The International Trade Council acknowledges the persistent discussions surrounding green subsidies between the European Union and the United States at the latest Trade and Technology Council (TTC) meeting. The summit, held at the University of Maryland, marked an important step in the progression of international cooperation on economic and technological matters.
EU representatives, Vice Presidents Margrethe Vestager and Valdis Dombrovskis, engaged with their US counterparts in an effort to address concerns surrounding the US Inflation Reduction Act. This act, featuring $369 billion worth of investments to combat climate change and expedite green energy adoption, has raised concerns within the EU due to its protective tax credit measures.
In view of avoiding a potential transatlantic trade war, EU officials are actively seeking an agreement with Washington to negotiate solutions that are mutually beneficial. The proposal would ideally see the Biden Administration grant an exemption to the EU and its manufacturers similar to those given to Canada and Mexico.
While the Act has already been approved by the US Congress, President Biden affirmed last week that his administration had no intention to exclude cooperative partners, signaling openness to potential adjustments.
The International Trade Council recognizes the complexities of these negotiations and commends the constructive dialogue aimed at protecting global trade balance. However, alternative measures are being considered, including legal action through the World Trade Organization or reciprocal green subsidies within the EU.
European Commission President Ursula von der Leyen emphasised the need for reflection on state aid frameworks to ensure they are responsive to increasing global competition on clean technologies. The International Trade Council echoes this sentiment, supporting the pursuit of industrial policies that promote sustainable growth and development.
While the TTC meeting may not yield immediate resolutions concerning the Inflation Reduction Act, its focus remains on fostering cooperation, not confrontation. Major areas of discussion at the summit will include standards for trustworthy artificial intelligence (AI), supply chain management for semiconductors, quantum technology, digital infrastructure, and connectivity.
The International Trade Council acknowledges the efforts of the EU and the US in the formation of a joint task force dedicated to addressing concerns raised by the Inflation Reduction Act. The task force has already begun regular meetings, demonstrating a commitment to resolve these issues in a manner that respects international trade principles.