First reaction to the Commission’s Trade Policy Review

DIGITALEUROPE welcomes today’s publication of the Trade Policy Review, and the European Commission’s commitment to an “Open, Sustainable and Assertive” trade policy in the years ahead. We are pleased to see that many of our recommendations to the public consultation on the Trade Policy Review have been reflected in the Commission’s approach.

The unique circumstances of the past year have highlighted the importance of resilient global value chains and the crucial role played by digital trade in mitigating the worst impacts of the Covid-19 pandemic. We agree wholeheartedly with the Commission’s core objective of ‘supporting the recovery and fundamental transformation of the EU economy in line with its green and digital objectives.’

Director General of DIGITALEUROPE, Cecilia Bonefeld-Dahl, said:

This Communication has sent a strong message that European trade policy will play its part in the green and digital transitions, and in defining rules and standards that will drive sustainable growth globally.

We particularly welcome the clear commitment to ensure coherence between Europe’s external and internal priorities, especially on digital transformation. While we must continue to boost resilience and competitiveness in critical technological areas such as batteries, microchips, AI, quantum, and cyber technologies, we cannot take this path alone. Trade policy has a crucial role in promoting European competitiveness both by ensuring alignment with like-minded countries and major trading partners, and by providing a forum for developing global rules for our shared digital future.

We agree that ‘addressing today’s challenges requires more rather than less global cooperation’. This Communication sets a clear way forward towards coordination on common challenges, from emerging technology to data flows. On the latter, we welcome the Commission’s intention to address unjustified obstacles to data flows while preserving EU data protection and privacy rules. Whether it be through bilateral cooperation – for example, through the EU-US Trade and Technology Council– or multilateral efforts where the WTO and G20 both have crucial parts to play, we are glad to see that “Open Strategic Autonomy” will be based on openness and engagement as a strategic choice: these should remain the golden rule.

European resilience will not be achieved by seeking autonomy, but by using all the tools at our disposal – from trade policy to our industrial strategy in an open competitive market – to make sure that we remain an attractive place to do business. This includes building capacity in Europe, and ensuring reciprocity and geographical balance in key global supply chains.

We look forward to continuing to work with the Commission and other stakeholders to further develop the “Open Strategic Autonomy” concept focused on resilience and an open market economy where complex global supply chains will continue to be the key characteristic.”

Snap analysis

While we have yet to delve into the details of the Communication, DIGITALEUROPE would like to draw attention to some of the most notable aspects of the Commission’s publication:

Taking the lead on digital trade

The Communication rightly notes that “supporting Europe’s digital transformation is a priority both in internal and external policies including trade policy and instruments” – we couldn’t agree more. Indeed, this works both ways: trade plays an essential part in driving digital transformation, through developing global rules, facilitating market access, and promoting a global environment that rewards innovation. However, we must also ensure policy coherence in such a way that our efforts to harness the green and digital transformations do not impede global trade, and rather instrumentalise it to sustainably boost Europe’s competitiveness in an open world economy.

In particular, we greatly appreciate the importance attached to the WTO initiative on eCommerce, and the opportunity it represents to develop global rules on data flows. The EU should indeed seek to address the inadequacies of multilateral governance on digital transformation. We hope that the Commission’s “assertive” approach in this regard can steer WTO partners towards a workable solution where cross-border data flows are facilitated without prejudice to privacy and data protection regulations. We agree that the digital trade chapter of the EU-UK TCA provides a good starting point, and we look forward to hearing more about the proposal for an analytical framework on data flows, and how it can help in this regard. DIGITALEUROPE also welcomes the commitment to further plurilateral agreements on digital trade, including work towards reflecting the “servicification” of trade in goods, and recall that in this regard, the WTO Information Technology Agreement also has a crucial part to play.

Facilitating global cooperation

The EU has an important role to play in driving a global digital agenda, and we welcome the ambition of the Commission in this regard. Our bilateral relations should be leveraged at multilateral level, and we are particularly pleased to see the recognition given to the unique scale and potential of the transatlantic relationship. The EU-US Trade and Technology Council will provide an excellent forum to develop joint approaches in trade policy and beyond that can drive our twin green and digital transitions, and DIGITALEUROPE stands ready to contribute to this conversation, building upon our position on relaunching the transatlantic agenda. This will be particularly important in addressing the implications of new digital technologies such as AI, through ambitious and truly global standards and rules.

Indeed, regulatory cooperation at bilateral level should leverage digital trade globally, especially when we work with like-minded countries and major trade partners to shape global rules. We look forward to working with the Commission to identify priority areas for such dialogue. Our global digital economy knows no borders, so all partners need to contribute to this discussion – Europe’s assertiveness should be about opening dialogue, not closing doors. Here, the WTO and the G20 are of special relevance – thus, the proposals to reform the former are an important signal, and we welcomed Executive Vice-President Dombrovskis’ intention to engage China on this issue.

This also extends to cooperation with the private sector – industry stakeholders face the day-to-day challenges of international trade, and have a unique ability to provide policymakers with solution-based advice. Thus, we applaud the commitment towards cooperation with the private sector, which has an importance that stretches far beyond the current crisis. A re-established Expert Group on Trade Agreements can complement the Civil Society Dialogue in bringing this idea to fruition, and DIGITALEUROPE also looks forward to contributing to this dialogue through a forthcoming paper on European International Digital Cooperation. Finally, we look forward to exchanging on the Trade Policy Review during a roundtable discussion to be held on 16 March.