Data flows in trade agreements

Letter to the Commission

Brussels, 18/12/2017

Dear President Juncker,

Dear Commissioners Ansip, Gabriel, Jourova, Katainen, Malmstrom, and Timmermans,

Last week, a broad majority in the European Parliament voted for my own-initiative report entitled ‘Towards a Digital Trade Strategy’.1 The report enjoys strong consensus on the most recent wording on cross border data transfers in trade agreements. Since the final text of the adopted report may not have reached you yet, I would like to encourage you to take on board the following:

Firstly, the report makes clear that there is a place for rules on cross-border data transfers in trade agreements in the following two paragraphs:

  •   Para 11: "Urges the Commission to draw up rules for cross-border data transfers as soon as possible which fully comply with the EU’s existing and future data protection and privacy rules (...)" and "considers that such rules and provisions should form part of all new and recently launched trade negotiations with third countries".

  •   Para 13: “Calls on the Commission to put forward, as soon as possible, its position on cross- border data transfers, unjustified data localisation requirements, and data protection safeguards in trade negotiations, in line with Parliament’s position, so as to include it in all new and recently launched negotiations and to avoid the EU being sidelined in international trade negotiations.”

    Secondly, this language also reflects the consensus of the European Parliament’s resolution of 26 October 2017 containing the Parliament’s recommendation to the Council on the proposed negotiating mandate for trade negotiations with Australia, which includes in para 19 (l):

  •  “Stresses that, for an FTA to be truly advantageous to the EU’s economy, the following aspects should be included in the negotiating directives (...) (l) ambitious provisions allowing for the full functioning of the digital ecosystem, and promoting cross-border data flows, including principles such as fair competition and ambitious rules for cross-border data transfers, in full compliance with, and without prejudice to, the EU’s current and future data protection and privacy rules, given that data flows are crucial drivers of the services economy and are an essential element of the GVC of traditional manufacturing companies, and therefore unjustified localisation requirements should be curbed as much as possible; data protection and privacy are not a trade barrier but fundamental rights, enshrined in Article 39 TEU and Articles 7 and 8 of the Charter of Fundamental Rights of the European Union”.2

Thirdly, the Parliament included language in the Digital Trade report that made clear that including rules on data flows cannot - and should not - undermine our fundamental rights to data protection and privacy. Hence, the digital trade report contains an exception to this rule, and stated in para 11:

  •  “Calls on the Commission, furthermore, to incorporate into the EU’s trade agreements a horizontal provision, which fully maintains the right of a party to protect personal data and privacy provided that such a right is not unjustifiably used to circumvent rules for cross-border data transfers ”.

Earlier resolutions of the Parliament have pointed out that this provision can be based on GATS Article XIV.

Finally, the Parliament takes a strong position on the issue of data localisation, and states in para. 12:

  •  “Calls on the commission to strictly prohibit unjustified data localisation requirements in free trade agreements (FTAs); considers that the removal of such requirements should be a top priority, and emphasises that the relevant data protection legislation should be adhered to; regrets attempts to use such requirements as a form of non-tariff barrier to trade and as a form of digital protectionism; considers that such protectionism seriously hampers opportunities for European businesses in third country markets and undermines the efficiency benefits of digital trade”.

I encourage you to act in line with this report by the European Parliament. 21st century trade rules can frankly not be meaningful without taking data flows into account. If we want to be a rule maker as opposed to be a rule taker, the EU needs to be in the driving seat, and come up with a joint position that enables our economies to grow and rules to be strengthened, while preserving our fundamental rights.

Yours sincerely, 

MEP Marietje Schaake 

1 510 votes in favour, 95 against, 17 abstentions. Please find the adopted report here: The final version will be uploaded here TA-2017-0488&format=XML&language=EN 

2 0419&format=XML&language=EN The same language was also adopted on the same day in the European Parliament resolution on the proposed negotiating mandate for trade negotiations with New Zealand. See paragraph 20 l: 0312&language=EN