Bridging the Transatlantic Digital Divide

If the European Union (EU) and the US could agree on standards for data privacy and protection, they would take a giant step towards setting the global standard for digital trade. But despite ongoing efforts to find common ground reaching such a deal has proven elusive.

Further complicating matters is the fact that international efforts to establish regulatory standards at the World Trade Organization (WTO) have foundered, not least due to US disengagement. WTO members have struggled to agree on a framework of rules for electric commerce. Agreement among more than 80 members was reached in July on a myriad of important transactional rules for electronic commerce, but many key players including the US pulled out of the deal at the last minute. Moreover, serious differences remain on the critically important issues of cross border data flows, data localization and forced transfer of source code.

The result is that the status quo of uncertainty has prevailed. For businesses, large and small across the world this is a problem. Tech companies largely accept the need for regulation. Their worries center on whether rules may be too onerous and whether disparate regimes create regulatory fragmentation. Different approaches to tech regulation mean companies must adapt to a glut of different regulations, reducing efficiency and productivity and perhaps sowing the seeds of intense legal clashes with government regulators.

Since the beginning of the year, the Konrad-Adenauer-Stiftung and the Wilson Center have analyzed the issue of trans-Atlantic cooperation on digital regulation and have examined possible approaches which might narrow policy gaps in the positions of these two critically important economic partners.

These efforts culminated in a dialogue at the margins of the 2024 WTO Public Forum in Geneva at which business leaders, academics, delegates from WTO Members and representatives from international organizations debated the question and proposed possible ways forward. All agreed that the current situation is untenable and unsustainable. All agreed that the issue is highly complex and that finding the right balance between regulatory oversight and nurturing innovation was a tricky undertaking. All agreed that international cooperation was essential.

But there was much on which the participants did not agree including the extent to which regulatory regimes should be aligned, which international organizations should lead the efforts at finding agreement and even whether the US and EU were the right actors to be leading these efforts.

You can download the full report here.