Meltzer, P. J. (2014) “The Importance of the Internet and Transatlantic Data Flows for US and EU Trade and Investment“, Global Economy & Development – Brookings Institute, Working Paper 79, October 2014.
The most globally significant bilateral trade and investment relationship is between the US and the EU An increasing amount of this economic relationship is underpinned by cross-border flows of data. Cross-border data flows between the US and Europe are the highest in the world — 50 per-cent higher than data flows between the US and Asia and almost double the data flows between the US and Latin America.
Access to the Internet and the ability to move data freely across borders increases the productivity of businesses and reduces trade costs, thereby creating economic growth and jobs. This is providing new opportunities for small and medium-sized enterprises to participate in the global economy. Consumers are also benefiting as they are able to access new and innovative services.
Cross-border data flows are a form of international trade. For instance, a range of services can now be purchased and delivered online to anyone with Internet access – so called digitally deliverable services. This includes services such as finance, consulting, software and royalties for intellectual property use. Studies find that increasing Internet access leads to increased international trade.
Relevant posts:
- Mitchell, B. (2014) “The German ship is sinking under the weight of its own delusions“, Bill Mitchell Blog: Modern Monetary Theory… Macroeconomic Reality Blog, 16 October.
- Stiglitz, J. (2013) “The Free Trade Charade“, Project Syndicate Organisation, 04 July.
- Oliver, T. (2014) “A ‘Brexit’ would have important implications at the European and international levels“, LSE EUROPP, 24 June.