EU and US negotiators have come to the table in Brussels this week to continue discussions on a Transatlantic Trade and Investment Partnership (TTIP).
No one ever said negotiating trade agreements was easy. But if these two countries act now, the benefits will be far reaching.
TTIP was envisioned as an ambitious opportunity for the US and EU – two of the world’s most important economies – to simplify and grow trade and business opportunities between their two markets. One study commissioned by the European Commission projects that TTIP could result in an increase of €119 billion in EU GDP and €95 billion in the US, and increase global income by almost €100 billion by 2027.
Yet, there was always more to this agreement than the potential economic gains.
TTIP was also intended to set the standard for what trade agreements should look like in the 21st century – to set a high bar for future trade rules that reflect the modern economy. That’s why BSA has consistently argued that TTIP must include rules to enable digital trade.
Software innovation is no longer just about technology companies. Today, companies across every sector are using data tools – enabled by software – to transform their businesses, from transport to healthcare to manufacturing to finance. At Davos last month, we heard time and time again, “Every company is a software company.”
Yet still we are seeing a trend toward protectionist regulations which threaten this kind of innovation.
Countries like Brazil, Korea, and China have adopted or proposed rules that either prohibit or significantly restrict companies from transferring data outside their territories. Others, such as Indonesia and Vietnam, are requiring companies to put servers inside their borders if they want to do business there – a proposal also floated by some policymakers in Europe.
These kinds of policies undermine the ability of companies to leverage the global digital ecosystem, and they slow down job creation and economic growth. In today’s economy, enterprises of every kind rely on software and data tools to do business. That’s why it is so important that we modernize trade rules now to ensure that data can flow freely, without undue barriers or regulatory impediments.
TTIP is an opportunity to do that. First, by fully covering innovative services such as cloud computing. Second, by letting data flow across borders without unnecessary restrictions. And third, by preventing government mandates on where servers and other computing infrastructure must be located.
We should not overlook that while TTIP has struggled to find its feet, another major treaty has been gaining pace. Many believe the Trans-Pacific Partnership (TPP) could be agreed within months, and beat TTIP to the punch in writing the global template for trade rules in the modern economy.
More than ever, Europe and the US should seize the opportunity to foster digital trade through modern, 21st century trade rules, and allow data innovation to continue changing the world for the better.