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Where Europe and the US don’t see eye to eye – POLITICO

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With eight days of glad-handing, photograph ops and fanfare, Joe Biden and his crew are hoping his journey to Europe will reboot transatlantic relations.

That gained’t be straightforward.

Though Biden’s election might need swung Washington’s needle nearer to the EU playbook, the U.S. and Europe stay cut up on many coverage points key in Brussels and EU capitals. The 2 sides are at odds on every thing from lingering Trump-era commerce tariffs to taxing America’s tech giants to making farming extra environmentally sustainable. 

Right here’s POLITICO’s rundown of the coverage disputes that would show problematic.

1. The tariff commerce conflict

The brand new president has left a lot of Donald Trump’s commerce coverage untouched, together with tariffs on metal and a blockade of the World Commerce Group’s court docket system. 

Biden’s drive for a “Purchase American” coverage, favoring U.S. firms in main public tenders, is considered one of the causes Brussels is getting ready a brand new authorized device to guarantee reciprocity in large public contracts. After dithering for nearly a decade, the EU is lastly shifting on plans to bolster the EU’s industrial champions that may very well be dangerous for U.S. firms.

Brussels and Washington have agreed to name short-term tariff truces on each metal and aluminum duties and Airbus-Boeing tariffs. However resolving these long-standing commerce disputes will probably be the true take a look at for the renewed transatlantic love declarations.

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Washington desires to permit wider manufacturing of coronavirus vaccines, unhindered by patent protections | Saul Loeb/AFP by way of Getty Pictures

2. Waiving vaccine patents

Mental property rights are possible off the agenda after the U.S. threw the EU beneath the bus in Might. Washington’s about-turn to help a waiver on patent protections for coronavirus vaccines blindsided many and left the EU scrambling to defend its continued opposition to an identical waiver proposal at the WTO. 

The goal of Washington’s plan? To permit wider manufacturing of coronavirus vaccines, unhindered by patent protections. The EU argues it gained’t work, and that components akin to manufacturing are the limiting issue. However there are cracks in EU solidarity, with Italy and Belgium indicating help for a waiver. 

Formally, the EU is standing agency as considered one of the few WTO contributors delaying detailed discussions on the proposal. On Friday, it offered a counter-proposal that sidesteps requires a waiver in favor of clarifying current provisions that permit international locations to drive particular person vaccine makers to share patents throughout well being emergencies.

3. Transferring everybody’s information

It’s been nearly a yr since the EU’s high court docket annulled an information flows cope with the U.S. referred to as Privateness Defend due to fears of American surveillance practices. It’s the second time Europe’s high judges have killed such an settlement, and the strain is mounting to get it proper this time. 

Brussels and Washington don’t see eye-to-eye on how to repair the settlement in order that it meets Europe’s excessive privateness requirements, however Biden is eager to use this journey to push for a high-level political settlement with Fee boss Ursula von der Leyen. The objective is to lay the groundwork for a brand new transatlantic information switch deal.

The stakes are excessive. Privateness Defend underpinned billions of {dollars} in EU-U.S. digital commerce, and firms on either side of the Atlantic have been pushing onerous for a substitute settlement for nearly a yr. Political deal or not, main hurdles stay over potential limits on how U.S. nationwide safety companies can entry EU residents’ information.

4. Commerce with China

No one point out the China deal. 

The EU in December struck an funding cope with Beijing, handing a giant reputational win to China simply because it dismantled freedoms in Hong Kong, locked up tons of of hundreds of Uyghurs with out trial and withheld essential data on the origins of the coronavirus outbreak.

The timing of the deal was greater than awkward for the Biden administration, which was not but sworn in however broke its silence to warn the EU about its Sino embrace. The deal is now on ice amid objections from the European Parliament. However that doesn’t imply Washington and Brussels are on the identical web page when it comes to commerce with their widespread rival. 

Whereas the U.S. has banned imports of merchandise from the Xinjiang area over slave-labor considerations, the EU has no such restrictions. The U.S. additionally continues to block reforms to the World Commerce Group that the EU sees as key to tackling Beijing’s state-capitalism mannequin.

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Pharmaceutical firms are closely reliant on U.S. gross sales to maintain the business wholesome | George Frey/Getty Pictures

5. The price of medicine

The U.S. has regularly complained that Europe pays too little for medicine, leaving pharmaceutical firms closely reliant on U.S. gross sales to maintain the business wholesome. With the U.S. pharma foyer having the ear of lawmakers, firms have remained sheltered from any effort to standardize drug pricing negotiations on the foundation of how a lot added worth new therapies really present. So-called well being expertise assessments have been commonplace in Europe for over twenty years and are credited with stopping drug costs from spiraling and retaining well being programs reasonably priced. 

Biden has promised to sort out drug costs, and progressive Democrats have drafted a invoice that may give the federal authorities the energy to negotiate costs over insurance coverage firms — nevertheless it’s already facing opposition from the president’s celebration. A bunch of Home Democrats desires to see extra average reforms that may protect America’s “invaluable innovation ecosystem.” The divide might present drugmakers with their escape from a invoice thought-about by the business as a worst-case situation for U.S. drug pricing, and proceed to drive a wedge between transatlantic allies.

6. Taxing Huge Tech 

There’s lower than a month to go earlier than negotiators are anticipated to attain a worldwide deal to revamp the world’s tax regime. After the Biden administration unveiled new proposals — focusing on the world’s high 100 firms, and not simply Silicon Valley’s greatest names — the temper music modified on getting a deal over the line. Europeans, significantly France, are keen to embrace all the Huge Tech firms, and are prepared to attain a compromise with the U.S. on which different firms also needs to be included in the revamp. 

However nothing is definite. U.S. officers launched — and shortly postponed — billions of {dollars}’ value of retaliatory tariffs on international locations, together with many in Europe, that had imposed their very own nationwide digital companies taxes. These home regimes are nonetheless in place till a worldwide deal is finished. 

The European Fee can also be about to launch its personal digital levy that would complicate the last days of negotiations. U.S. lawmakers’ eyes are so fastened on worldwide negotiations for a multinational company tax that almost all have ignored the digital tax that EU policymakers will individually suggest. Brussels insists the EU initiative, anticipated in July, is not any large deal. However amongst those that have seen it stateside, there’s concern it might upend a worldwide compromise.

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The EU desires to create a worldwide golden customary for protected AI, however the U.S. is unlikely to swallow a rulebook drafted in Brussels | David McNew/AFP by way of Getty Pictures

7. Getting forward of synthetic intelligence 

Europe has been courting the Biden administration since final yr when it comes to agreeing on controls on synthetic intelligence, however the silence from Washington is beginning to get awkward.

The EU desires to create a worldwide golden customary for protected AI. However the U.S., which is residence to the world’s greatest AI firms, is unlikely to swallow a worldwide rulebook drafted in Brussels.

In accordance to the Fee’s high digital Commissioner Margrethe Vestager, the EU-U.S. summit will kick begin a transatlantic initiative meant to enhance tech cooperation, dubbed the Commerce and Expertise Council. However an “AI Accord,” pitched by Fee President Ursula von der Leyen in December, has but to elicit an official response from Washington. 

There’s growing nervousness on either side of the Atlantic over what AI applied sciences can do in the arms of authoritarian states akin to China, and the U.S. and EU agree that applied sciences needs to be developed based mostly on democratic values. However what meaning in observe is unclear. In April, the European Fee proposed the world’s first AI legislation, to regulate AI makes use of almost definitely to hurt individuals. In the meantime, the U.S. stays loath to regulate its tech giants. 

8. A carbon border tax

Washington has made no secret of its disdain for the EU’s carbon commerce initiative coming in July. 

As POLITICO reported this month, Brussels is prepping a carbon border levy that may put a value on imports of metal, aluminum, cement, fertilizer and electrical energy, in an effort to forestall its business — which pays for its emissions beneath the bloc’s cap-and-trade carbon market — from decamping to laxer international jurisdictions. 

The EU hopes its plan may also nudge giant emitters to improve their local weather safety efforts, as international locations with equal CO2 costs can be exempt from the levy. However the U.S. — which doesn’t have a federal local weather value — already advised Europeans it needs to be a “final resort.” 

Taxing U.S. exports might show contentious even in Europe and worry of retaliation towards EU exports has already prompted Germany to pitch a “local weather membership” open to the U.S. to talk about insurance policies. But France, which has been the chief proponent of the carbon border tax proposal, is exhibiting no signal of backing down.

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The EU is much readier to take its meals manufacturing inexperienced than the big monocultures of U.S. agriculture | Scott Olson/Getty Pictures

9. Making agriculture greener

With a small-scale household farming mannequin deeply embedded in Europe’s tradition, the EU is much readier to take its meals manufacturing inexperienced than the big monocultures of U.S. agriculture. That’s spooking American policymakers, who’ve warned that the EU’s plan to remodel its meals system right into a greener mannequin by 2030 would have devastating results on EU-U.S. commerce and even danger a worldwide famine.

There’s some stunning room for convergence, nonetheless: genetically modified crops. Europe and the U.S. haven’t seen eye to eye for many years, with sturdy shopper opposition in the EU to what has been termed “Frankenstein meals.” 

However now a brand new battle over genetically altered meals, looming in Brussels as a part of the European Inexperienced Deal, might see insurance policies on both facet of the Atlantic converge. With the U.S. Division of Agriculture happy to treat gene-edited crops identical to regular crops, the European Fee not too long ago warmed to the concept of regulating gene-edited crops in another way from GMOs, thus probably eradicating the political stranglehold on new meals.

There aren’t any ensures: Greenpeace has already termed them “the new GMOs.”

10. Pricing carbon

The U.S. and EU have comparable local weather objectives, and reaching them goes to require a steep decline in carbon emissions. However they differ essentially of their strategy. 

The EU’s key device for driving down air pollution is to value it away. Making polluters pay an ever-increasing price by way of the bloc’s Emissions Buying and selling System has saved greater than 1 billion tons of CO2 and is driving fossil fuels from the electrical energy system, and pushing steel-makers and different carbon-heavy industries to clear up their factories. That value started to soar final yr, after lawmakers agreed to tighten the EU’s 2030 targets, greater than doubling since October.

In the U.S., Congress — largely the Republican camp — has remained implacably opposed to a federal carbon-pricing scheme. That’s regardless of broad help from many business and environmental teams. Many states have additionally embraced a carbon-pricing measure. 

But it surely’s not simply Republicans. Joe Manchin, a Democratic senator the Biden administration typically depends on to transfer laws by way of the tightly balanced higher home, as soon as actually shot a hole by way of Barack Obama’s cap and commerce invoice, in stark distinction to the EU’s local weather rhetoric.

11. Nord Stream 2

With Brussels up to now unable to discover a authorized method to kill the Russia-to-Germany undersea pure gasoline pipeline it dislikes, brazenly opposed international locations like Poland, Latvia, Lithuania and Estonia had hoped U.S. President Joe Biden would kill off the Gazprom-backed venture for them. 

These desires evaporated in late Might, when Biden failed to impose sanctions on Nord Stream 2 and publicly gave up on attempting to cease building in the identify of saving the U.S.-German relationship. Berlin and Moscow cheered the transfer. 

Ukraine was furious, saying Russian President Vladimir Putin now had a “royal flush” in his arms to negotiate on the battle in Donbas forward of the upcoming Biden-Putin summit in Geneva. U.S. lawmakers have been additionally rankled by Biden’s backdown, given the broad bipartisan help for sanctions.

U.S. Secretary of State Antony Blinken on Monday stated sanctions on Nord Stream 2 would have created “a poisoned nicely with considered one of our closest companions, Germany.” 

However whereas Biden might have happy Berlin, his repute as an ally of post-Soviet international locations in Europe (in addition to a staunch anti-Putin crusader at residence) has been critically dented.

Helen Collis, Ashleigh Furlong, Jakob Hanke Vela, Melissa Heikkilä, America Hernandez, Stuart Lau, Vincent Manancourt, Karl Mathiesen, Barbara Moens, Mark Scott, Bjarke Smith-Meyer, Paola Tamma and Eddy Wax contributed reporting.

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