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Safe Harbor 2.0

By Rep. Anna G. Eshoo

For nearly two decades a little-known trade agreement between the United States and the European Union has resulted in trillions of dollars in transatlantic commerce, one of the most significant economic relationships in the world. Known as the U.S.-EU Safe Harbor Framework, this agreement has allowed for unfettered commercial data transfers between the U.S. and the EU with the caveat that participating countries maintain ample personal privacy protections. A recent decision by the European Union Court of Justice, however, has invalidated the agreement, citing inadequate privacy protections within the U.S.

The agreement between the U.S. and the European Union has become the bedrock of 21st century global commerce. With thousands of U.S. companies reliant on it to conduct business, it’s now essential for the U.S. Commerce Department to work quickly with European regulators to shape a resolution that protects personal privacy and our digital economy.

In Silicon Valley and on both sides of the Atlantic, companies continue to reel from the Oct. 6 court decision. As one expert remarked, “Aside from taking an ax to the undersea fiber-optic cables connecting Europe to the United States, it is hard to imagine a more disruptive action to trans-Atlantic digital commerce.” According to the Brookings Institution, in 2012 up to $140 billion in U.S. exports to the EU were delivered online alone. And in total, the trade relationship between the U.S. and EU is estimated at over $1 trillion annually.

“Over 4,400 U.S. companies relied on Safe Harbor to validate the transfer of data from the EU to the U.S., including both U.S. headquartered companies and U.S. based subsidiaries of EU headquartered companies,” the Internet Association recently wrote to Congress in the wake of the court decision. “Over half of these companies are small and medium sized companies.” Companies small to large are undoubtedly leveraging the power of the Internet and data transfers to engage in international trade and develop innovative business models. From cloud computing and financial services to broadband latency and the permeation of smart devices, cross-border data transfers have become the backbone of our digital economy. Ensuring Safe Harbor’s future is equivalent to ensuring our digital future.

But the elephant in the room is privacy concerns relating to U.S. surveillance methods. Despite the effectiveness of Safe Harbor for the past 15 years and reforms to U.S. surveillance law in the wake of the Snowden revelations, the European Court of Justice deemed U.S. privacy protections inadequate. I have consistently highlighted U.S. surveillance activities on U.S. citizens and companies as a factor in technology and trade policy, and the economic breadth of this trade agreement is not an excuse to skirt civil liberties.

Recognizing the magnitude of the Court’s decision, I joined colleagues from both sides of the aisle in a letter last month to U.S. Commerce Department Secretary Penny Pritzker and Federal Trade Commission Chairwoman Edith Ramirez, urging the Administration to redouble their efforts to come up with a new agreement with the EU. We explicitly cite the importance of 1) personal privacy and 2) providing certainty for companies reliant on data transfers for their business. It’s our hope that the renewed Safe Harbor negotiations between the U.S. Commerce Department and the European Commission account for these two requisites — a Safe Harbor 2.0.

I believe a Safe Harbor 2.0 is within reach, and it is essential. In a digital economy there is nothing more important than the free flow of data across borders. And a Congress that is united in support of this goal and the reinstatement of a new agreement will ensure the continued growth of digital commerce in the years to come.

Rep. Anna G. Eshoo, D-Calif., serves as ranking member of the House Energy and Commerce Communications and Technology Subcommittee.

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