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The European Commission’s Trade Policy Day on December 5th is a timely moment to reflect on the outlook for trade policy across the world.
In recent times we’ve witnessed a torrent of political events that have altered the outlook on trade and created a shift towards mercantilism – and in some cases, pure protectionism – as illustrated by the 2016 Trade and Investment Barriers Report. European exporters reported a 10 percent increase in the number of trade barriers they encountered in 2016 alone. It’s safe to say that protectionist sentiment and opposition to trade and globalization are as strong as they have been in recent memory.
Yet we’ve also witnessed a development – independent of shifting political winds – that has important ramifications for global trade: the phenomenon of data. The question now is, how can we reconcile those two developments and make progress on trade policy for the good of our economies and societies?
IBM’s view centers around three key actions.
The first of these is that we must engage, individually and collectively, with all stakeholders on the issues of trade and globalization. Silence is not an option. It is our responsibility, individually and collectively, to make the case for openness, now more than ever. Some say that we should retreat behind our walls; that a staunch defense of our values may be a waste of time at best, or provoke public criticism at worst. But IBM has been working with world governments for 100+ years. And this experience has taught us that engagement – reaching out, listening and having authentic dialogue – is actually the best path to good outcomes. Our CEO gives a consistent message in her regular conversations with government leaders across the world: “Open is better than closed. Protectionism will hurt your own interests.”
It is incumbent upon all of us to engage our political leaders and voice our views on issues that matter to our customers, our business, and our societies. We all must speak up where our values are concerned.
Second, we must cooperate on the non-political factor that is data. The growth, speed, and our growing ability to harness data is fast becoming the dominant force in how the world works. With data being a new basis of competitive advantage, it is important for trade partners to address the phenomenon of data in a mutually beneficial way. That is why the EU and US agreement to continue with Privacy Shield is crucial. And the EU Digital Trade Strategy report recently adopted by the European Parliament is a clear sign of the strengthening political will to have an ambitious Digital Trade chapter, including data flows, in EU trade strategy.
Third, despite the current climate, there are big openings for progress on trade cooperation. Cooperation among key allies such as the EU, US and Japan will be more successful in achieving our goals of convincing other countries that the mercantilist approach to trade is in no one’s long-term interest. Working together on policies on areas such as the internet of things and artificial intelligence will surely open new opportunities for their successful development.
In the face of strong headwinds, it is cooperation and dialogue that will strengthen the resolve for the open, inclusive and global trade that is necessary for each country to grow and prosper.
-Christopher A. Padilla
Vice President, Government and Regulatory Affairs, IBM