eu-Protectionism

Digital Divide: How EU’s Protectionism Affects US Small Business

While the world embraces the digital, some are pushing back. Hard.

 

We’ve all heard stories of the more harshly-regulated markets in Asia and Eastern Europe, but we don’t hear much about the world’s more globalizing economies.

 

The European Union is just the latest nation to toe the protectionist line in the digital economy.

 

In a recent article by The Hill, the global trade leadership of the EU was questioned, largely because of the union’s unwillingness to embrace the digital.

 

The hope, for law-makers in Brussels, is to retain the competitiveness of EU-based businesses, and to promote inter-European trade

 

According to the article, the major factor that reinforces the EU’s digital protectionism is “data flows.” There are many government regulations that directly apply to data flows, and hinder digital transactions across borders in favor of “data localization.”

 

The hope, for law-makers in Brussels, is to retain the competitiveness of EU-based businesses, and to promote inter-European trade.

 

This sounds all-too familiar, and will only increase the red-tape for international businesses looking to work with and in the EU.

 

While Europe opens the doors of traditional trade routes, it closes the digital routes that are becoming more and more popular to consumers and businesses alike.

 

Ultimately, this is counterproductive to the project of the European Union: to open borders and promote globalization.

 

This sounds all-too familiar, and will only increase the red-tape for international businesses looking to work with and in the EU.

 

As the Council of Foreign Relations, a US nonprofit, argues, “the digital economy is the sole part of globalization that is still proceeding apace,” and is much more diverse. Not only are there more participating countries, but small businesses have a larger role to play.

 

International small businesses are much more likely to trade and find suppliers through digital means than larger companies. It’s cheaper, faster, and allows smaller companies to compete meaningfully with the big guys.

 

More regulation will make it even harder for these businesses to work with the EU, and therefore contribute to bustling European economies.

 

But, without ecommerce and the digital economy, they may not bustle for long.

 

By piling on the regulations, the EU cuts itself off from lucrative markets in the US and Asia that are continually improving access to the digital economy. Not only does the union lose out on products from these markets, but a diverse market, much like an investment portfolio, lowers the risk of collapse for any economy.

 

Europe may even push away some of their own with these regulations, as the tech-savvy are forced to explore other markets.

 

By piling on the regulations, the EU cuts itself off from lucrative markets in the US and Asia that are continually improving access to the digital economy

 

The EU’s tough laws hinder innovation from technology firms, and issues with data localization and government requirements are driving tech startups to more open markets like the US.

 

Compliance costs in these markets are lower, and less-regulation means more opportunity to innovate and expand.

 

Less regulation and costs to businesses means that you can trade with more countries than ever before

 

While the EU seems caught in the crossfire of the digital economy, the US is thriving in it. Less regulation and costs to businesses means that you can trade with more countries than ever before.

 

But, be aware of the news surrounding the EU’s digital protectionism. It may affect where and how you do business.

 

As with any international dealings, you’ll have to send over some money.

 

International wire transfers are a hassle, and often cost more than they’re worth.

 

To help you along, there’s Veem.

 

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