TTC May Be Excluding Asian Countries on Export Controls, Other Trade Issues, Expert Says
Although the EU-U.S. Trade and Technology Council is helping to foster important cooperation, it may be unintentionally leaving out other vital trade partners on a range of key issues, including export controls, said Mary Lovely, a senior fellow with the Peterson Institute for International Economics. She said the TTC may be emphasizing the U.S.-EU relationship too much when the two sides should be doing more to convince other countries to adopt similar sanctions and export restrictions against Russia.
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“We see a danger of it being very bilateral and focused on the relationship and omitting the fact that both countries have enormous interest in other parts of the world,” Lovely said during an April 20 event hosted by PIIE. “I worry what that means for those that are not viewed as our friends.”
Lovely said she has pushed TTC officials to also consider including Asian countries, which play an important role in penalizing Russia and could cooperate on a range of issues the council was designed to address. “How [will] Asia fit into this when we're talking about issues related to export controls, supply chain resilience?” she said. “We have to bring Asia into it. They're key to all those things.”
Denis Redonnet, the European Commission’s chief trade enforcement officer, said the cooperation extends beyond just the U.S. and EU, pointing to the unprecedented number of sanctions against Russia that more than 30 countries, including the G-7, have coordinated. He said they all “working together on the question of aligning these measures, the reactions to the situation with Russia, the support to Ukraine. So, it goes beyond the pure trans-Atlantic effort.”
Redonnet also said the TTC is an important forum for the U.S. and EU to work together to convince other countries that haven’t yet sanctioned Russia to do so, such as India and China. “We can do this separately,” Redonnet said, “but we can also do this in a joined-up manner, and that’s likely to be much more efficient.”
But convincing other countries to impose the measures hasn’t been simple, he said. “It's not going to be a question of the EU and the U.S. turning around to some of these countries and whacking them over the head saying, ‘now you should align,’” he said. The U.S. and EU have to “create the incentives, create the arguments to bring them in the right direction.”
Lovely also agreed there are benefits to the U.S. and the EU working together to convince “fence-sitters” to impose Russia sanctions. “For many countries, their relationship with the EU, both economically and politically, is different than it is with the United States,” she said. “The EU speaks with a different voice, and that can be a powerful way to move the sanctions forward.”
Although Redonnet said more work in the TTC is needed, he said the group is “starting to show promise” in its export control and foreign investment screening working groups. He specifically applauded the two sides’ collaboration on export restrictions, including the U.S. Commerce Department’s creation of a list of countries that have imposed similar export controls against Russia and are excluded from certain license requirements under the U.S.’s two recently issued foreign direct product rules (see 2203040075 and 2202240069).
“This makes a big difference in terms of avoiding the sort of unwanted tension between the EU and the U.S.” on the extraterritorial application of U.S. trade measures, Redonnet said. “That has been, for us, very significant, an unprecedented form of alignment and cooperation with big implications.”
He said he hopes the two sides can now turn to enforcement, something Brussels is “very focused” on. “There is no reason why we should not continue to have an allied approach and close cooperation to make sure that the measures work,” Redonnet said.