Jamieson Greer on Not Getting Fooled by Discriminatory EU Tech Regulations

At a Hudson Institute event earlier this week, U.S. Trade Rep. Jamieson Greer had the following exchange with Peter Rough of Hudson on EU digital regulations:

Rough: The joint statement last August with the Europeans filling out the Turnberry agreement that the President struck with Commission President von der Leyen said that "the United States and the European Union commit to addressing unjustified digital trade barriers." Then came the European DMA investigation announcement into cloud computing, among other steps that led to a mid-December tweet viewed around the world from your office expressing some dissatisfaction with the EU and EU member states on "a continuing course of discriminatory and harassing lawsuits, taxes, fines and directives against U.S. service providers." Where do we stand now that we are sitting here in almost mid-April on digital trade between the U.S. and the EU?

Greer: I would say that this is a fragile issue. So in the Turnberry agreement, where it talks about, what was the wording again?

Rough: "The United States and the European Union commit to address unjustified digital trade barriers."

Greer: Unjustified digital trade barriers. So that means something different to me than it does to [the EU Ambassador] or to others in the Commission, which is a problem. This is a big issue. We have a situation where U.S. companies who are large tech companies, and that is the nature of how they have developed, who offer essentially free services, many of them to EU citizens at the retail level, and then offer a lot of productivity gains at the enterprise level to businesses in Europe. This is a huge productivity gain and welfare gain for Europe. They have introduced laws like the Digital Markets Act and other laws that don't even think about consumer welfare, they just make a prima facie decision that bigger is bad, and therefore we're going to take action. And it's a huge problem. It disproportionately affects U.S. companies.

There's a set of talking points that every European Ambassador comes in with, and they just say, "Well, this is not discriminatory, it applies to everybody equally." Yeah, but only if they make above a certain amount globally, etc, and have business models that happen to track U.S. company business models. So you know, we're not fooled by any of that. I keep telling these European officials, we're not fooled. You can give us these talking points, and we still won't be fooled. And so we're very concerned about this. We are having discussions with the European Commission, I would say, really, for the first time ever on DMA, we've always been stonewalled. ... Steve Forbes put out an op-ed today saying, Jamieson, just move forward with the Section 301. Do it now.

So there's a lot of pressure out there to take action. Obviously, our goal is to have an outcome where U.S. companies can operate without discrimination. They can operate as freely as European companies do here in the United States. And if American companies don't have that opportunity, then we will control European service providers in the United States.

I would like to hear more from Jamieson on how he sees the standard for non-discrimination. Is he saying that any disparate impact on U.S. tech companies is sufficient for a determination that regulations are discriminatory? If so, that's a very broad approach to international governance of domestic regulations, one that limits policy space/regulatory autonomy/sovereignty considerably. And if it were applied to, say, certain U.S. environmental laws and regulations it could have a significant impact on the ability to regulate.

Or is he saying that there is something in particular about the design and structure of the DMA (and other European tech regulations) that suggests the law favors European companies over their American competitors? If he would look for something more than just disparate impact in relation to the design and structure, what would he be looking for?

Or is it something else entirely? What exactly is the non-discrimination standard he has in mind?

Whatever he is saying, it is a significant departure from what we heard during the Biden administration from Katherine Tai, who emphasized the importance of understanding the intent of the foreign regulation ("we have to really be cognizant that measures that may look like they have a discriminatory effect may or may not be advanced with a discriminatory intent").

I'll have more to say on all this soon, but I'm just flagging it for now.