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The EU-US Trade and Technology Council Discussions and the Struggle to Strike a Deal on International Data Transfers

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After the United States’ recent diplomatic faux pas with France, the first EU-US Trade and Technology Council, held on September 29th in Pittsburgh, should help bring transatlantic relationships back to normal. The main purpose of the meeting was to find common positions on critical issues related to global trade and emerging technologies. However, it seems that the thorny issue of data transfers between Europe and the United States is still far from being finalized.

The Pittsburgh meeting has certainly been an important turning point in relations between the European Union and the United States. The topics discussed, from foreign investments to export control, artificial intelligence and semiconductors, are of the utmost importance.

The latter is perhaps the hottest topic of the moment: supply chain disruption and growing tensions on the markets have recently put in crisis the technology industry on both sides of the Atlantic Ocean. Semiconductors are indispensable for producing microchips, essential for every electronic device, from supercomputers to simple vacuum cleaners. Taiwan and China dominate the sector with almost monopolistic market shares; consequently, both the US and EU have adopted policy proposals to increase domestic production.

The most conspicuous absence seems to be the negotiation on the flow of data between the two sides of the Atlantic. In July 2020, the Court of Justice of the European Union ruled that the previous agreement, the so-called “Privacy Shield”, did not offer sufficient protection for EU data because of US surveillance laws.

Whilst negotiations to reach a new treaty have started, for the moment, a deal does not seem to be close. Not surprisingly, the US administration is eager to discuss a new agreement, which underpins billions of dollars in digital trade. On the other side, the European Commission is more cautious: both the Privacy Shield and the previous deal, suggestively named “Safe Harbour”, were struck down by the Court of Justice of the EU.

The vision of data privacy is still very different between the European Union and the United States. While Europe has adopted an important tool with the GDPR, there is no such thing at a national level in the US, although some states such as California have adopted similar measures.

Closing a deal would be particularly important for large US technology companies. At the same time, the European Commission aims to ensure that US authorities cannot get their hands on the data of citizens of the Member States. European citizen’s rights are currently not sufficiently protected when data is stored overseas. Some experts have even speculated that resolving the issue could require changes to US surveillance laws.

The fracture is certainly not irremediable, but it highlights the different priorities that the parties have in dealing with the subject. Under EU law, on the one hand, information about citizens of the Member States cannot be sent to third countries unless the country where data is sent is deemed to give the same level of protection as the EU. The United States, on the other hand, favor a deregulated approach to avoid damaging the interests of the large technology companies that have led the country’s economic revival over the past decade.

Data sovereignty is a topic of growing importance in the battle to preserve European values. For this reason, Re-Imagine Europa collaborates with the SoBigData poroject, which was set up intending to create a research infrastructure delivering an integrated ecosystem for advanced applications of social data mining and big data analytics. The road to creating a structure capable of competing with American and Asian technology giants is certainly uphill. Nonetheless, it is necessary to pursue the European vision to avoid being squeezed between two opposing approaches, the Chinese and the American, that do not reflect the fundamental common values that have always characterized post-war European culture.