@H in The Hague
"Could you explain how potentially watering down data protection rules, which protect ordinary people (and extraordinary ones such as Commentards), gives the UK a competitive advantage?"
Take a runner. But just add thicker shoes for his own protection. Increase the height of the shoe to support the ankle more. Just add longer shorts, no make that trousers to protect against weather. And for that matter add a thicker shirt, long sleeve of course. And he is gonna need to drink so add a pack. Gotta be enough so increase the size of the container. Etc.
Regulation is about reducing what can be done. Adding regulation to everything and anything (under the principal that if its permitted its allowed instead of its permitted unless disallowed) is mounting more and more weight to achieve nothing. Just remember the piss taking about elf 'n safety. Or look at the lament of the EU not having any home grown successes like Google and Facebook.
Reducing the over-excessive rules is something the EU feared would give the UK a competitive advantage. Even they recognised it.
"And why potentially making it more difficult for UK businesses to trade internationally "
Why? This is where the EU is being left behind while the rest of the world moves on. The US still wont play by EU rules and countries take great amusement slapping the EU publicly for fun, because its not the big player it dreams of being. Trading internationally means following trade rules accepted by the other country. If the EU wants to try and dictate domestic policy (it does) then small countries may try to keep up but the rest just get on with their lives.
"I'm genuinely interested to know the possible upsides."
Might be easier to explain in normal trade. The product you send to the importer must meet the importers regulations. That does not mean the importer dictates our domestic policy only what is exported to them. If they try then is it worth the effort. For financial regulations (passporting) the UK decided it isnt worth the cost (economic damage) to the global financial centre of Europe to bow to the EU, and instead will remove a bunch of regulations dictated by the EU. If the EU wish to cut themselves off from London they can have a recession in the EZ, their choice.
"Incidentally, the UK has long had reasonable data protection legislation"
Yes. Great isnt it. So lets see what gets proposed.
"so watering down the current data protection legislation amounts to undoing homegrown British law rather than EU law."
Maybe, maybe not, lets see. And lets see if it improves or not the current situation (I have no idea).
"Have a nice weekend."
You too. Hopefully a bright and sunny one.