12 THE AUSTRALIA–US CYBER SECURITY DIALOGUE measures to prevent the balkanisation of the internet by limiting data localisation, and provisions on government cooperation on cybersecurity.11 However, the US withdrawal from the TPP during the first week of Donald Trump’s Presidency indicates that a different approach to trade agreements and regional regulations between the US and the Asia–Pacific more broadly will be necessary.12 In particular, data-localisation regulations requiring foreign companies to store citizens’ data within a country’s borders is a trend of concern for Australia and the US. It’s a worrying indicator that security concerns are overshadowing the economic benefits of the current distributed network model. There are legitimate reasons for governments to access data that is stored remotely, and there should be an effective way for them to do so when reasonably necessary. But the complexity of providing such access highlights the difficulties of operating across multiple regulatory regimes. So the rationale for regulatory harmonisation is not only to reduce compliance costs for business. It’s also based on the need to give governments confidence that they can access the data they need for security and law enforcement purposes. This imperative then has to be balanced against concerns about privacy and the protection of human rights. It’s reasonable to worry about foreign governments inappropriately exploiting data stored overseas, but there are ways for states to protect the privacy and security of their citizens while guaranteeing access to data that they require without inhibiting trade. For example, the recent European Union–US Privacy Shield agreement recognises that transatlantic data flows are an important part of the relationship and necessary for digital economic activity.13 The agreement was made to resolve the uncertainty brought about by the European Court of Justice’s overturning of the previous agreement due to concerns about US surveillance of EU citizen information stored in the US.14 The new Privacy Shield agreement provides clarity for businesses in the US and the EU and assures the EU that the personal information of Europeans still benefits from a high level of privacy protection if it’s transferred to the US. There are significant opportunities to deepen digital trade between the US and Australia and to enable the continued economic growth of the Asia–Pacific. There are significant opportunities to deepen digital trade between the US and Australia and to enable the continued economic growth of the Asia–Pacific. Cooperation to harmonise trade regulations in the region and investment in cybersecurity as an enabler of the digital economy will be the keys to unlocking the future potential of digital trade. Short-term bilateral actions can be taken to remove unnecessary impediments to the growth of digital trade between Australia and the US, and other regional partners can follow later. Identifying the policy and regulatory changes our respective governments can take now to enable this growth will be a key task for the Australia–US Cyber Security Dialogue before its next meeting in 2017.