Reinventing Transatlantic Relations on Climate, Democracy, and Technology

Summary

While the election of Joe Biden to the U.S. presidency presents an opening to restore the transatlantic relationship after Donald Trump, the real question facing U.S. and European officials is whether they can successfully manage to advance a new transatlantic agenda for the coming decade. Three pivotal areas where cooperation has fallen short in recent years but where there is now significant potential to do more are climate and energy, democracy and human rights, and digital technology issues. Representing the most pressing challenges our societies are facing in the twenty-first century, progress in these three areas could also help rebuild trust and promote cooperation in other policy areas. To get the transatlantic relationship back and on track and to ensure that it will remain relevant in the future, the United States and the European Union should therefore prioritize putting forward concrete ideas and taking actionable steps in each of these areas over the coming four years.

Introduction

After four years of severely strained ties between Washington and European capitals under President Donald Trump, the general expectation is that the incoming Joe Biden administration can help usher in a more positive and constructive phase in transatlantic relations. But, while the Biden presidency may present a fresh opportunity to restart the battered U.S.-European partnership, it will take much more than merely good rhetoric and diplomatic gestures to make real headway. What is ultimately needed is to reverse the increasing lack of transatlantic trust and to identify specific areas of opportunity, while also being clear-eyed about what can realistically be achieved in the near term. As the Biden administration and European officials contemplate how to best advance relations over the coming four years, what might an ambitious, yet realistic new transatlantic agenda under a Biden administration look like?

While several areas—ranging from trade to foreign policy to security and defense—require urgent attention, there are three particularly important ones where transatlantic cooperation has fallen short during the past four years but where there is untapped potential to now do more. These are climate and energy, democracy and human rights, and digital technology issues. In each one, the Biden administration is likely to adopt a starkly different approach from the Trump administration. These new approaches can provide new opportunities to enhance cooperation with the European Union (EU) in a way that could also contribute to restoring trust in the overall relationship as well as lay the groundwork for greater convergence and trust in other more complicated areas.

The transatlantic relationship needs to evolve in order to stay relevant in the twenty-first century.

The transatlantic relationship needs to evolve in order to stay relevant in the twenty-first century. This paper proposes practical steps that the United States and the EU can take during the first year of the new Biden administration in the three areas listed above; more ambitious, longer-term objectives for transatlantic cooperation and upgraded EU-U.S. institutional ties; and suggestions for how to manage anticipated disagreements in a constructive way.

Climate and Energy

During the past few years, transatlantic cooperation on climate and energy issues has generally been poor, with some notable exceptions.

The EU has a long-standing track record in tackling climate change with strong leadership in international climate diplomacy, ambitious emission-reduction targets, investments in renewables and energy efficiency, and innovative solutions such as the Emissions Trading Scheme. Under President Ursula von der Leyen, the European Commission has reaffirmed its climate commitments. As part of the proposed European Green Deal and the new 2030 and 2050 climate targets, it seeks to make the EU climate-neutral by 2050 and has proposed a European Climate Law that would make this objective legally binding. Even amid the coronavirus pandemic and despite skepticism from certain member states, climate action has remained at the core of EU policymaking. In July 2020, EU leaders agreed on a massive economic-policy package that contains a substantial climate piece. Thirty percent of the EU budget over the next seven years has been reserved for investments in a green transition. This is in addition to a significant part of the union’s new €750 billion ($890 billion) pandemic recovery fund. The final budget approved by EU leaders and the European Parliament in December 2020 enshrines into law the ambition of cutting carbon emissions by at least 55 percent by 2030 compared to 1990s levels. The EU’s climate agenda over the next four years will be shaped by attempts to reconceptualize the European economy to incentivize sustainability and promote the efficient use of resources.

The United States has pursued a strikingly different path following the Trump administration’s approach that denies the reality of man-made climate change and perceives a trade-off between the environment and the economy. Trump has repeatedly expressed skepticism of climate change and rolled back climate policies and environmental regulations introduced under former president Barack Obama, most notably ones that aim to reduce carbon emissions. In line with an America First approach to foreign policy, in November 2020 the United States left the Paris Climate Agreement, which Trump said put an unfair burden on industrialized economies relative to developing ones. Trump also slashed spending on federal programs for advancing clean energy and mounted legal challenges to California’s forward-looking regulations on gasoline-powered automobiles.

Despite this, the United States still made progress on reducing its overall climate emissions over the last four years, mainly thanks to phasing out coal energy as well as several states expanding wind and solar power capacity and achieving energy-efficiency gains. As a result, about 20 percent of domestic energy production is today comprised of renewables. The coronavirus pandemic is expected to intensify this trend as a result of federal stimulus funding for green-energy projects and cheaper access to capital to invest in clean-energy technologies.

Moreover, while the federal government has undercut many climate efforts, several states and cities have joined forces to take action against climate change. Shortly after Trump announced his intention to pull the United States out of the Paris Climate Agreement, twenty-four states and Puerto Rico formed the U.S. Climate Alliance to support and implement policies that advance the goals of the climate agreement. These states represent 55 percent of the U.S. population, 40 percent of U.S. greenhouse-gas emissions, and a $11.7 trillion economy. Other notable subnational climate initiatives in recent years include America’s Pledge, We’re Still In, and Climate Mayors. However, the lack of a federal climate agenda and coordinated actions has clearly limited what can be achieved at the state and local level.

As a result of the diverging U.S. and EU approaches during the Trump administration, transatlantic cooperation on energy and climate issues has fallen short over the past four years. There are some notable exceptions, however. For instance, cooperation on regulatory issues pertaining to sustainability such as offshore wind has continued between the U.S. Department of the Interior and the EU. The regular EU-U.S. Energy Council—which brings together the U.S. secretaries of state and energy with the EU high representative for foreign affairs and security policy and commissioners for energy and environment—was last convened in July 2018, and was accompanied by the first-ever business-to-business summit on liquefied natural gas. The Trump administration has been actively engaged on energy security issues in Central and Eastern Europe, including as part of the Three Seas Initiative. New forms of cooperation between subnational U.S. climate initiatives and their European counterparts have also sprung up, at least partially making up for the lack of cooperation between European capitals and the U.S. federal government.

With the coming change in administration, there is a significant opportunity to upgrade transatlantic cooperation on climate and energy, as Biden is expected to be far more active on these issues, creating more potential synergies between the United States and the EU. He called climate change an urgent crisis and has proposed an ambitious climate agenda, consisting of $2 trillion in green stimulus spending over the next four years in order to boost renewable power, reduce carbon emissions, and create new jobs in a green economy. Additionally, Biden has pledged to achieve the goal of carbon neutrality of the power sector by 2035 and net-zero greenhouse-gas emissions of the entire U.S. economy by 2050 while also reversing Trump rollbacks. He has pledged to restore U.S. global climate diplomacy leadership through efforts such as convening a climate world summit to directly engage the leaders of the major greenhouse-gas-emitting countries and has appointed John Kerry to serve as his climate envoy.

Transatlantic climate efforts should initially focus on areas where they are likely to continue current cooperation or achieve new practical results in the short term.

On the other hand, Biden has been inconsistent over whether as president he will support the Green New Deal proposed by Democrats in the House of Representatives in 2019. Moreover, he is unlikely to be able to pursue wholesale change in the U.S. approach to climate and energy given the role of Congress. If the Republicans control the Senate, this would likely mean that many of the domestic climate investments he has proposed would be dead on arrival. Yet in some areas where independent regulatory agencies can take action, such as setting tougher environmental, social, and governance (ESG) standards, Biden will be able to take action without Congress. Finally, some aspects of Biden’s Buy American domestic agenda could also lead to roadblocks for transatlantic cooperation and reduce the concessions the new U.S. administration would be willing to make in the climate and energy space.

Transatlantic cooperation on climate and energy is essential. While the cooperation between subnational groups that began in the last four years will continue, the return of U.S. engagement and leadership on global climate issues by the Biden administration would boost the chances for shaping a joint transatlantic strategy and for the United States and the EU to lead international efforts to fight climate change. Their efforts should initially focus on areas where they are likely to continue current cooperation or achieve new practical results in the short term. While climate and energy are likely to be key topics for a transatlantic reset during the Biden administration, a reappraisal of their relationship in this space is needed to figure out where they have competitive advantages that they can collectively leverage (see box 1).

Global Democracy and Human Rights Support

The global context for democracy and human rights has become more complicated in recent years, including a broad “democratic recession” affecting dozens of democracies across all regions, growing antidemocratic influence across borders from China and Russia, and rising illiberalism in several countries. In Europe, rollback of democratic freedoms and basic rule of law has occurred in countries such as Hungary, Poland, and Turkey. At the same time, the EU has sought to raise its profile in support for global democracy and human rights, albeit with mixed results thus far.

In recent years, the EU has mainly pursued global democratic support through low-profile aid projects while generally taking a more ambiguous approach when it comes to tackling democratic regression. Sanctions have mainly been against countries that represent security concerns: Russia, Venezuela, Syria, and Iran. These sanctions range from arms and dual use export restrictions to asset freezes and travel bans. The EU has also suspended trade preferences for Cambodia in response to human rights abuses, and it has considered doing the same against Myanmar. Belarus’s fraudulent presidential election this year has highlighted the limitations to the EU’s ability to act sufficiently in a united and timely manner, due to the lack of consensus among members. It was finally able to agree on imposing sanctions for repression and election falsification on forty individuals as well as on not recognizing Alexander Lukashenko as the legitimate president of Belarus, eventually imposing sanctions against him.

Moreover, EU foreign ministers approved a proposal by the Netherlands for an EU-wide global sanctions regime against individuals involved in human rights abuses. This proposal, modeled after the U.S. Global Magnitsky Human Rights Accountability Act, has been backed by European Commission President Ursula von der Leyen, who has called for tackling human rights issues more assertively by imposing sanctions quicker on individuals anywhere in the world, freezing their assets in the EU, and banning them from entry.

European leaders finally adopted the new EU human rights sanctions regime on December 8, 2020, but it is still unclear when and how it might actually be applied in practice. In 2020, the European Council also approved a new EU action plan on human rights and democracy that reaffirms a “strong commitment to advancing universal values for all,” encompassing protecting and empowering individuals, building resilient and inclusive societies, promoting a global system for human rights and democracy, and dealing with new technologies.

Under the Trump administration, the United States’ long-standing support for democracy abroad plummeted as part of an America First foreign policy that emphasized nationalism and sovereignty. Trump has expressed admiration for authoritarian leaders like Russia’s Vladimir Putin, Turkey’s Recep Tayyip Erdoğan, and the Philippines’ Rodrigo Duterte, while frequently criticizing democratic allies. The main exceptions have been the leaders of Cuba, Iran, and Venezuela, countries against which his administration used sanctions and political pressure. U.S. officials criticized China’s human rights situation, albeit often with mixed messages. While European countries condemned Saudi Arabia for the killing of the U.S.-based journalist Jamal Khashoggi in 2018, Trump praised the value of economic relations with Saudi Arabia, resisted punishing Saudi Arabia in order to preserve arms sales, and rejected Congress’s request to investigate the murder.

In addition to addressing human rights abuses and infringements on democracy around the world less, the Trump administration sought to slash the funding for federal agencies providing democracy assistance, though Congress rejected many of these attempts. For example, when the administration initially announced plans for a 31 percent budget cut in democracy assistance, Congress’s 2017 omnibus appropriations included a 40 percent increase in the State Department’s Human Rights and Democracy Fund. Other forms of democracy support including electoral observation missions, training for civil society organizations, and human rights dialogues have nevertheless continued.

The past four years have seen divergence in U.S. and EU approaches to democracy and human rights issues.

Additionally, the United States has maintained its commitment to the Global Magnitsky Act, sanctioning multiple corrupt actors and human rights abusers in countries like Nicaragua, South Sudan, Gambia, Myanmar, and the Democratic Republic of the Congo. However, the credibility of the United States as a global democracy supporter has clearly taken a hit as the Trump administration has been criticized for its militarized response to Black Lives Matter street protests, repeated verbal attacks on the media, and the president’s refusal to acknowledge his electoral defeat.

The past four years have seen divergence in U.S. and EU approaches to democracy and human rights issues, and the Trump administration hardly engaged in any meaningful high-level coordination. Despite this, there has been a degree of alignment at the operational level. In July 2020, the EU imposed sanctions on officials in Hong Kong in response to its new national security law, following the example of the United States as well as of Australia and the United Kingdom. Like the EU, the United States imposed sanctions on Belarusian officials for undermining democracy. At the same time, there is wariness in the EU about U.S. overreliance on extraterritorial sanctions that could adversely impact European entities.

There is widespread expectation that the Biden administration will champion human rights and democracy as well as more actively engage European counterparts on these issues. For example, the Biden campaign declared its ambition to convene a group of democratic nations in a Summit for Democracy to discuss fighting corruption, defending against rising authoritarianism, and advancing human rights. Although a major change is perhaps unlikely, Biden has signaled that human rights will be at the core of U.S. foreign policy, with a much stronger emphasis on diplomacy. While Congress’s efforts will continue, including on sanctions, the return to more executive leadership will make U.S. policy clearer. As the coronavirus pandemic and pressing domestic issues will likely take priority at the beginning of the new administration, European countries can still expect Biden to reaffirm the traditional U.S. commitment and cooperation with allies on democracy and human rights promotion while also taking a tougher approach toward autocratic leaders around the world as part of a “free world” agenda.

At present, the coronavirus pandemic has arguably pushed democracy support lower down on the list of priorities. However, the post-pandemic world will provide both challenges and opportunities for democracy that will need to be addressed. Transatlantic cooperation will be essential in doing so. For Europe, the Biden presidency presents more opportunities to engage with Washington on these issues (see box 2). As global challenges to democratic governance and human rights continue to grow, the transatlantic relationship will need renovation, cooperation, and consistency from both sides. However, given their own domestic shortcomings, the United States and Europe need to approach democracy promotion abroad with more humility and seek to address their own flaws in order to be more credible abroad.

Technology and Digital Issues

Technology and digital issues are increasingly a pivotal part of the transatlantic agenda. The Biden administration should prioritize engagement with the EU on shaping a transatlantic technology agenda, given the need to promote economic growth in the aftermath of the coronavirus pandemic and to address the challenges in the technology space stemming from a rising China.

In recent years, the EU has intensified its efforts to become a leading global player in technology, leveraging the “Brussels effect” to set global rules for the digital sector. This is driven by economic and strategic rationales, and it has manifested itself in several new EU policy initiatives that affect digital society, privacy, and data flows. The adoption of the GDPR in 2018, creating common standards for personal data protection, was a flagship effort. Promoting a Europe “fit for the digital age” is a top strategic priority for the European Commission, often with an emphasis on the need for more “digital sovereignty.”

The evolving approach aims not only to make the EU a more competitive player on the world stage, but also less reliant on foreign counterparts. In recent years the European Commission has released, among other things, a white paper on artificial intelligence (AI), a Data Protection Strategy, and a European Industrial Strategy. In its quest to become a leader in AI regulation, the EU plans to scale up funding and innovation while also creating ethical guidelines for “trustworthy AI.” In its data plans, a framework for “common European data spaces” is expected along with a European Cloud Initiative and the Gaia-X project, which aim to create Europe’s own data infrastructure. Another key part of the European Digital Strategy is the new Digital Services Act, which sets out to replace the E-Commerce Directive of 2000 and create a legal framework for digital services and ensure that providers in the EU mitigate risks and respect EU fundamental rights and establish a liability regime. Also relevant in this regard is the new Digital Markets Act that proposes rules for large companies considered gatekeepers. The European Commission plans to accelerate its commitment to innovation in AI and quantum computing as part of the post-pandemic economy recovery package. Some European countries such as France are also pushing ahead with a digital tax on big tech companies, which the European Commission has expressed support for.

Much of the Trump administration’s digital and tech agenda focused on competition with China. It restricted Chinese access to U.S. critical technologies, imposed bans and restrictions on Chinese technology vendors such as Huawei and ZTE or social media apps TikTok and WeChat. It urged other countries to do the same, and identified “critical and emerging technologies” on which to compete with China. The United States has also taken some steps to regulate the digital sector at home and set new standards for emerging technologies. In May 2020, Trump issued an executive order on preventing online censorship with the intent of limiting the legal protection offered by Section 230 of the Communications Decency Act, which shields websites from liability for content created by their users and content moderation decisions. While Democrat and Republican members of Congress are talking about repealing Section 230, they have different objectives and the fact that the issue is so politicized means it will likely be hard to reach a bipartisan agreement anytime soon. In 2019, Trump signed an executive order announcing a national AI strategy. The White House soon after released a statement on AI Principles focused on a strategy for engagement in AI technical standards and a regulatory document for the trustworthy development, testing, deployment, and adoption of AI technologies. The 2021 budget announced an investment of $142.2 billion in federal research and development, a 6 percent increase from the 2020 budget.

The Trump administration clashed with European countries over their plans for digital taxes, claiming that it would open an investigation into taxes on digital commerce that would negatively affect where U.S. tech giants like Facebook and Amazon pay taxes. Yet despite their differences, there have been collaborative efforts and aligned policies between the two sides in recent years. The United States joined the French-Canadian-led Global Partnership on AI and engaged Europe on 5G with some success, albeit with a heavy-handed diplomatic approach. The Trump administration expressed appreciation for EU initiatives like the 5G Cybersecurity Toolbox and signed bilateral memoranda of understanding on 5G security with European countries, mostly Central European ones. The State Department has engaged with the European Commission on exploring synergies between the EU’s toolbox and the United States’ Clean Network, which aims to safeguard sensitive information from intrusions by malign actors, and the necessity for partnership for securing telecommunications infrastructure. When it comes to regulating big tech companies, there are signs of converging attitudes in the debates on things like antitrust and competition policy. Cases in point include the recent lawsuit filed by the Justice Department against Google for its anti-competition tactics to preserve a monopoly—the most aggressive U.S. legal action taken against a company’s dominance in the tech sector in more than two decades—and the growing debates in Congress over Section 230. Finally, while the federal government has not developed its version of the EU’s GDPR, multiple U.S. states such as California and Washington have followed suit and enacted similar data-protection laws.

While Biden’s digital and technology agenda is still somewhat unclear, he has highlighted a few potential actions his administration will take, such as boosting investments into enhancing U.S. technological leadership. He has suggested a willingness to repeal Section 230 while also claiming that dismantling companies like Facebook should be considered. Other areas of potential action include restoring net neutrality rules and removing laws that block municipal broadband (internet access that is provided fully or partially by local governments). On 5G, the Biden administration is expected to continue its predecessor’s efforts to ban Huawei and focus on tech competition with China more generally, on which there is strong bipartisan consensus, though its approach would likely be more alliance-oriented and focused on creating the rules for fair and just practices. While the Biden administration might be more willing to cooperate with the EU on greater regulation of the technology sector, some of the EU’s plans for digital taxation, data protection, antitrust, and content moderation could also become a source of friction.

The EU and the United States should initiate a high-level strategic dialogue and cooperation on technology and regulation based on shared values and goals.

The EU and the United States should initiate a high-level strategic dialogue and cooperation on technology and regulation based on shared values and goals. They should also seek to shape a transatlantic technological agenda and manage shared challenges from digitization and emerging technologies. A strong case can be made that technological leadership by the United States, the EU, and other liberal democratic countries will be crucial in order to safeguard democratic institutions, norms, and values as well as to avoid further fragmentation of the internet. Since the initial tenure of the Biden administration will coincide with several anticipated new EU technology policies, it should immediately seek to engage the EU to find common ground to promote an open and global internet based on democratic principles and norms (see box 3).

Conclusions

After four turbulent years of Donald Trump and against the backdrop of an increasingly competitive international system, the transatlantic relationship will need more than just positive rhetoric and a return to pre-2017 areas of cooperation in order to stay relevant. Three important areas where cooperation has fallen short in recent years but where there is now a pressing need to do more are climate and energy, democracy and human rights, and digital technology issues. Each of these three areas represent significant opportunities for improved transatlantic relations and should therefore be seized upon by U.S. and European officials as part of constructing a new transatlantic agenda. The new Biden foreign policy team will no doubt have a very crowded docket, but positive steps in these areas can make a significant difference in resetting the transatlantic relationship. For their part, European officials need to come forward with very concrete ideas such as some of these proposed above—first trying to build some concrete wins on small and medium-sized issues rather than trying to renegotiate the relationship as a whole all at once.

Acknowledgments

This paper is informed by three off-the-record workshops attended by American and European officials and experts hosted by Carnegie and the Heinrich Böll Stiftung Washington, DC in September 2020. The author would especially like to thank Dominik Tolksdorf, Sabine Muscat, and Nora Löhle from the Heinrich Böll Stiftung for their helpful feedback on an earlier draft of the paper, and Venesa Rugova for research assistance and support. The views expressed in this paper are those of the author alone and do not necessarily reflect the position of the Heinrich Böll Stiftung Washington, DC.