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World trade and the role of trust

Posted by Tim Cummins, President of IACCM, Professor, Leeds University School of Law; Chair, International Commercial & Contract Management | Oct 16, 2015 12:29:52 PM

The collapse of the U.S. / EU safe harbor provisions covering transfers of personal data is a reminder of how fragile key trading principles can be. It is especially pertinent at a time when major cross-regional trade agreements are being negotiated and signed.

There will always be those who oppose trade, for either political or personal reasons. They will be looking for weaknesses, betrayals of trust, as opportunities to pounce and undermine relationships. Safe harbor is a good example. While it was on one hand convenient to pretend that it represented true cover for the rights of EU citizens, that was most likely a myth. Various political and industry groups always opposed the measures, believing that they entrenched the power of US technology giants. When Edward Snowden revealed the scale of US intelligence gathering and abuse of the safe harbor principles, it was only a matter of time before a challenge would be mounted. Now it has been successful and some new principles will need to be agreed. Meantime, European tech companies have a window of opportunity to offer locally based services.

Once again, the lesson here is that there are no secrets in a networked world. Governments – at least those which are democratic – that abuse trust or trample on principles will be found out and suffer accordingly. The same applies to business. Failure to operate with integrity is increasingly punished. On the counter side, regimes that pervert the truth condemn their people to poverty and are forced in most cases to operate outside the world trade systems.

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