A useful contrary An indicator of the substance of international talks is whether the negotiators are talking about something specific. The more they do, the less they usually achieve. The Trade and Technology Council (TTC), a forum for the EU and America to coordinate regulation seems to prove this admittedly cynical rule. At its last meeting on Dec. 5, the White House said it had advanced “concrete actions” on transatlantic cooperation by launching new “concrete initiatives,” while a joint statement with Europeans delivered even more “concrete results” and “concrete results.” Measures” promised “.
The problem is that for all the talk of concreteness, America and Europe now have major disagreements on the economic front and few obvious solutions. The main bone of contention is the Inflation Reduction Act, the centerpiece of the Democrats’ climate and industrial strategy. That IRA, signed in August, includes nearly $400 billion in funding for energy-related projects, much of which is dependent on goods being produced in or near America. There are subsidies for automakers who buy locally made batteries, tax credits for domestic renewable fuel producers, and tax breaks for consumers who buy electric vehicles that contain enough North American components.
The Biden administration believes these stimuli are necessary to spur the development of America’s green economy. In industries like electric vehicles, America lags behind (see chart). The concern in Europe and Asia is that America’s huge market and bounty inducements will attract their businesses at the expense of their home bases. In the past year alone, international car manufacturers have cut back bmw and Toyota to Mercedes and Stellantis have announced major investments in America. The aftermath of Russia’s invasion of Ukraine makes matters worse: a shift away from Russian energy supplies has raised costs in Europe and further damaged its industries.
Europe’s displeasure was evident on the eve of the Washington meetings, direct current. Emmanuel Macron, France’s President, described the American subsidies in an interview as “killer for our industry”. CBS‘s “60 Minutes” show. Ursula von der Leyen, President of the European Commission, the bloc’s executive, spoke of distortions by American law.
a single TTC Hitting would never heal the rift. The forum included one-day sessions on risk management in artificial intelligence, plastics recycling standards, semiconductor supply chain disruption alert systems, and more. And yet Valdis Dombrovskis, the EU’s trade commissioner, said he had left the country TTC “slightly more optimistic” about working with America. This optimism follows President Joe Biden’s promise that America could tweak its subsidies to keep European companies happy.
Warm words aside, what can America do to help? Its climate tax credits, which are enshrined in law, cannot be easily changed. There is no chance of new legislation in the next two years of divided Congress. Instead, the answer will likely come from Europe, where officials are considering their own green incentives. The most concrete result of TTC could therefore be America’s and Europe’s continued drift toward a full-fledged subsidy race. ■
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