The US and the EU are discussing a potential free trade-style deal around clean technology to lift all and avoid trade rivalry. This article explores the details and implications of the potential deal.
The Potential for a Clean Tech Free Trade Deal between the US and EU
The US and the European Union (EU) are reportedly in discussions for a free trade-style deal surrounding clean technology, according to Jennifer Granholm, the US Energy Secretary. In an interview with the Financial Times, Granholm emphasized the desire to avoid trade rivalry and to develop a mutually beneficial arrangement. The potential deal could help to reverse decades of deindustrialization in the US and reduce dependence on China.
Granholm stated that the US is seeking to establish a “backbone” of manufacturing in the country, which could help to increase job opportunities, enhance economic growth, and boost the clean energy sector. The potential trade deal with the EU could facilitate the exchange of ideas and technologies to further advance the development and deployment of clean energy solutions.
EU’s Green Energy Subsidy Package
The European Commission recently announced that businesses in the EU can receive government funding equivalent to the subsidies provided by the US’s green energy package. The package, worth $2.3 trillion, was introduced by the Biden administration in March 2021, aiming to boost the US’s clean energy sector while also creating jobs. The EU’s announcement signifies a desire to strengthen the clean energy industry in Europe and remain competitive globally.
Implications of the Clean Tech Free Trade Deal
A free trade-style deal surrounding clean technology between the US and EU could have numerous implications for both parties involved. For instance, the EU is currently implementing its “Fit for 55” policy package, aiming to reduce carbon emissions by 55% by 2030. The deal with the US could provide an opportunity for the EU to accelerate the implementation of the policy, especially through the adoption of innovative clean energy technologies.
Moreover, the deal could help to establish the US as a leading player in the clean energy sector while simultaneously reducing dependence on China. China currently dominates the global market for clean energy technology, which has caused concerns about potential supply chain risks and national security issues. The proposed deal could potentially help to mitigate these concerns by providing an alternative source for the development and manufacturing of clean energy technologies.
A potential free trade-style deal surrounding clean technology between the US and EU could have numerous benefits for both parties involved. It could help to enhance economic growth, create jobs, and advance the development and deployment of innovative clean energy solutions. Moreover, it could reduce dependence on China and establish the US and EU as leading players in the clean energy industry. As the discussions continue, it will be interesting to see how the negotiations progress and what implications the deal may have for the future of the clean energy sector.