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Europe’s Global Trade Leadership Stops at the Digital Economy


(Evangelos Razis via The Hill)

You could be forgiven for believing that the European Union is the new standard-bearer of global free trade. Brussels vowed to keep the “flag of free trade waving high” last year when it secured a landmark agreement with Japan.

Since then, it has pursued an ambitious trade agenda. The European Union now aims to conclude deals with Mexico and South America and to establish a multilateral court to replace investor-state dispute settlement. But recent headlines obscure the limits of its commitment to free trade.

When it comes to the digital economy, the chief export out of Brussels is regulation. It champions red tape over open markets. The problem is the European Union’s stance on data flows. Data defines today’s digital economy, and companies in all sectors transfer data across borders to engage in international commerce on a daily basis.

Government restrictions on international flows of data are the non-tariff barriers of the 21st century. China, Russia, Vietnam and others have learned to use tactics like forced data localization to protect domestic industries, strongarm foreign investment, and control the flow of information. Click here to read more.