreign policy strategy — Prime Minister Rishi Sunak should instead seize the opportunity, Burwell said, to pinpoint where Britain is “going to own, collaborate and have access to various aspects of the supply chains.”

The G7, Burwell said, “could be the right platform for having some of those conversations.”

Yet the “danger with the ad hoc approach with lots of different people is incoherence,” said the former Downing Street official quoted above.

Too many countries involved in setting the standards can, the former official said, “create difficulty in leveraging what you want — which is all of the countries agreeing together on a certain way forward … especially when you’re dealing with issues that relate to, for example, China.”

Mark Scott, Annabelle Dickson and Tom Bristow contributed reporting.