Deepening Transatlantic Cooperation

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The Ukraine crisis is a stark reminder that the transatlantic alliance is as important today – as both a military and economic partnership – as it has ever been in the post-World War II-era.

What focuses the mind

But U.S.-European cooperation need not and should not be limited to immediate geopolitical crises. The renewed experience of standing together in the current confrontation with Russia should be a template for allied solidarity in the years ahead.

After all, Europe and the United States confront shared challenges posed by China, future pandemics and climate change.

The importance of innovation

Technological innovation holds the key for overcoming these challenges. Such an effort will be extremely costly and will require a broad range of scientific talent. To justify the endeavor, a sufficiently large end market will need for the technologies developed.

The private sector cannot do this alone. Europe and the United States need to seize the current moment of allied solidarity.

The goal is to commit limited public resources in support of pre-competitive research and development of a range of emerging technologies that then can be commercialized by European and American businesses.

The importance of cooperation

Only through such working together can governments on both sides of the Atlantic hope to overcome their shared existential challenges and develop the cutting-edge technologies so vitally needed for the 21st Century.

If the European Union and the United States are to be leaders in the creation of cutting-edge technologies, they must now join forces in limited new support for technological development.

The growing cost and complexity of technological innovation, the global diffusion of scientific talent, as well as the need for a large future market to justify massive investment give them few other options.

Long-time technological rivals

Europe and the United States have long been technological rivals. And both the U.S. and some European nations – notably Germany, Britain and more recently the Netherlands and Scandinavian governments – have been leery of excessive government intervention in the market economy.

But in the face of emerging challenges, there is new-found support for public private partnerships and transatlantic cooperation.

In 2021, Brussels and Washington launched a Trade and Technology Council (TTC) to coordinate approaches to key trade, economic and technology issues.

Meeting the technology imperatives facing societies

While a necessary initiative, the TTC falls far short of meeting the technology imperatives facing societies on both sides of the Atlantic and around the world.

To meet these needs, Europe and the United States should cooperate in pre-competitive research and development and testing on a range of new technologies.

This can be achieved through the creation of a Transatlantic Advanced Research Project Agency (TARPA), with designated funding streams for specific technologies.

DARPA as a model

TARPA can be modeled on the highly successful U.S. Defense Advanced Research Project Agency (DARPA). It has been instrumental over the years in developing the internet, GPS, the computer mouse and Apple’s voice-recognition system Siri, that were subsequently commercialized.

To maximize resources Washington and Brussels might consider creating a public-private technology venture fund that would use government funds to mobilize private investment in TARPA projects.

The global semiconductor shortage as a warning sign

The global semiconductor shortage exemplifies the most immediate technological challenge Washington and Brussels are facing. The shortfall has impacted everything from cars to cell phones, imperiling economic recovery on both sides of the Atlantic.

Recently, the United States government has invested approximately $1.5 billion annually in semiconductor-specific research, less than a third of what experts’ think is necessary.

In late July 2022 the U.S. Congress passed the Chips and Science Act, which includes $52 billion in federal investments for the domestic semiconductor research, design, and manufacturing.

Toward a “TARPA-C” for chips

Europe, for its part, produces only 10% of global semiconductor output. To double its share, Brussels has proposed its own EU Chips Act, with €3.3 billion in EU funds.

The chips of the future need to be smaller and denser. The estimated R&D cost of moving from a 10nm chip to a 5nm chip is $650 million, even before manufacturing, testing and packaging.

If European and American firms are to keep pace with Taiwanese, South Korean and, most importantly, Chinese chip makers, Brussels and Washington need to bring together their scientific talent and help shoulder some of the financial burden.

A Transatlantic Advanced Research Products Agency-Chip (TARPA-C) effort should be jointly created to conduct pre-competitive R&D for next generation chips.

A “testing commons”

At the same time, since testing new designs requires multi-million-dollar facilities, the EU and the Biden Administration should jointly create a “testing commons.”

This would allow both European and American firms to assess the feasibility and commercial potential of new materials and chip designs.

But the world currently faces myriad other technological challenges. And some, such as climate change, have even more dire implications.

Next: TARPA-B for batteries

Batteries are one of the key strategic components for the digital world, for modern manufacturing, for consumer products from cars to dishwashers and for dealing with climate change.

Small, powerful, rapidly rechargeable batteries are needed for these purposes. This field is currently dominated by Asian, especially Chinese, producers.

The European Union has already taken steps to increase its battery supply through the European Battery Alliance. This effort is supported by the European Commission and the European Investment Bank.

The United States, for its part, has created a Federal Consortium for Advanced Batteries.

Strong incentives

Washington and Brussels should take their efforts to the next level and create a Transatlantic Advanced Research Products Agency-Batteries (TARPA-B) to pursue joint pre-competitive research and development.

If this is not achieved, they both will have a replay of the current chip supply crisis and find themselves even more dependent on Asian battery production.

Focusing on global needs

But the world currently faces myriad other technological challenges that extend beyond the headline grabbing digital world. And some have even more dire implications.

Climate change threatens food production, especially in sub-Saharan Africa and South Asia, because of higher temperatures and water shortages.

This may pose a particular threat to the double and triple cropping that is currently necessary to produce sufficient foodstuffs in these regions.

Faced with feeding more people with less water and hotter temperatures, publicly funded agricultural R&D has stagnated in both Europe and the United States.

Heat tolerant food crops

For the sake of humanity, Washington and Brussels need to dramatically increase their investment in the development of less water-intensive, heat tolerant food crops.

Private seed companies, which cater to richer markets, cannot be counted on to make such investments that will primarily benefit poor farmers.

R&D to develop new varieties of wheat, corn, rice and other crops will require public money. This has been done before. In the mid-1940s, the Rockefeller Foundation created what became the International Center for Maize and Wheat Improvement with an initial grant of roughly $200,000.

In 1959, the Ford Foundations created the International Rice Research Institute with a grant of roughly $7.2 million.

These efforts led to the development of “miracle wheat and rice”, greatly enhancing yields, sparing millions from malnutrition and starvation.

Toward TARPA-A for agriculture

Today, the food-production challenge posed by climate change requires a similar effort backed by even greater resources and scientific talent.

This can best be accomplished by the EU and Washington pooling their efforts to fund a Transatlantic Advanced Research Products Agency-Agriculture (TARPAA). Its focus would be on developing new climate change resistant seeds that can produce in hot, dry conditions.

European and American agricultural R&D cooperation can also contribute to the shared imperative of slowing climate change.

Agriculture and greenhouse gas emissions

Agricultural activities contributed to about 10% of total U.S. greenhouse gas emissions in 2019. At the very least, something needs to be done to offset these emissions, and hopefully to help meet the urgent need for carbon sequestration.

In 2020, the U.S. Department of Agriculture announced a $10 million effort to measure the carbon-capture potential of its Conservation Reserve Program, a long-standing effort to preserve wetlands and other threatened land.

But both these efforts are largely aimed at better understanding the potential for soil carbon sequestration.

From 2017 to 2021, the European Union’s Horizon Project proved €2.4 billion for a Coordination of International Research Cooperation on Carbon Sequestration in Agriculture. It included a number of international research centers, including Colorado State University.

And the European Union has announced ambitious plans for agricultural carbon capture to sequester five million tons of CO2 from the atmosphere each year by 2030.

A transatlantic effort to improve carbon-sequestering

All these initiatives are steps in the right direction, but they are woefully inadequate. There is a need for a sustained transatlantic effort to enlist plant scientists to improve carbon-sequestering by major food crops.

The Salk Institute in California is working to develop roots with greater mass, depth, and decomposition-resistance to increase the carbon-storing capacity of wheat, rice, corn, soybeans and other foodstuffs.

The Institute hopes to be able to distribute seeds by 2030, with significant carbon reduction by 2035.

To advance that timeline, overcome inevitable problems and accelerate distribution Europe and the United States need to pool talent and resources in this and similar pre-competitive R&D efforts.

Yet another frontier: Global health

Finally, if the Covid pandemic has taught us anything, there is a pressing need to be better prepared for the inevitable pandemics of the future.

In the last two decades, the world has experienced SARS, MERS, Ebola, avian influenza, swine flu, Covid and now Monkeypox. Infectious diseases keep emerging, but drugs to treat them have been slow to reach the market.

One reason is that treatments for such illnesses have not promised the financial returns sought by Big Pharma. The McKinsey Global Institute estimates that as much as $83 billion needs to be spend on infectious disease R&D over the next decade.

Inadequate funding

Prior to the Covid outbreak, the European Commission’s average yearly funding for research into infectious diseases was only €21.5 million. The U.S, National Institutes of Health budgeted just $6.3 billion.

Much more public funding is needed to make the economics of producing new treatments work for drug makers, using the model that led to the development of Covid-19 vaccines.

The U.S. Operation Warp Speed invested more than $12 billion to create a market for Covid vaccines, while streamlining the testing and approval process.

Both were necessary and highly successful measures. What is needed to prepare for future infectious diseases is more governmental support for pre-competitive R&D and for governments to assure drug makers of a market if and when they develop new treatments.

Toward TARPA H, for health

In his 2022 State of the Union address, U.S. President Joe Biden proposed creation of an Advanced Research Projects Agency for Health (ARPA-H). Congress has yet to act on this proposal.

The European Union should suggest joining such an effort, with an initial focus on developing new pandemic vaccines. By pooling resources and scientific talent, ARPA-H will maximize the potential for developing life-saving therapeutics.

Such cooperation is already being pursued in the private sector. American druggiant Pfizer teamed with German BioNTech to develop a Covid-19 vaccine. But government’s role in funding basic research and assuring a market were critical in the effort.

Next generation therapeutics

But if there is any lesson to be learned from the Covid pandemic, it is that more pharmaceutical innovation is needed, faster. And such cooperation need not be limited to infectious diseases.

It could be expanded to include work on pre-competitive R&D on next generation therapeutics to deal with cancer, Alzheimer’s and other widely shared threats to human health.

Conclusion

A new era of transatlantic governmental engagement to bolster needed technology through joint support of pre-competitive research and development is desperately needed.

Given the growing cost and complexity of innovation and humanity’s pressing needs, even economies as large and as talented as Europe and the United States cannot, on their own, develop the technologies needed to combat climate change, to overcome future pandemics and to feed the hungry.

Americans, Europeans and citizens of the world need a new, more profound collaboration between Brussels and Washington to meet shared, emerging challenges. The need is great.The time is now.