MODERATOR: Good morning and welcome to this press conference on the Trade and Technology Council. We are very honored to welcome from the United States side Secretary of State Antony Blinken, the Secretary of Commerce Gina Raimondo, and the U.S. Trade Representative Katherine Thai, and from the EU side Executive Vice-President Margrethe Vestager and Executive Vice-President Valdis Dombrovskis. We have limited time this morning. We’ll go straight into a question, and the first question goes to Pieter Haeck from Politico.
Sir, your mike is coming. Please.
QUESTION: Thank you. (Inaudible) to discuss for example, on green technology, on microchips, is of course the Chinese elephant in the room. Is there at the moment a transatlantic position with regards to China, and do you expect it to change after the November elections or, do you think, the European parliament election in June? Thanks.
MS VESTAGER: Well, there’s only an elephant in the room if I admitted it, so – (laughter). So no, we can actually talk with one another about the things that occupy us. And what has been really important is some of the things that we have learned from our U.S. counterparts to put in motion what we think about when it comes to economic security.
We have had discussions about export controls. We have discussions about how to deal forward-looking when it comes to legacy technology on semiconductors. The U.S. is conveying a survey that is mandatory. We have a voluntary one. We will compare notes in order to take measures forward to make our supply chains resilient. And we have been coordinating from the very first day on how to avoid a subsidy race, make the best possible use of the incentives available for both the U.S. and Europe to increase our global footprint when it comes to semiconductors. And I think that strengthened us. It is not against someone; it is really pro a cooperation, and I think we have actually delivered.
SECRETARY RAIMONDO: Yeah, I would just say the role of advanced technology has changed the game when it comes to national security and economic security, and in fact we had a very robust discussion this morning in the TTC ministerial about using the TTC to further strengthen our collaboration as it relates to advanced technology, protecting our own shared interests in national security and economic security and working together to counter any coercion or non-market practices from any other country, including China. So in that respect, I think the TTC has shown itself to be effective and it’s an area of prioritization as the TTC moves forward.
SECRETARY BLINKEN: Just to add one more footnote, I think what we’ve seen over the last three years is growing, increasing alignment in our approaches to these issues. And when the United States and the European Union are aligned, when we’re working in common purpose, it’s a very powerful force. Together we represent almost half of world GDP, and that means that there’s a certain weight that comes with having a shared position on something. And whether that’s dealing with China or any other challenge, it makes a big difference. And the story to me at least of TTC is this growing alignment on all of the issues that you just heard alluded to, and we found that again today and I think it also inspires us to continue this work because the more we’re able to build convergence in our approaches, the more effective we’re going to be in making sure that we’re actually delivering results for the people we represent. That’s what this is all about fundamentally.
MR DOMBROVSKIS: Well, indeed just to complement this, one of the flagship initiatives on the Trade and Technology Council is the transatlantic initiative on sustainable trade and building green transatlantic marketplace, which is indeed the largest marketplace in the world, and whether we work together on resilient supply chains, on developing joint standards, the more economic clout we are actually having, and this work stream on developing resilient supply chains exactly in area of semiconductors is exactly one of the areas we are focusing on. So – and it’s very clear that in especially current very – economic – the very complicated geopolitical circumstances, it’s actually very important that EU-U.S. work together as strategic allies, as trusted partners, and with this we can also deal with challenges other countries and the broader geopolitical situation is posing.
MODERATOR: Thank you very much indeed. Next question, Matt Lee from AP. The mike is coming.
QUESTION: Thank you. Good morning, everyone. I’m going to apologize in advance for asking a very, very basic question that is going to betray probably my ignorance on these topics that you guys are discussing, and that is you all have been at this for two and a half years now. There don’t seem to – you don’t seem to have produced any kind of a serious result. I mean, yes, there’s a lot of dialogue and a lot of talk, but just on Monday the U.S. and the UK signed a bilateral AI safety agreement. What is the hurdle to reaching one in – between the U.S. and the EU? And if and when something like that is agreed upon, can you point to what would be a tangible benefit for Americans and Europeans from that?
And then Secretary Blinken, I have to ask you about – just briefly on Gaza, and that is whether or not the steps that Prime Minister Netanyahu’s office announced earlier today opening the new – opening the new border crossings – are enough to meet the demands that – or the demands that you put on the government to improve conditions? And do you still need to see – or do you still need to see more at least in terms of protection of civilians and aid workers? Thank you.
SECRETARY RAIMONDO: I would say if you look at where the U.S. and the EU were three years ago with respect to our collaboration on issues of technology and trade, it’s nearly night and day from when the Biden administration began until today, and the TTC has played a core role in that in the way that we have managed trade irritants. Let’s remember when we started this administration, we had 232 steel and aluminum tariffs, and that issue has been resolved among other issues. It resulted in an – the speed with which the U.S. and the Europeans got together after the war broke out to lead a coalition of 36 countries to level export controls against Russia was in large part due to the collaboration of the TTC.
Yesterday we announced the conclusion of our work as it relates to job training for tech workers because of AI. So I think at a high level the TTC has been indeed very successful in bringing our two – at bringing our partnership together. By the way, we share the largest and most sophisticated trade relationship in the world, and to have that strong collaboration underpinning that is vital.
With respect to AI, I’ve traveled to this TTC with the new head of the U.S. AI Safety Institute. She’s been on – she’s been on the job for six weeks and she’s here in Europe. We’ve already launched a dialogue with the EU AI office. So that is again a result of TTC and we will continue. We will continue to do that work. So there is so much more to do. As I just said, technology and the use of emerging technology has changed the game totally in economic security, in national security. AI is changing the game again for everything and AI collaboration between their office and our Safety Institute is strong, will get stronger, all led by the TTC.
MS VESTAGER: Well, I love that kind of question because it allows me to talk for an hour and a half about all we have achieved. But inspired by Gina being so succinct, of course, I will have to limit myself.
One of the first things we did in the first TTC was to align on how we view artificial intelligence, to agree on an approach of being risk-based, so not to approach the technology as the technology as such, and since we got started, oh my God, it has developed, but to look at the use cases. It is a risky use case or a non-risky use case? And I think that has shaped the approach from the very first day.
We have had the AI roadmap that has been developed in order to put this understanding into something solid, and the most recent thing is the dialogue that we both think will lead to something much more tangible when it comes to the cooperation between the U.S. Safety Institute and our AI office. And I think it’s a great thing that we forged these collaborations, both with the UK and the U.S., eventually probably also us with the UK. What we are starting here is something that we consider to be somewhat broader in scope because it is not just testing, it’s also everything that comes with it – so benchmarks, methodologies, how to understand, interpret regulatory approaches in both jurisdictions. So we embody on something that is larger.
And the second thing, which has a lot to do with artificial intelligence, is of course the work done on semiconductors. And here, from the very first day, focusing on why did we have the shortage. From that understanding, building an early warning system, we have used that when export control was levied against us, for instance, on uranium, and what was the second thing? Well, never mind. And now we have just renewed the working arrangements on semiconductors and we are taking the next steps when it comes into legacy semiconductors, what they call essential chips, which will remain with us with the cutting edge for decades to come.
So it’s just to say that the results are tangible, and I think one of the good things for citizens is that where we in the beginning diverged on platform regulation, we are now in a much more collaborative manner. When it comes to AI we have had an agreed approach from the very first time, and I think that the likelihood that that will produce artificial intelligence that you can trust is so much bigger because artificial intelligence hold immense promise if the negative sides can be controlled. And for me, an obvious negative side is sort of the existential threat for the individual as of today, if you are not allowed into university because of your color or your background, if you do not get a mortgage because of AI not recognizing you – all of that we can deal with, and I think that has very tangible effects on everyday life.
SECRETARY BLINKEN: Matt, to your question on Gaza, we welcome the steps that have been announced by Israel – opening Erez as a new crossing point, having shipments go directly from the Ashdod port, maximizing the route from Jordan. These are positive developments, but the real test is results, and that’s what we’re looking to see in the coming days and in the coming weeks.
Is the aid effectively reaching people who need it throughout Gaza? Are the bottlenecks and other delays at crossings being resolved? Do we have a much better system for deconfliction and coordination so that the humanitarian workers, the folks who are delivering the aid, can do it safely and securely? All of these things are critical and that needs to again really be measured by the results. And some of the measures that we are looking to include things like the number of trucks that are actually getting in on a sustained basis, and not just getting in but then getting around, the aid being distributed throughout Gaza, including critically northern Gaza. Some of the measurements that we’ve been deeply concerned by, including the fact that almost 100 percent of the population is acutely food insecure, that there are indicators of potential famine, we’ll be looking closely at those to see that they’re reversed.
So really, the proof is in the results, and we’ll see those unfold in the coming days, in the coming weeks. Relatedly, it’s also critical that we see an independent, thorough, and fully publicized investigation into the killing of the World Central Kitchen team who were performing heroic work under the most difficult circumstances in trying to get assistance to people who so desperately need it. So we’re looking to see that investigation, we’re looking to see a public accounting, and we’re looking to see accountability in its wake.
And this goes to a larger challenge that we’ve seen throughout, which is the horrific number of children, women, men – innocent children, women, and men – who have been killed through the course of the military operations. We’ve talked about this many times. The unique challenge of dealing with an enemy that embeds itself with the civilian population, that hides behind them, underneath them, in tunnels, in mosques, in schools, apartment buildings. But Israel’s obligation, its responsibility, to maximize protection for civilians, to make that a priority, that too is a critical test.
So what we’re looking to see in the days and weeks ahead is prioritization, surging humanitarian assistance, sustaining it and getting it to people who need it, making sure that those who are providing it are safe and secure, and maximizing every effort to protect civilians – those who are caught in this crossfire of Hamas’ making. We just can’t have so many people caught in that crossfire, killed, injured going forward.
MODERATOR: Thank you very much. I think we have time for one last question. Kim, please.
QUESTION: Thank you. Kim Mackrael from The Wall Street Journal. For Secretary Raimondo, I’m hoping to ask you specifically about semiconductor-related export controls. What more would you like to see from partners in Europe, from the European Union, individual European countries, when it comes to export controls related to semiconductors? Are you asking for anything in addition to what’s been discussed so far? And can you speak to what led to the concern, what sorts of concerns led you to turn your focus to legacy chips in particular as opposed to the focus on cutting-edge chips?
And for Secretary Blinken, NATO foreign ministers talked this week about a proposal for a five-year fund totaling about $100 billion to support Ukraine’s military. What do you think of that plan, and in particular what do you think about the idea of committing money over an extended period of time toward this? Thank you.
SECRETARY RAIMONDO: So on semiconductors, as we all know, semiconductors underpin our entire economy and that will be increasingly the case as we move into an age of artificial intelligence. All artificial intelligence is built upon the foundation of semiconductors – advanced chips but chips. So the watch word that we have when it comes to semiconductor export controls is vigilance, and what I’m looking for, and which is what we have with our European partners, is constant dialogue and vigilance.
The Chinese wake up every day trying to figure out how to do an end run around our export controls so that they and potentially their military can access our most sophisticated technology including chips, which means we have to wake up every day just as motivated to protect the citizens of our country, and we do that in collaboration with our partners, in this case the Europeans.
So I’m pleased with where we are, but it is – there’s no end game. It is a constant work. And every time we see any sort of diversion, we need our allies to work with us to crack down on the diversion, to enforce, to share information, and to be more thoughtful about our approach.
With respect to legacy chips, we know China is extremely focused on these more mature chips. I should say legacy is probably not great branding. Now, I’m not sure that I would want to be known as a mature and a legacy. (Laughter.) The truth of it is these are real – they’re feature-rich. They’re like the workhorse semiconductor chips. They’re in cars, this microphone, all of your household appliances, medical devices – every pacemaker, everything. That’s the quote/unquote legacy chip.
We know that based on China’s own reporting, about 60 percent of all new quote/unquote legacy chips coming to the market in the next handful of years will be produced by China, and we know there is a massive subsidization of that industry on behalf of the Chinese Government which could lead to huge market distortion, and so that’s why we’re focused on it. And in this regard too, this is another example to your colleague’s question of TTC success. We in the United States at the Commerce Department launched a Defense Production Act survey. It’s compulsory. We’re trying to collect data in the market to find evidence of any kind of market distortion. And the Europeans have also launched their own version of a similar survey, and we plan to share that data – we talked about that this morning – and act together.
So – and Tony said it beautifully. We have half of the world’s GDP between the U.S. and EU. When we act together against any kind of market distortion, whether it’s from China or anyone else, legacy chips or anything else, we’re that much more effective. So that’s why we’re focused on it.
SECRETARY BLINKEN: And with regard to Ukraine, I think there are two things to focus on here. First is the urgent, and the urgent is making sure that Ukraine gets what it needs now to deal with the ongoing Russian aggression. And there we had a lot of focus during the NATO meetings over the last couple of days on the efforts that we’re all engaged in to make sure that that happens, that they have the munitions, that they have the artillery, that they have the air defense systems they need, as well as the funding that goes with that.
For the United States, that means the urgent necessity of passing the President’s supplementary budget request. This is the most urgent thing that we can do. And it bears repeating it’s profoundly in the U.S. national interest to do it, because even if there’s an aggression against Ukraine and against its people, there is also an aggression against the basic principles that underlie the international system and that help promote peace and stability around the world, principles like you can’t simply go in and redraw the borders of your neighboring country by force or take it over or try to dictate its future. Because if we let that go unchecked, then it’s going to be open season for would-be aggressors anywhere around the world, and that’s going to be bad for the United States.
But second, the money that is in the supplemental budget request, virtually all of it when it comes to support for Ukraine’s military, is going to be spent in the United States, which will build up our own defense industrial base and provide more good jobs for our workers. Europeans have made similar investments, and again I want to underscore something we’ve said from the outset. When it comes to burden sharing, something that has long been discussed and debated in various challenges around the world, when it comes to Ukraine this is probably the best example of burden sharing that we’ve seen. For everything the United States has done, and it’s been significant, our partners in Europe and beyond have done even more in terms of military support, economic support, humanitarian assistance, caring for refugees, you name it. So that’s one piece.
The second piece, though, is the longer term. And here the question is: How can we make sure that Ukraine is able to develop over the coming years a military that can be an effective deterrent against future aggression and can defend Ukraine if that aggression comes nonetheless, and as well how can we make sure that Ukraine stands strong economically with more private-sector investment going in, and democratically as it moves towards the EU and undertakes the necessary reform.
For the military piece, we have 30 countries now that are negotiating or have already negotiated bilateral agreements with Ukraine to help them build this future force. Some of those will come with some funding. Similarly, we’re looking at NATO – and this is what we’ll be doing at the NATO summit in July in Washington – at NATO’s role in helping Ukraine build this future force, which also will be critical for its eventual membership in NATO.
Now, how all of this is funded through which mechanisms and by whom, all of that is being very actively discussed and we’ll continue those discussions as we head into the NATO summit. But the bottom line is, yes, it’s good to have a sustained source of funding, and when divided among so many countries over time it’s significantly less than the monies that we’ve had to put in on an emergency basis these past two years, and it will get Ukraine to a point in the coming years where it will stand strongly on its own two feet military, economically, democratically. That’s the goal. That’s the best possible answer to Putin’s aggression.
MODERATOR: Thank you very muchly. This concludes our press conference. Thank you very much for coming.