EU-US Summit Is an Opportunity to Re-Establish Trust in the Transatlantic Relationship

posted by in Global Markets March 26, 2014
Mar 26

Today’s EU-US Summit in Brussels, at which President Obama will join his European counterparts, Herman Van Rompuy, President of the European Council, and José Manuel Barroso, President of the European Commission, provides an important opportunity to reinforce EU-US economic ties. A strong transatlantic partnership will send a message to global markets that the greatest prospects for economic growth and development lie in keeping borders open to data flows and preventing mandates on where servers and other computing infrastructure are located.

The commercial relationship between Europe and the US is the most significant in the world. Yet events this past year have strained this bond, in particular revelations about US government access to data. As a result, some European policymakers have argued the EU should retreat from its strong economic ties with America, calling for suspension of the Safe Harbor mechanism that facilitates cross-border data flows, requesting servers to be located geographically within Europe, even pushing for European IT independence. Concerns about government access to data are valid and should be the subject of continued dialogue between the US, EU and other governments. But they cannot be used as an excuse to create commercial barriers to data flows that will impede a critical foundation of the transatlantic economy.

Such measures would have an immediate and very negative impact; most importantly, cordoning off European companies and consumers from the rest of the world. In a globally networked economy, this would be dangerously disruptive and ultimately self-defeating. It would slow innovation and growth – a counterproductive result for both economies.

Eurostat this week released a report that finds the US was Europe’s largest trading partner in 2013, with, perhaps surprisingly, a trade surplus in Europe’s favor of €92 billion last year. This is equally true in the ICT sector where Europe enjoyed a surplus of €2.7 billion in trade of computer and information services. Clearly, an open market for transatlantic commerce, including for digital services, is of massive economic benefit to Europe and the US alike. On the contrary, walling off data behind European borders would be both futile and ill-advised. No economy will grow as fast in isolation as it will if it is connected to others.

The Transatlantic Trade & Investment Partnership (TTIP) is an opportunity to begin to enshrine these principles in order to prevent digital products and services being undercut by a harmful new wave of digital protectionism. And today’s Summit is a fitting occasion to demonstrate a cohesive transatlantic front in that regard.

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