Resetting Transatlantic Digital Cooperation Matters More Than French-Australian Submarines



Daniel Castro and Nigel Cory | Information Technology & Innovation Foundation

France has declared a “crisis of trust” in the United States after Australia scuttled a previous deal to buy diesel-electric submarines from France in favor of nuclear-powered ones from the United States. In reaction, President Macron recalled France’s ambassador to the United States and canceled a Washington gala. In a show of solidarity with France, some EU officials are suggesting that the planned launch of the EU-U.S. Trade and Technology Council (TTC) in Pittsburgh on September 29 should be postponed as well. Such a move would be a mistake, one that hurts EU interests. Instead, the EU should keep its eye on the strategic goal of using the TTC to foster closer collaboration with the United States on bilateral and global digital policy.

While France may be the odd-man-out in the submarine deal, it should recognize that this has nothing to do with a weakened U.S. commitment to transatlantic relations and more to do with its primary focus on balancing and containing China’s growing influence. Along with most EU member states, France has shown an unwillingness to take on China, preferring to forge politically appetizing economic agreements with China even if they come at the expense of long-term strategic interests. 

While the Europeans might defend their approach to China by arguing they want to maintain strategic autonomy, the reality is that on many digital issues, they treat China like a preferred partner while giving the cold shoulder to the United States. The clearest example of this has been in the EU’s approach to digital policy. The EU has launched multiple efforts aimed at the United States, its close ally and partner, from attempting to build a European cloud to counter U.S. cloud providers to repeated attacks on successful U.S. tech companies through new tax, data protection, and competition policies. Most galling of all is the EU’s resistance to the transfer of European personal data to the United States, claiming that the U.S. government is an untrustworthy partner—despite U.S. intelligence agencies supporting counter-terrorism activity in Europe—while seemingly ignoring the risk presented by the Chinese government by not scrutinizing data transfers to China Never mind how the EU overlooks the surveillance activities of its own member states. 

Europe loves seeing itself as a global regulatory superpower when it comes to digital policy. Yet, the EU’s actual impact on global digital regulations—whether on data protection, AI, cybersecurity, or digital markets—will inevitably be limited if it fails to work with like-minded partners to embed its values and approaches in a larger part of the global digital economy. As much as it may try, it can’t enforce its regulations on everyone, certainly not on China. Pragmatic cooperation with the United States (and other like-minded partners) is a way to extend its strategic influence and promote its interests and values. The contrast with digital authoritarian and protectionist countries could not be clearer in terms of what other values and rules may fill the vacuum in the absence of global leadership. 

While some EU officials have stated that they do not want the TTC to focus on confronting China, ignoring the challenge posed by China’s rise is both impractical and imprudent. From AI to supply chains to intellectual property to 5G to cybersecurity, digital trade and technology policy will be heavily shaped by China’s actions and ambitions. Thankfully some EU member states, like Denmark, recognize what’s at stake and remain committed to transatlantic cooperation. Both U.S. and European strategic interests require limiting Chinese innovation mercantilism and digital authoritarianism—when the EU does not work with the United States on this goal, it should not be surprising to see the U.S. government focus attention on other allies and partners who want to build this multilateral coalition. Hopefully, other EU member states, and the European Commission, put France’s emotions to one side and get back to focusing on the region’s interests. As the great French leader Charles de Gaulle stated, “no nation has friends, only interests.” It is in the interest of France and the EU to work with the United States on the TTC. 

Daniel Castro is vice president at the Information Technology and Innovation Foundation (ITIF) and director of ITIF’s Center for Data Innovation.

Nigel Cory is an associate director covering trade policy at the Information Technology and Innovation Foundation. He focuses on cross-border data flows, data governance, intellectual property, and how they each relate to digital trade and the broader digital economy.

To read the full commentary from the Information Technology & Innovation Foundation, please click here.