Strategic choices for the EU’s digital trade policy after the US election

Key messages

• EU digital policies must navigate the geopolitics of a strategic triangle with the US and China.
• The digital agenda is now an important element of trade negotiations. The EU needs to move fast to avoid falling behind in the global regulatory race. Transatlantic cooperation on the regulation of digital trade could push global standards.
• The EU’s digital trade policy needs to aim for a recognition of EU standards to increase market access of European industry, but access to the European digital market can also be leveraged to pursue other political objectives. This may require difficult trade-offs.
• Digital taxation and data flows will likely become a sticking point in transatlantic relations, but transatlantic views on the role of antitrust, privacy, and artificial intelligence seem to be converging. Crucially, the EU and the US have a shared foundation of liberal democratic values.
• Widening the aperture on digital trade issues could lead to a grand bargain between liberal democracies, but this needs to be pursued at the highest political levels.
• The EU has to carefully sequence its digital legislation to balance its collective preferences, while at the same time making sure that potential paths for cooperation with the US and other partners are not blocked off prematurely by presenting them with a fait accompli.