Authors: Richard Samans, Hosuk Lee-Makiyama
World Economic Forum Agenda
Original article is here.
Excerpt:
Data is among the most valuable inputs used during production processes (overtaking the value of electricity, labour and raw materials in some sectors) and will play an even more significant role with the advent of 5G, big data and connected manufacturing.
A rapidly evolving patchwork quilt of global rules and domestic regulation, however, has thrown these trends into reverse. And some governments may be tempted to see recessions, trade wars and new competitors as providing justifications for stricter controls and trade barriers.
In response, under Japan’s G20 presidency in 2019, world leaders welcomed the Osaka Track – a call for closer international cooperation to harness the full economic and social potential of cross-border data flows and emerging technologies that rely upon them. Also last year, over 80 economies joined negotiations on e-commerce at the World Trade Organization (WTO), with the potential to cover data flows, building on rules that have already emerged in regional and bilateral negotiations.
Six recommendations:
- Ensure privacy laws contain mechanisms for lawful overseas transfer of data. This is essential since data will otherwise be confined within a country’s borders. Even in circumstances where other jurisdictions do not offer equivalent data protection, governments can empower users to decide, or hold businesses accountable to any breaches wherever data is stored.
- Minimize conflict of laws. After all, there would be no justifications for data localization between countries with equivalent data protection standards, and when law enforcement agencies assist each other expeditiously. There is much national authorities can do together to enhance the consistency and interoperability of their regulations as well as how these are administered.
- Develop a common-denominator definition of non-personal data. There will always be minor differences in what each country defines as sensitive or personal data. These differences should not be a justification for all types of data flows to be confined. We need to find a common baseline definition of non-personal data that permits such data to flow with a minimum of uncertainty for companies and other organizations that rely upon it to provide services to their customers and constituents. Interested entities should initiate a public-private dialogue on how we define or treat personal and non-personal information, metadata or sensitive information, bringing together experts from different spheres.
- Create a multilateral foundation for open data flows in the trading system. Ongoing digital trade talks at the WTO should include basic commitments that bind governments to facilitate the movement of information across borders, including prohibitions against data localization, mandatory disclosure of source code and algorithms, or tariffs on electronic transmissions.
- Match trade rules with robust regulatory cooperation. Trade commitments are often accompanied by conditions and exceptions. Structured, standing channels of regulatory cooperation between governments can help to ensure that they use these exceptions sparingly, and in a manner consistent with the inclusive and balanced spirit of DFFT.
- Mobilize robust capacity-building assistance for developing countries.