(Bloomberg) — The European Union will aim to agree on a framework for working with the U.S. to screen potentially hostile foreign investments when officials meet in Pittsburgh later this month, according to a person familiar with the preparations for the talks.
The two sides are working toward a statement of principles that would see them share information and data relating to foreign takeovers and cooperate on assessing investments in strategic assets, the person said. The inaugural Trade and Technology Council on Sept. 29 will also aim to deliver similar statements to shape cooperation on export controls, artificial intelligence and critical supply chains of goods like semiconductors, said the person, who asked not to be identified discussing sensitive matters.
A press officer for the European Commission declined to comment. The meeting comes at a moment when China, like other countries, has been shopping around for technology firms and is boosting subsidies and research spending. Beijing has declared its intention of becoming the world leader in industries from cutting-edge chips to AI.
The U.S. and the EU have also accused Beijing of human rights abuses, cyber espionage and flooding global markets with artificially cheap goods to undermine competitors. Managers at an Italian military-drone company were reported to prosecutors recently after it was alleged they had sold a majority stake to state-owned companies in China.
But as the U.S. and the EU look to combine their regulatory muscle to set global standards driven by common values, the Europeans are trying to avoid being drawn too closely into Washington’s sphere of influence. There is some concern in Brussels to ensure that any tools that might eventually result from the technology and trade council can’t be used by the U.S. to harm European companies, the person said.
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The bloc is still stinging from the Biden administration’s decision to withdraw from Afghanistan with little consideration for allies’ concerns and is conscious of its reliance on the U.S. for digital technologies.
In a policy paper due to be released this week, the European Commission will set out a technology and digital strategy for the next decade that seeks to ease the EU’s dependence on countries including the U.S. A draft of the paper seen by Bloomberg notes that 90% of EU data is managed by U.S. companies and key parts of critical supply chains are under U.S. proprietary control.
The EU needs to increase investment by about 125 billion euros ($150 billion) to upgrade its digital economy and compete with the U.S. and China, the paper says. That includes 42 billion euros for communication networks, 17 billion euros for semiconductors and 11 billion euros for cloud computing.
The paper sets out the challenges for the EU in reaching its goal of 20% global market share of cutting-edge semiconductors by 2030, warning that it is significantly outspent by both the U.S. and China, and both nations are investing to keep key technologies within their own shores.
The EU will push for stronger foreign investment tools to help keep hold of intellectual property in areas such as semiconductors, according to the program document. Although the paper doesn’t mention China directly, that move is aimed mostly at Beijing.
As they prepare for the Pittsburgh talks, the EU and the U.S. have a shared interest in setting and influencing global standards that can help them shape a common approach to China, the person added. While the text of any agreement is unlikely to name China, Beijing is the obvious target for the measures.
Semiconductors will feature prominently on the agenda for the meeting, said the person, cutting across several items, including work on supply chains, screening and export controls.
The EU will also be looking to establish digital partnership agreements with Japan, South Korea and Singapore as part of an Indo-Pacific strategy the bloc is launching this week.
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