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The future of digital trade

The growing digitalisation of the economy increasingly affects the trade with goods and services as well as data transfers beyond national borders. The European Parliament is now trying to find a path towards a digital trade strategy. However, from an employee's point of view, the protection of personal date or the establishment of employees’ rights must not be allowed to miss out! The strategy should at last also create options to tax digital companies both efficiently and uniformly.

One of the fundamental challenges of the 21st century is the digital penetration of daily life through information and communication technology. Digitalisation affects almost all aspects of life, from education and culture via manufacturing up to the distribution of goods and services. Digital change has an impact on existing employment and already puts jobs in certain sectors under pressure. A prime example for this change is online trade.

For quite some time now, the European Parliament too has been contemplating the increasing importance of digital trade. Last week, the Committee on International Trade (INTA) voted on the Report by Marietje Schaake (Alde) and various amendments. The report underlines the significance of online trading especially for small and medium-sized enterprises. It therefore insists on the necessity of rule-based regulations for the digital economy. The regulations of an EU digital trade strategy shall also be incorporated in future trade agreements. Taken this into account, the report puts its focus on securing market access for digital goods and services in third countries, the protection of personal data in case of transfer from EU to third countries as well as on a global perspective (e.g. a deeper integration with regard to the WTO or developmental motives). Based on the positive vote on the report, the European Parliament would like to take an active role in regulating digital trade. Against the background of the Paradise Papers coming into the public domain, MEPs of INTA also voiced the necessity of efficiently taxing digital companies. Both debate and final vote on the report will take place in the plenum on 11/12 December.

The MEP Karoline Graswander-Hainz (S&D) regards the report as a positive step towards a European digital trade strategy. On the one hand, the EU in its capacity as standard setter shall establish global rules to enable European companies improved access to global value chains. On the other hand, European data protection regulations have to be upheld under all circumstances. The objectives of EU standards for digital trade have to be the safeguarding of market access for digital goods and services in third countries, consumer-friendly regulations and the guarantee of digital rights at global level. Apart from that, the Social Democrats achieved the inclusion of a provision on taxing digital companies.

From an employee's point of view, apart from the important aspect of data protection, in particular the impact of digital trade on jobs, employment relationships and workers’ rights play a key role. The establishment of European minimum standards and overcoming the so-called Digital Divide, hence the different access possibilities to information and communication technology between EU Member States and partner countries has to be guaranteed. Another important demand in connection with digital trade is the common taxation of digital companies. The motto here is: Taxes have to be paid where profits are generated. The attempt to establish a common method of method of corporate taxation (Common Consolidated Corporate Tax Base) including provisions on taxing digital companies may be regarded as a relevant initiative. These issues are currently being discussed in the ECON Committee of the European Parliament.

Further information:

Draft Report: Towards a digital trade strategy

AK Policy Paper: Online trade in Austria

AK Policy Paper: Digitalisation and taxation

AK EUROPA: Corporate taxation in the EU – a step forward on a long way

ETUC resolution on digitalisation: "towards fair digital work"

ETUC Resolution for an EU progressive trade and investment policy

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