Stronger Together: The Case for a Transatlantic Technology Alliance

| Fred Humphries, Corporate Vice President of U.S. Government Affairs and Casper Klynge, Vice President of European Government Affairs

Last week’s G7 summit and this week’s meeting between U.S. President Joe Biden and European Commission President Ursula von der Leyen as well as the President of the European Council, Charles Michel—the first such U.S.-EU summit since 2014—come at a critical moment. These meetings have taken place against the backdrop of a world that is just beginning to emerge from the economic and social disruptions of the coronavirus pandemic. Democratic institutions on both sides of the Atlantic face serious threats. The dynamics of global geopolitics are shifting in profound and unpredictable ways. And the imperative to make progress in the transition to a green economy grows more urgent every day.

Meanwhile, the transatlantic relationship has grown tenuous as fissures between the United States and Europe over trade and technology policy continue to widen.

While there are real differences between the U.S. and the EU, it is also clear that a strong transatlantic relationship enjoys broad support in the United States and across Europe, and that leaders on both sides of the Atlantic see President Biden’s trip as an important opportunity to renew the partnership. As President von der Leyen said in her 2020 State of the Union address, “we will always cherish the transatlantic alliance based on shared values and history, and an unbreakable bond between our people.” And, as President Biden wrote in an op-ed before his trip, this visit “is about realizing America’s renewed commitment to our allies and partners, and demonstrating the capacity of democracies to both meet the challenges and deter the threats of this new age.

But if these meetings reflect how much both sides value the transatlantic relationship, they echo with uncertainty over the future of U.S.-European relations. At this critical turning point in history, can the relationship between Europe and the United States once again serve as a catalyst for cooperation among democratic allies and partners in the face of fundamental global challenges? Can we move beyond well-meaning statements of shared interest and take concrete steps to bolster trust, drive alignment, reach compromises, and take joint action?

From our perspectives in Washington D.C. and Brussels, we believe the answer to both these questions is and must be a resounding “yes” given everything that is at stake.

A Transatlantic Technology Alliance Built on Common Principles and Open Markets

When considered as a whole, the transatlantic economy is the largest, most prosperous, and most innovative in the world. Based on a history of shared values and commitment to joint defense, the transatlantic security alliance is also the world’s strongest. But persistent differences over technology policy have prevented both sides from realizing the full benefits of these strengths.

We believe that to meet the great challenges of our time, a transatlantic technology alliance is vital. It is clearly in the interest of the United States that Europe strengthens its competitiveness and succeeds in the twin transitions to a green and digital economy. And Europe needs America to do more to foster trust in advanced technology, even as it strengthens its own innovation capabilities.

What do we mean by a technology alliance?

It begins with common principles guided by our shared commitment to democratic values and the responsible use of technology. This means coordination—if not full convergence—on technology governance is essential to the future of the transatlantic relationship. This will enable the United States and Europe to lead the way forward toward global regulatory and policy coherence.

A transatlantic technology alliance must also reinforce its commitment to open markets that allow technology sectors on both sides of the Atlantic to grow and thrive. A transatlantic market built on a commitment to responsible technology, democracy, fairness, and trust will strengthen EU and U.S. global competitiveness. Microsoft’s recent European Data Boundary announcement is one example of how technology can align with Europe’s digital aspirations and the goal of fostering a thriving domestic technological ecosystem, in the spirit of making TechFit4Europe.

A Path Forward – Cooperation on Democracy, Trust, and Fairness

Throughout modern history, European-American institution building in response to crisis has been an important step toward sustained collaboration to address new challenges. So we are encouraged to see the announcement of the U.S.-EU Trade and Technology Council. Our hope is that the Council serves as a focal point for making substantive progress in addressing policy differences between the U.S. and the EU now while paving the way for deeper and broader progress in the future.

Currently, it is urgent that we work together to calibrate regulatory goals and technological innovation to increase mutual trust and protect democratic institutions around the world. It is also important to remember that in today’s digital world, innovation requires connected networks and open markets. With these points in mind, we see opportunities for progress in these five areas:

  • Strengthening the resilience of democratic institutions: Democracy is under pressure from cybersecurity threats, disinformation, the weakening of trusted media ecosystems, and growing discontent over the perceived failure to realize a fair and equitable transition to a more sustainable, tech-intensive economy. This makes it vital to identify ways to put technology to work to create both secure and green economies. We must also broaden access to the opportunities and benefits that technology can create for citizens on both sides of the Atlantic.
  • Deepening collaboration on norms for responsible technology development: Much more needs to be done to build public and governmental trust in emerging technologies, particularly when it comes to AI and the use of open data. We are encouraged by positive signals from the U.S. administration in response to the European Commission’s legislative proposal on AI, which could serve as the foundation for regulatory cooperation between the EU and U.S.
  • Implementing a sustainable solution for transatlantic data flows: Every business sector, scientific and technological research, and many aspects of peoples’ daily lives depend on the flow of data across international borders. The uncertainty created by the Schrems II decision that invalidated the EU-U.S. Privacy Shield framework threatens all of that—and with it the health of businesses and economies on both sides of the Atlantic. Ideally, a transatlantic agreement on data flow principles will pave the way toward consensus on norms for the movement of data across borders among democratic allies and trusted partners around the world.
  • Defining principles for fair treatment: Economies and democracies on both sides of the Atlantic will be strengthened if the U.S. and the EU work together to define principles in areas such as standards for digital trade and rules that make technology supply chains more secure and resilient. One way to achieve this would be to jointly advance such principles in multilateral trade forums like the World Trade Organization in recognition of their importance to the EU and U.S. beyond the transatlantic market.
  • Fostering the digital transformation of small and medium-sized enterprises: The role that small businesses play in driving economic growth, innovation, job creation, and broad-based economic opportunity has never been more critical—both for driving post-pandemic economic recovery and the transition to a greener economy. This makes it essential to create a framework for transatlantic digital trade that enables small and medium-sized business reap the benefits of digital technologies. Ensuring that smaller businesses have access to secure and resilient supply chains is also vital.

For the transatlantic partnership to succeed, we believe that industry and civil society must be involved in the process to develop new principles, norms, and regulations—both because they provide a valuable perspective and to ensure that industry can be held accountable. While this can happen in many ways, a good place to start would be to establish a consultation mechanism to advise the Trade and Technology Council.

If we can achieve greater mutual understanding, coordination, and convergence around shared principles, we have the potential to grow stronger together in the face of the challenges of a changing world where technology plays a critical role.

It won’t be easy, but it is essential. The good news is that after a difficult period for the transatlantic relationship, the EU-U.S. summit this week has opened the door to new possibilities.

At Microsoft, we believe there is a shared responsibility that spans governments, businesses, and citizens to use this window of opportunity wisely. We stand ready to play our part. Let’s get to work.

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