The Rise of Tech Standards Foreign Policy
Technical standard-setting is becoming geopolitical as a result of US-China technology competition. Yesterday, the European Commission unveiled its response – the European Standardization Strategy. The document looks promising in that it aims to preserve Europe’s successful bottom-up, industry-driven standard-setting approach, and complements it with a strategic top-down element. But its real-world success requires support from EU member states, not least Germany – Europe’s strongest standardization power.
Technology has never been apolitical. Technological advances have always been a source of national power and economic competitiveness. How technology is designed shapes societies, whether we are aware or not. But the break-neck pace of today’s digital development – coupled with the ongoing competition between the US and China in fields such as 5G, artificial intelligence or semiconductors – has made technological power an important front of ideological conflict, notably between authoritarianism and liberalism. Standard-setting for foundational and emerging technologies has become fraught with geopolitical conflict.
Europe is a world power in technical standards. These specifications for common use facilitate international trade and economic growth. They are also a form of private self-regulation by businesses. While they are legally non-binding, they carry significant power – permitting product compatibility, interoperability, and basic safety. Although Europeans are surrounded by technical standards, we hardly notice them and most of us are not familiar with the concept. One everyday example of a technical standard is the USB standard, which allows the exchange of data or charging for a wide variety of technical devices across countries and regardless of manufacturer.
The EU has remained wedded to its longstanding conception of standards as a public good that should remain technical and not be politicized, despite the US-China tech competition beginning as long as a decade ago. But EU leaders are waking up and now recognize that it matters whether authoritarian or democratic powers shape technical standard-setting and has direct implications for our privacy, be it in surveillance technology or internet protocols. The EU’s growing desire to promote its geostrategic aims and values resulted in yesterday’s European Standardization Strategy, which was first put on the agenda by the European Commission back in March 2020.
Go Strategic or Preserve a Strong System: The Central Dilemma for the New European Strategy
The European Commission’s dilemma has been how to strike a balance between adapting to the top-down geopolitical turn in international technical standard-setting and preserving the EU’s bottom-up private-public partnerships model. This model has long guaranteed a high technical quality and adequacy of European standard contributions, supporting the integration of the single market and helping Europe punch above its economic weight in international standardization organizations and global standard-setting. But it finds itself competing with a US model and China state-centric approach, neither of which are suitable for it.
This European system, in which government sets an overall framework but leaves the development of specific standards to experts from business and consumer organizations with little public involvement, contrasts particularly clearly with China’s top-heavy model. China’s approach on the other hand, is state-centric. In China, the most crucial standards are developed within national ministerial organizations and local governments (with business being involved) or in associations with strong party-state influence. The United States, for its part, has a much less structured, private sector driven system and, unlike the EU, it does nothing to prevent contradictory standards that compete on the market giving de facto standard-setting power to large powerful corporations.
China still lags behind the EU and the US, but over the last decade, has become a major standardization power. In October 2021, its party-state adopted a strategy to internationalize its own standards further. It has incentivized international standardization by means of favorable treatment, procurement, regulation, tax breaks, soft loans, export credits and subsidies. The US is far from such state interventionism but has adopted laws that pull financial resources into standardization to promote US strategic interests. In light of an uneven playing field in competition with Chinese state-led standardization and an increasingly strategic US policy, Europe’s influence has dwindled.
The Promise of the European Standardization Strategy
The European Standardization Strategy succeeds in creating a new strategic top-down element whilst preserving and even strengthening the EU model of bottom-up, privately-driven standardization. For example, under the European Standardization Strategy, the EU will set up a new high-level forum aimed at identifying standards conducive to Europe’s twin “green” and “digital” transition priorities. Alongside this forum of top European Commission officials and – ideally – member state economic ministers, the EU will also establish sub-groups of European standardization organizations, industry, consumer organizations, academia, and civil society. The purpose is not only to communicate strategic preferences top-down, but also to incorporate stakeholders’ experiences and concerns more systematically into strategic policy planning.
To achieve this balance, the European Commission is proposing amendments to the European regulation that governs the general framework for European standardization. If this regulation is changed along the lines set out in the European Standardization Strategy, EU-backed technical standards – so-called harmonized European Norms (hENs) – would fall within the exclusive purview of Europe’s National Standard Bodies (NSBs). To explain, hENs are technical standards developed by one of the three European Standardization Organizations (ESOs) that are in turn referenced in binding EU regulations. While not becoming de jure legally binding themselves, hENs carry enormous force because they represent the easiest and often cheapest way to comply with EU regulation.
The European Standardization Strategy would also blunt any undue influence of non-European actors in shaping technical standards that will form legally binding European regulations. Here, the focus is the three ESOs. Two of them, namely European Committee for Standardization (CEN) and European Committee for Electrotechnical Standardization (CENELEC), consist of NSBs and provide one vote to industry from each member state. However, the third – the European Telecommunications Standards Institute (ETSI) – grants voting power to NSBs and companies and weighs influence according to membership fees. This privileges large private sector actors. Strengthening NSBs would thus come at a cost to the Asian and American tech giants that currently hold significant voting power in ETSI.
Despite these improvements, the European Standardization Strategy comes with pitfalls. In contrast to the United States and China, the EU is not promising to allocate significant additional financial resources to standard-setting, even though these are needed. Currently, European industry is reducing rather than increasing its participation in international standard-setting due to financial constraints. Hence, the absence of additional public funding creates a clash between ambition and reality. The European Commission has, for instance, previously given support to suggestions to increase the impact of small and medium enterprises and civil society on EU standard-setting, but it has not mobilized the public funding necessary to make this engagement possible.
Similarly, the European Standardization Strategy remains vague as to how the European Commission intends to address the long-discussed acceleration of standardization in Europe. This means that publication of hENs – the last step for them to become effective – will remain slow and cumbersome. The role of so-called “harmonized standards (HAS) Consultants” is not even mentioned. These are external experts that are not part of NSBs or other institutions developing standards the European Commission employs to verify conformity of hENs with EU law before publication. They are currently the main hurdle to speedy publication of hENs.
But the biggest potential pitfall is the proposed EU excellence hub on standards. This hub could be of enormous benefit for Europe and would bring together technical expertise from all kinds of EU agencies, as well as the wider European standardization community. But the hub could too easily become the origin of a parallel system that ultimately undermines Europe’s prized public-private partnership model. This could be the case if the hub succumbs to a sort of “mission creep” – becoming an agency that develops a broad range of Commission-led “Common Specifications” to replace official European standards created by ESOs. This would to some extent mimic the Chinese state-led approach to standardization. Such an approach is unlikely to be successful for the EU – not least because the EU lacks the comprehensive control over economy, research, and innovation that the Chinese party-state possesses.
Now, Over to Germany
The EU’s capacity to influence international and global standard-setting is what really matters. And the prerequisite for the European Standardization Strategy’s success there is member state positioning and active support. After all, it is National Standard Setting Bodies – not European Standardization Organizations – that represent Europe in international standard-developing organizations. So, even as a more strategic EU approach requires greater European coordination, the ultimate power lies with the NSBs, and the member state agencies that oversee them, to drive that coordinated approach.
If the European Standardization Strategy pushes EU capitals to rethink the international strategic dimension of technical standards, it will be a significant achievement. From this perspective, the set-up envisaged by the European Standardization Strategy is smart: The high-level forum and the hub will lock each EU government into the strategic priorities set out by the European Commission or oblige it come up with an alternative list of strategic priorities.
But will it achieve this shift fast enough? First-mover advantage is widely accepted as a decisive factor for successful standardization, and Europe is already lagging behind the United States and China. The European Commission has brought the race to Europe. Now, it’s time for Germany, Europe’s principal standardization power, to follow.