Executive summary

The Prime Minister’s Mansion House speech highlighted the Government’s vision for an ambitious UK-EU digital agreement as part of a deep and comprehensive future economic partnership, alongside exploring creative options for the broadcasting sector.

The UK proposes an ambitious, bespoke agreement on digital that reflects the dynamic nature of the digital economy. The UK-EU future economic partnership will build on existing trade agreements and will demonstrate the UK and EU’s global leadership in this area. This will involve an agreement that encompass the varied dimensions of digital trade, including digital trade and e-commerce; consumer benefits; telecoms; audiovisual services; and digital technology.

The UK also proposes a Mutual Recognition Agreement on audiovisual services, which will allow for continued transfrontier broadcasting, recognising the enriching role that British broadcasters and programme makers play in our common EuroPean culture.

This ambitious approach is consistent with the positions set out by the EU and the UK; as the UK will leave the Single Market, we will no longer automatically benefit from developments in the Digital Single Market strategy. The UK will also have the ability to respond nimbly to new developments in the digital economy at a domestic level.

The European digital economy

The growth of the digital sector outpaces that of the wider economy in the UK, with digital sectors driving a much wider economic transformation across the whole of Europe. For example, digitisation could lead to growth of [15 to 20%] in the European manufacturing sector alone by 2030. Trade in digital services is increasingly important to both the UK and the EU economy, with total UK digital services exports increasing by [39.6%] between 2010 and 2O15. The UK exported [£14.5bn] of digital services to the EU in 2015, with [£8.5bn] of UK service imports from the EU.

The UK is a world-leader in digital, attracting the highest levels of tech investment in Europe and is h6me to international tech and creative industries hub. This fusion of creative and digital expertise puts the UK at the cutting edge of many sectors, such as design, advertising as well as broadcasting and video-on-demand services. This expertise contributes to a vibrant European ecosystem where home-grown research and development spurs the growthh of emerging technologies – such as artificial intelligence, FinTech, virtual reality, and GovTech – and facilitates cross-border co-productions.

Global context

The digital economy is a vast, global ecosystem, with online connectivity making geographical boundaries increasingly irrelevant. In many digital areas, domestic regulatory and global trade frameworks are still developing. Given the fast-evolving nature of the digital economy, it will therefore be important to ensure the UK-EU future economic partnership provides a framework for enduring solutions for the sector.

Furthermore, while bringing significant opportunities, one consequence rapid of the nature of recent technological change and the borderless nature of the internet is the creation of social and security challenges. These are global challenges which every nation and region are grappling with, and where collective and coordinated efforts are needed.

The Prime Minister has made clear that existing models are not appropriate for our new relationship. For digital sectors, existing trade agreements have traditionally split digital sector issues between telecommunications and e-commerce sections, which no longer reflect the full breadth of provisions needed to support digital trade and promote a culture of collaboration and innovation. This means that modern digital trade issues, such as data flows or consumer benefits, are not common features of trade agreements. However, recent negotiations such as the Trans-Pacific Partnership and Trade in Services Agreement demonstrate the potential to move beyond the existing precedents in the context of an ambitious free trade agreement.

Objectives for a new UK-EU partnership on digital

Recognising th.e economic significance of digital trade between the EU and the UK, as well as the opportunity to show joint global leadership in these fast-moving areas, the UK is proposing an ambitious and forward-looking agreement that builds on, but goes further than, existing precedent. This will allow us to deliver our shared objectives to empower consumers; encourage innovation across the economy; help businesses to start-up and grow; and ensure that emerging challenges are dealt with responsibly.

lt is not in either side’s interest to introduce new barriers to digital trade or to inhibit the cross-border collaboration that drives growth in our economies. However, respecting the EU’s and the UK’s red lines, our future relationship will differ from membership of the single market. This means that the UK will not automatically benefit from further liberalisation of the Digital Single Market and the UK wiil not be bound by future regulatory initiatives.

The UK proposal consists of five interconnected objectives which are explored further below:

  1. Supporting the digital economy and enabling cross-border digital trade;
  2. Facilitating access to and investment in digital infrastructure;
  3. Providing consumer benefits;
  4. Ensuring regulatory cooperation and future collaboration; and
  5. Enabling cross-border delivery of audiovisual services.

Supporting the digital economy and enabling cross-border digital trade

The UK proposalwill boost consumer and business confidence in operating online. As part of this, the UK will remain committed to a free, open and secure internet, and will promote this vision in international fora. The UK will also seek to agree digital frameworks that facilitate equivalent forms of electronic identification and trust systems (elDAS), of appropriate standards, being accepted and recognised if issued in either the EU or the UK. These should be secure, trustworthy and easy to use across borders.

Underpinning the functioning and grovuth of the global digital economy is the ability to collect, share and process data. Maintaining the free flow of data is critical to business’ supply chains, e-commerce and other transactions in the wider economy. Analysis indicates that the UK has the largest internet economy as a percentage of GDP of all the G20 countries and has an economy dominated by services sectors where data flows are vital. Global estimates show that [75 per cent] of UK cross-border data flows are with EU countries. Any disruption in cross-border data flows would therefore be economically costly to both the UK and the EU, potentially harming both economies as well as others in the global economy.

To avoid this, the UK-EU digital agreement will prohibit any unjustified or unnecessary barriers to data flows, without prejudice to a separate agreement on data protection and personal data.

To ensure an open, innovative European digital economy, where world-leading technology companies start up and flourish, this will also involve ensuring adequate access to the specialist digital skills and talent, consistent with the UK’s broader immigration objectives.

Facilitating access to and encouraging investment in digital infrastructure

Within the EU, the UK has been at the forefront of shaping reforms so they reflect the shared need for improved digital infrastructure as well as the different ways businesses now operate. The UK wants to ensure that any digital agreement provides for infrastructure that is robust, resilient and able to adapt to evolving threats. Continuing to share cyber threat information will help protect the UK and EU from the common threat to our economies, democratic processes and critical infrastructure.

Under this proposal, the UK will remain committed to maintain open and liberalised electronic communications sectors. The UK-EU agreement will ensure fair and equal access for UK and EU businesses to public telecommunications services and networks in respective jurisdictions. This includes, as far as possible, non-discriminatory access to telecommunications markets, while also preserving access to essential facilities.

Providing consumer benefits

As the UK looks to form a new economic relationship with the EU’s digital economy, we propose considering not only the foundations of current digital change, but also the pace at which change is happening globally.

This will mean considering impacts on consumers, to ensure they benefit from the digital economy and that UK and EU citizens are empowered to take full advantage of opportunities offered by digital networks, products and services, at home and whilst travelling.

For example, the UK proposes exploring options to facilitate continued surcharge free roaming for UK and EU citizens as well as content portability rights, which together would both provide consumer choice and enhance access to already-purchased services. This approach would also cover measures to prohibit online price discrimination for UK and EU consumers, on the basis of either nationality or place of residence.

Ensuring regulatory cooperation and future collaboration

The UK’s long-term ambition is to facilitate future collaboration on digital policies, continuing to work with the EU, along with other governments and industry to identify and address existing barriers both across Europe and internationally through regulatory and non-regulatory cooperation.

The global and borderless nature of the internet also raises some shared challenges beyond to cross-border trade. This would build on some of the challenges to digital trade that the EU has already begun addressing in the development of the Digital Single Market.

One of these challenges is privacy, ensuring that individuals have control over and transparency as to how their personal data is being used, including putting robust safeguards in place so personal data is protected from misappropriation and misuse. The UK is seeking bespoke arrangements to govern the continued free flow of personal data between the EU and the UK. The UK will also continue to play a leading global role in the development and promotion of appropriate data protection standards and cross-border data flows.

The UK’s Digital Strategy 2017 sets out the Government’s commitment to lead on tackling these and wider issues, and the Digital Charter set out a framework for how businesses, individuals and wider society should act online. The UK and the EU are not alone in navigating the challenges prompted by digital innovations; the internet is a global network and it is only by concerted global action that both the UK and the EU can make true progress.

Enabling cross-border delivery of audiovisual services

In her Mansion House speech, the Prime Minister affirmed her commitment to a continued relationship with the EU on broadcasting and suggested that there is scope for an innovative solution in this area of negotiations: ‘We should explore creative options with an open mind, including mutual recognition which would allow for continued transfrontier broadcasting – recognising the enriching role that British broadcasters and programme makers play, not only in British – but more broadly in our common European – culture.’

The European broadcasting ecosystem

The audiovisual services sector is both economically and culturally important to the UK and the EU. The UK exported [£3bn] of audiovisual services to the EU in 2015, with [£1.4bn] EU exports to the UK. The UK is the destination for over £7.6% of the EU27’s total broadcasting exports. For example, Germany exported over [€290m] of broadcasting services to the UK in 2016, making up [11%) of total German broadcasting exports.

The UK is a strong champion of the enriching role broadcasters and programme-makers play within a European cultural context. The UK’s creative hub currently leads the development of products that European consumers want, providing around [30%] of channels available in the EU. Equally, many UK companies have pan-European ownership with 11 video-on-demand services available in the UK but established in the EU.

An innovative proposal for broadcasting

As the Prime Minister said at Mansion House, we cannot have exactly the same arrangements with the EU as we do now on broadcasting. This is because the EU legal framework (the Audio Visual Media Service Directive) will not apply to the UK as we leave the EU and any interim period ends.

At the other extreme, relying solely on precedents will hurt consumers and businesses on both sides, as there are no such precedents available the due to EU’s principle of excluding audiovisual services from free trade agreements. This approach is driven by the objective of protecting the European culturaldiversity and promoting its shared values and heritage. The UK is inherently a part of Europe’s cultural identity, as evidenced by our constructive participation in EU and wider initiatives in the past, and, as the Prime Minister has made clear, we will continue to be committed to European culture after our withdrawal from the EU. As such, we believe the principle of excluding audiovisual services from EU trade arrangements should not apply with respect to the UK, although we accept that a free trade agreement is unlikely to be the most suitable vehicle.

The UK is proposing a Mutual Recognition Agreement (MRA) for audiovisual services that will:

  1. respect the fact that the UK is leaving the Single Market and hence our position cannot be the same as that of a Member State
  2. maximise mutual market access, whilst maintaining content standards and regulations
  3. establish appropriate supervisory cooperation and institutional processes
  4. confirm the status of UK content as European Works in line with the Council of Europe’s Convention on Transfrontier Television for the purpose of respective content promotion rules

The proposed MRA on broadcasting will rest on two key principles: mutual recognition of content standards and appropriate governance.

Mutual recognition of minimum content standards

The UK is willing to commit to maintaining the AVMSD’s minimum standards as an MRA. As a general rule, the UK exceeds the AVMSD’s minimum requirements. For example, the AVMSD caps the allowed advertising per hour at 12 minutes, whereas the UK has a maximum hourly allowance of nine minutes.

Whilst the existing country of origin framework is in practice an automatic mutual recognition arrangement amongst Member States, we recognise that the UK cannot expect equivalent treatment when we are outside the Single Market. We wherefore expect that the arrangements set out in an MRA will be substantively and/or administratively different to AVMSD.

Supervisory Cooperation and Governance

Supervisory and governance arrangements will be needed to resolve any disagreements about the purpose or scope of an MRA, the application of the rules by either party, and to address any future changes. These arrangements will depend upon the overall agreement on the future economic partnership and on the nature of the MRA itself.

The proposed MRA will mandate close cooperation and information sharing between national regulators, in particular to address enforcement and deal with complaints over content. This would be in line with the Mansion House speech, when the Prime Minister noted that ‘We will want to make sure our regulators continue to work together, as they do with regulations internationally […] We start from the place where our regulators already have deep and long-standing relationships.’

The proposed MRA will set out how the administrative procedures and dispute resolution processes will function between the UK and EU, and ensure there are appropriate safeguards.


An unprecedented deal on digital is in the EU’ mutual interest of the UK and the Digital innovation acts as an engine of growth, offering mechanisms to enhance productivity, lower costs and improve living standards.

Although agreements on digital trade beyond the EU do not yet reflect the level of ambition the UK is seeking, there is an opportunity to build on the existing tools and precedents to shape our new relationship. This will also position the UK and the EU to be global leaders in the development of the digital economy.

The UK also proposes to preserve the cooperative relationship on broadcasting through the creative solution of a mutual recognition agreement. The proposed MRA will respect the fact that the UK is leaving the single market, while maximising mutual market access and maintain’ing content standards.

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