Personal data privacy protection in an age of globalization: the US-EU safe harbor compromise

Hypotheses on the impact of global trade and information flows on state sovereignty and interstate policy convergence have proliferated ahead of empirical studies assessing their explanatory accuracy or predictive powers. The recent personal data privacy protection dispute between the European Union and the United States is a critical case study for examining and refining many of these hypotheses. Personal data privacy protection is a policy realm at once at the forefront of trade and information technology and one that implicates fundamental cultural beliefs and domestic practices. Thus, it is a dispute where the forces allegedly driving and resisting 'globalization' are present. This paper will analyze the 1998 EU Data Protection Directive and the 'safe harbor' compromise agreement between the European Union and the United States to advance the debate over the impact of globalization on state sovereignty, the respective importance and interplay of external and internal forces in shaping state policy, and whether and when the forces of globalization contribute to a reduction in regulation (a 'race-to-the-bottom') or to a higher level of protective regulation ('a race-to-the-top').