Major economies are addressing the challenges brought by digital trade in different ways, resulting in diverging regulatory regimes. How should we view these divergences and best deal with them?
Trade and industrial policy can support productivity growth through global value chains by providing the right legal environment that supports the formation of longterm business relationships.
Although Russia bears the brunt of Western high-tech sanctions, the European Union will face challenges in sectors where it relies on Russian and Ukrainian commodities and technologies.
Sanctions on high-tech goods supplies, combined with financial sanctions and other restrictions, will deprive Russia of a future as a modern economy.
Restrictions so far on software, media and online services in Russia have been imposed either voluntarily by firms, or else by Russia itself in order to restrict the flow of information.
How Europe can protect itself from Russian blackmail.
To play a deterrent role against Russian military action, sanctions would have to be very broad, have a rapid effect and be as coordinated as possible among Western allies.
Lack of strict governance and transparency creates serious risk that fair competition within the single market will be undermined. Fundamental overhaul of the framework is needed.
Study for the German Federal Foreign Office produced by Bruegel, the Kiel Institute for the World Economy and DIW Berlin.