There is too much trade at risk otherwise. There are enough macro headwinds for the global economy without adding self-inflicted injuries.
> the EU's top court struck down two previous agreements over fears of U.S. intelligence agencies' snooping.
Yeah, if only America's government agencies could keep within the confines of the law.
To use an extreme example to drive the point home, going to war with someone is (or can be made) legal too...
There's a lot of Europeans in the comments who mistakenly believe that GDPR applies outside of the EU. It does not. The US is a sovereign nation with its own laws, and it does not have any analogous legal restrictions like GDPR, nor does it have any legal restrictions against the government using it's intelligence apparatus against non-Americans.
That doesn't mean the non-EU countries will enforce it, it means that EU countries will enforce it even if the violation of the law happened outside of the EU.
Extra-territoriality of law is a fantasy, not a reality, unless it's backed by significant soft and hard power. Any country can say their law is extra-territorial all they want, but they have no jurisdictional authority to the enforce the law in an extra-territorial way. The extra-territoriality of GDPR has never been tested, but it's pretty clear to me that the EU cannot successfully enforce GDPR against a non-EU entity in the US. It may be able to use soft-power against smaller nations, but not against the US.
If the GDPR needs to extend into the US, it has to be via treaty, which has the same force as federal law, or via analogous federal law in the US. Neither of which exist right now. In fact, the exact opposite exists. The US government has made it pretty clear with the Cloud Act and other laws that the GDPR does not and will not apply to US-based companies operating on the Internet.
The EU is welcome to try to enforce it. In some ways, I would hope it would succeed (I support GDPR privacy rights/goals), however the precedent of extra-territoriality and sovereignty is not small.
Not quite. It applies to people "in the Union".
If the entity doing the processing is established in the Union then it applies to all of that entity's processing of personal data, regardless of where that processing takes place or the citizenship of the people whose data is being processed.
Same for entities not established in the Union but in a place where Member State law applies. The example they give in the corresponding recital is in a Member State's diplomatic mission or consular post.
For entities not established in the Union what it says it applies to data subjects who are in the Union in regard to activities related to offering them goods and services or monitoring their behavior as far as their behavior takes place in the Union.