A post-Brexit trade agreement must look to a digital future

The global digital economy is growing at an unprecedented pace. Cumulative data predicts that global e-commerce sales will reach $4.5 trillion by 2021, and the UK was the third largest market in the world by e-commerce sales last year. It is in this context that a future UK-EU trade agreement must look forward towards the digital revolution.

However, it is clear to me as a Coordinator for the European Parliament’s international trade committee that the current trade and investment framework is yet to catch up. Digital trade and data flows are not simply nuances in the negotiation of trade agreements, but fundamental factors that are transforming the way we build trade relationships. It follows that Brexit is a key opportunity to shape how we can better integrate digitisation into our future trade agreements.

In 2017, I followed a report on the role of digital trade in EU trade agreements. The report sought to highlight some of the fundamental issues that lay at the heart of the digital trade agenda, such as intellectual property protection, prevention of localisation requirements and data privacy. For too long the Commission has made public declarations about the need to address these hindrances to trade, with little action to back up their words. Whilst the European Parliament adopted this report in December 2017, I hope its recommendations will form a central tenet of the Commission’s future trade policy. In particular, three aspects of this report have important implications for Brexit; the flow of data, access to digital infrastructure across borders and the protection of consumer interests.

First, cross-border data flows are at the heart of the global digital economy. The Big Data sector is growing by 40% each year and transforming how we do business, use services and consume products from all over the world. The European Parliament’s digital trade strategy report advocates the free flow of data, to the extent that it even stops member countries from forcing private companies that operate within their borders to set up their own data centres in order to do business. As the UK withdraws from the EU, it is crucial that cross-border data flows continue to enable businesses and consumers to operate as normal. After all, data flows are intrinsic to the overall growth of the digital economy and to the maintenance of security across borders. It is imperative that whilst data protection and intellectual property rights are upheld to the highest standard, this is done within a framework of maintaining the free flow of data post-Brexit.

Second, access to digital infrastructure across borders is essential for fostering competition and growth. UK and European businesses alike must be able to access digital infrastructure in the countries in which they operate, to avoid facing unnecessary regulatory burdens. Moreover, as both the UK and EU look towards the rollout of 5G mobile technology, and continue to support the growth in usage of Big Data and cloud computing, Brexit provides the opportunity to lay down transparent digital access rules. This would allow businesses, especially network operators, to work as effectively as possible on both sides of the channel.

Third, a successful digital trade strategy is only as good as its ability to protect the interests of consumers. The European Commission found that just 38% of EU consumers have felt confident about purchasing from a retailer in another member state and a shocking 7% of SMEs in the EU sell cross-border. This simply should not be the case, and Brexit provides the chance to place consumer interests at the heart of the digital economy. A future UK-EU trade agreement must stipulate clear rules for e-commerce that businesses and consumers alike can trust, whilst also promoting cross-border competition to allow the digital economy to flourish.

These three areas – continued data flows, cross-border access to digital infrastructure, and consumer interests – are of fundamental importance to Britain’s future trading relationship with the EU. The key now is to ensure that transparent regulations protecting citizen’s rights are balanced with a digital trade strategy that embraces the potential of the digital revolution.

© Copyright Emma McClarkin
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