BusinessEurope views on digital trade

Key messages

• Free cross border data flow along with adequate protection of personal data, intellectual property rights and trade secrets (“data flow with trust”) is key for the competitiveness of all companies, regardless of their size and sector of activity. In the absence of a multilateral framework on digital trade, growing regulatory divergence is taking place and resulting in the fragmentation of international digital markets. The proliferation of regulations is eroding the competitiveness of companies, especially of small and medium-sized companies, which have more difficulties to adapt to different digital regulatory frameworks. Europe accounts for more than half of global exports of digitally delivered services.
• The rules agreed in the digital trade chapter of the EU-UK Trade Cooperation Agreement (TCA) should represent the main reference in the negotiations of any trade agreement.
• Free cross border data flows, the prohibition of forced data localization and the prohibition of mandatory disclosure or transfer of source code and algorithms, together with the appropriate protection of personal data, represent the backbone of any digital agreement or chapter. Exceptions to this rule (or principle) must be limited to the necessary to ensure that they do not set international precedents in this area.
• Digital agreements or chapters should also include provisions related to the nondiscrimination of services or goods provided by electronic means, the prohibition of forced transfer of technology, trade facilitation (electronic contracts, electronic signatures), consumer protection and open government data and appropriate instruments to ensure technical interoperability and common standards. They could also lay the ground for an open digital architecture and a trustworthy digital ecosystem.
• The conclusion of the negotiations on the WTO-World Trade Organisation Joint Initiative on e-commerce and the extension of the Moratorium on Customs Duties on Electronic Transmissions should be a priority in the negotiation agenda of the European Commission.
• Bilateral trade agreements without relevant provisions on digital trade, should be reinforced with an appropriate digital trade agreement.
• Impact assessments of any European piece of legislation on digitalization must analyse the consequences of such initiatives on trade and investments, as well as on the competitiveness of European businesses outside the EU.
• Regulatory convergence must be partnered with efforts to improve interoperability and pave the way to private investments in digital infrastructure to reduce the digital divide. The ‘Global Gateway’ must be used to help adopting adequate regulatory frameworks to incentivize the mobilization of private investments needed to expand safe and accessible internet coverage for all. Joint initiatives with other countries are encouraged to increase the impact of such projects.
• A timely and more extended stakeholder participation is key to develop ambitious and clear legislation in the digital trade sphere.

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