Setting common guidelines for data flows is crucial both to protect the goods and services that already depend on big data and to support the next generation of productivity gains and business opportunities.
While trade and tax remain at the heart of the difficult economic conversations between Europe and the US, a new issue has emerged as a potential source of even greater friction: data.
Growth in the traditional global trade in goods and services has levelled off, but cross-border data flows continue to expand rapidly and the challenges of developing policies that protect privacy, security and innovation are already tremendous. For example, data analytics are driving dramatic productivity gains in industry, particularly for large and complex installations whose safety and efficiency will increasingly depend on flows of those data across jurisdictions. Meanwhile, ‘fintech’ (financial technology) start-ups and large banks alike are testing new modes of accumulating, analysing and deploying customer data to provide less expensive services and manage the risk profile of their businesses.
The rules that govern the collection, transmission and storage of data are perhaps one of the more surprising controversies in the transatlantic relationship. Similar liberal democracies with similar geostrategic interests might be expected to approach the handling of personal, corporate and government data in more or less the same way. And yet the US and its key European partners have struck different balances in the trade-offs between national security and citizens’ rights, between freedom of expression and personal privacy, and between free enterprise and market regulation.
While the US debate on the use of data has often been framed around the trade-off between national security and personal privacy, Europeans often face an even more complex set of concerns that include worries that their digital and technology firms lag behind dominant US competitors. The political and regulatory uncertainty helps neither side, and leaves transatlantic companies struggling to comply with uncertain and conflicting rules in different jurisdictions.
This makes more determined efforts by US and European policymakers to agree basic principles that will guide the usage and protection of personal and commercial data all the more important. While common regulations or even greater alignment among regulators seem out of reach, a ‘Transatlantic Charter for Data Security and Mobility’ would provide a set of principles for more specific rules amid political landscapes and technological developments that are evolving rapidly.
