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Trade and Cross-Border Data Flows
Abstract and Figures
The ubiquitous exchange of data across borders has given rise to a range of concerns by
governments and citizens about some of the effects of so much information being collected and used, often without the knowledge of data subjects. This has led countries to condition or prohibit the transfer of data abroad, affecting trade in the process. This paper develops an indicative taxonomy of domestic approaches to cross-border data flow regulation and local storage requirements; it then surveys international instruments that address the question of international data transfers. The paper then examines the issues that data flow restrictions might raise for consumers and businesses. Against this backdrop, the paper highlights the challenge of finding balance between ensuring that important objectives, such as consumer privacy and security, are met while maintaining the benefits from free flows of data, including the benefits from increased and more inclusive digital trade.
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... The deepening of globalization and the transformation of economic models have driven the cross-border flow of data resources and spurred international cooperation in this domain (Burri 2023). Although there is no universally accepted definition of cross-border data flows, the general scope and meaning are largely consistent, encompassing the transmission, processing, and storage of data across national borders (Casalini and López González 2019;Kuner 2013). The core factors influencing international cooperation on cross-border data flows remain insufficiently understood in a holistic manner, impeding both theoretical and practical advancements in this field. ...
International cooperation on cross-border data flows remains a key issue in global discourse, yet existing studies largely adopt a narrow legal perspective. This study explores the broader political, trade, and strategic dynamics shaping US-EU cooperation, offering new insights into their interplay. It highlights three key findings: (1) International cooperation on cross-border data flows is shaped by a complex interplay of individual or intersecting factors, including technology, politics, economics, law, and culture. The strength of each factor's influence is contingent on the economic entities' preferences for specific interests. (2) The evolution of the EU's digital strategy and the increasing politicization of its trade strategy, in conjunction with its policy interactions with the US, have driven shifts in transatlantic cooperation. (3) Given the legal and cultural differences, alongside deeper conflicts in strategic objectives and trade interests, the future of the EU-US Data Privacy Framework is fraught with uncertainties. This study not only strengthens the theoretical foundation of international cooperation on cross-border data flows, but also provides guidance for advancing future EU-US cooperation and fostering further progress in global cross-border data flow collaboration. ARTICLE HISTORY
... Moreover, the role of digital technologies as specialized factors in production division is integral to both production efficiency and management acumen [40,41], When RCDF interrupt the digital empowerment of DVCs, the synergy and collaboration between upstream and downstream enterprises deteriorate. This breakdown leads to a compromised supply of intermediate goods and a consequent dip in DVCs stability [33,42,43]. Such an inhibition of technological innovation sends shockwaves throughout the system [44], indirectly crippling a country's capacity for innovation and, as a result, the enhancement of processes within DVCs. ...
Amidst growing skepticism towards globalization and rising digital trade, this study investigates the impact of Restrictions on Cross-Border Data Flows (RCDF) on Domestic Value Chains (DVCs) stability. As global value chains participation declines, the stability of DVCs—integral to internal economic dynamics—becomes crucial. This study situates within a framework exploring the role of innovation and RCDF in the increasingly interconnected global trade. Using a panel data fixed effect model, our analysis provides insights into the varying effects of RCDF on DVCs stability across countries with diverse economic structures and technological advancement levels. This approach allows for a nuanced understanding of the interplay between digital trade policies, value chain stability, and innovation. RCDF tend to disrupt DVCs by negatively impacting innovation, which necessitates proactive policy measures to mitigate these effects. In contrast, low-income countries experience a less detrimental impact; RCDF may even aid in integrating their DVCs into Global Value Chains, enhancing economic stability. It underscores the need for dynamic, adaptable policies and global collaboration to harmonize digital trade standards, thus offering guidance for policy-making in the context of an interconnected global economy.
... In digital investments, ubiquitous cross-border data flows raise concerns among governments and citizens. For example, there are implications of collecting and using so much information, often without the data subject's knowledge [88]. This has led to countries restricting or banning data transfers abroad, impacting transactions. ...
This research explores the interplay between innovation, economic systems, governance structures, and law, and how they interact with one another in the context of China and Ethiopia’s investments in the Digital Silk Road. The way cutting-edge methods related to governance and economic systems might help lower the risks involved in major infrastructure projects, like the Digital Silk Road, particularly in light of law and 5G developments, is investigated. China–Africa connections are to be strengthened, sustainable development is to be encouraged, and healthy economic progress is the goal of the partnership between Ethiopia and the Hainan Free Trade Port. The impact of these transnational investments on fair growth and sustainable development is assessed, while exploring the evolving agendas and procedures governing investments. This research draws attention to how the law and legal cooperation between Ethiopia and China may promote mutually advantageous outcomes, promote transparency and governance mechanisms, and lessen the likelihood of disputes. This research on the factors influencing the future of the Digital Silk Road and its consequences for long-term, sustainable economic growth, and business in the area, aims to provide valuable insights for policymakers, development professionals, and academics, and for the copromotion of China and Ethiopia in terms of digital investment. This research relates to the promotion of the African Continental Free Trade Area (AfCFTA), in terms of construction and economic development. It also examines how the DSR raises concerns about data security and privacy, cross-border transactions, technology transfer, and cyberterrorism, as well as encourages digital investment, such as through enhancing digital governance regulations, modernizing international investment agreements (IIAs), and bolstering global health, coordination, and cooperation; the article concludes by analyzing the implications for Africa. The findings show that such cooperation would support Africa’s digital transformation and sustainable development, while strengthening China–Africa cooperation.
Introduction: China has not yet formed a complete legal system of data intellectual property rights(IPR), and the legislation of data IPR is scattered. At present, only Beijing, Shanghai and Guangdong have carried out regional legislation. Although China has issued the Opinions of the CPC Central Committee and The State Council on Building a Data Basic System to Better Play the Role of Data Elements (Data Article 20) in 2022, the policy document is relatively abstract, and the content of data IPR confirmation cannot be judged on a basis. Therefore, China urgently needs to legislate on data IPR. And solving the problem of data IPR confirmation is the necessary link of data IPR legislation. China is faced with the problems of unclear nature of data IPR, difficult division of data IPR subjects and diversification and variability of data application scenarios in data IPR confirmation. In addition, present researches have different views on data. Method: In order to resolve the differences on the nature, subject and content of data ownership, this research will use the literature analysis and the comparative method to make an individual research of the relevant content. Research Implications: By comparing the views of scholars in related fields, this research will integrate the current views, and put forward the solution of SPCN(Source- Part- Contribution- Nature) to confirm the data IPR. Results: Through this solution, it fills the gap for related academic fields, and can provide an innovative, low-cost, practical and effective solution for relevant departments.
Based on its well-established multilateral regulatory framework, international trade law is called upon to address the digital transformation of the global economy. However, a (re)contextualisation of international trade against the backdrop of a global digital economy means that new dimensions of cross-border trade must be accommodated in pre-existing rule-based trade governance. By virtue of the inherently global architecture of the Internet, the protection of natural persons in the processing, storage, and dissemination of personal data—operations that are fundamental to a digital economy—is necessarily intertwined with trade rules. Moreover, the importance of data as a resource exacerbates the tension between the economic liberalisation of the processing and cross-border transfer of personal data and regulatory restrictions thereof for non-economic reasons—most notably for the protection of fundamental rights. This chapter develops and outlines the resulting nexus between digital trade and data privacy in the context of international trade and provides an introduction to the resulting research questions.
Cross-border data flows, which encompass a broad and diverse range of economic and non-economic dimensions, raise a number of new trade policy issues. However, as the status of data and data flows in International Economic Law remains ill-defined, no effective multilateral governance is currently exercised with respect to the digital transformation of trade. Notably, the proliferation of national data governance frameworks is a critical element for regulating trade in the digital economy, but one that receives only limited consideration under WTO law. As digital globalisation accelerates, a patchwork of country-specific data governance frameworks threatens to fragment the global data sphere and thus increase barriers to digital trade. The debate on transnational data governance is particularly pronounced with regard to data privacy laws, as these are a common element of domestic data governance and the global landscape of data privacy regulations is characterised by considerable heterogeneity. As a result, the impact of national data privacy laws on the cross-border flow of personal data is one of the most contentious issues associated with digital trade. This chapter provides an in-depth examination of the regulation of data flows through data privacy rules and explores the rationale behind a contemporary data privacy collision in digital trade.
The multilateral framework of the WTO, by virtue of its principles of non-discrimination, its transparency requirements, and its enforceability through the WTO dispute settlement system, has proven capable of facilitating global economic liberalisation in the industrial economy of the twentieth century. However, the incumbent system of international trade governance does not adequately address the socio-economic transformation and the complex trade policy challenges presented by a data-driven digital economy. The nexus of digital trade and data privacy in its conceptual ambiguity and polycentric normative underpinnings epitomizes the exigent challenges for trade governance in a global digital economy. This chapter examines and develops approaches for a recontextualisation of trade law against the backdrop of digital globalisation as well as for a reconciliation of digital trade and data privacy.
The digital paradigm has far-reaching implications for the global economy and for cross-border trade. Digital technologies are driving a new phase of global economic integration. With respect to international trade, it is generally acknowledged that the digital transformation changes what is traded, who trades and how trade is conducted. Data has emerged as a vital economic resource in the digital economy, leading to an exponential increase in global data exchange and a surge in cross-border data flows. The economic shift from tangible to intangible assets in a digital economy is resulting in the emergence of a digital paradigm for cross-border trade. This chapter is dedicated to illustrating the novel dimensions of cross-border economic activity in the era of digital globalisation. This chapter lays the groundwork for analysing the development of regulations for these new elements within a trade context and provides a background for analysing the nexus with data privacy regulations.
International economic law faces a variety of challenges arising from digital business models and an increasing convergence of global markets in the era of digital globalisation. Against the backdrop of a successful tradition of multilateral regulation, the rule-based system of global trade law has been mobilised to address some of the transnational challenges related to digital globalisation. The convergence of trade governance and digital governance has put significant pressure on the pre-existing international trade regime. The cross-cutting challenges of the digital transformation involve all areas of the multilateral trade framework for goods (GATT), services (GATS) and trade-related aspects of intellectual property (TRIPS) implemented by the 1994 Marrakesh Agreement establishing the World Trade Organization (WTO). This chapter addresses the phenomenon of the digital transformation of cross-border economic activity in the context of the regulation and governance of global trade under multilateral trade law and current trade agreements.
This article summarizes and draws connections among diverse streams of empirical and theoretical research on the economics of privacy. Our focus is on the economic value and consequences of privacy and of personal information, and on consumers' understanding of and decisions about the costs and benefits associated with data protection and data sharing. We highlight how the economic analysis of privacy evolved through the decades, as, together with progress in information technology, more nuanced issues associated with the protection and sharing of personal information arose. We use three themes to connect insights from the literature. First, there are theoretical and empirical situations where the protection of privacy can both enhance and detract from economic surplus and allocative efficiency. Second, consumers' ability to make informed decisions about their privacy is severely hindered, because most of the time they are in a position of imperfect information regarding when their data is collected, with what purposes, and with what consequences. Third, specific heuristics can profoundly influence privacy decision-making. We conclude by highlighting some of the ongoing issues in the privacy debate.
This working paper describes the potential of the proliferation of new sources of large volumes of data, sometimes also referred to as “big data”, for informing policy making in several areas. It also outlines the challenges that the proliferation of data raises for the production of official statistics and for statistical policies.
This paper aims to provide policy makers with a broad overview of the issues that the digital transformation raises for trade with a view to informing how these might be reflected in trade policy design. It discusses how digitalisation has changed international trade and provides estimates of the impact of increased digital connectivity on trade. It shows that digitalisation is particularly important for trade in more complex manufactures and digitally deliverable services; that it helps parties better exploit benefits from trade agreements; and that it gives rise to new complementarities between goods and services. The paper also discusses some trade-related regulatory challenges. Engaging in digital trade in goods means paying attention to a broader range of supporting services, such as logistics or e-payments. Similarly, the ability to engage in trade in services, particularly those that are digitally delivered, is also, in part, affected by market access in ICT goods. The paper argues that making the most out of the digital transformation for trade requires approaching market openness more holistically, thinking about measures affecting goods, services and digital connectivity more jointly, and about measures affecting the full value chain, including the enablers of digital trade and tackling all these through greater international cooperation.
Despite the predominately negative evidence of the impact of local content requirements on trade, they continue to play a significant role in trade policy. This has been particularly true since the financial crisis of 2008. The work presented here provides new evidence of the detrimental effects these policies have on the imposing country’s own economy. Most empirical studies have focused on the long run inefficiencies associated with LCRs, notably in the effected sector. This paper highlights the costs to other sectors in the economy, the different impacts on intermediate versus final demand, and the declines in trade in third-party economies, despite not engaging in direct trade with the imposing country. Economies imposing LCRs experience a decrease in exports in non-LCR effected sectors and a growing concentration of domestic activity in a few targeted sectors, undermining potential growth and innovation on a broader scale. The paper concludes by offering policy alternatives.
This paper explores the definition, measurement, and policy implications of digital trade, proposing a tentative typology of digital trade that can be used to unpack transactions and analyse the issues. Digitalisation is changing what and how we trade: from digital delivery to greater physical trade enabled by digital connectivity. Online platforms mean more small packages crossing borders, while new technologies are changing how services are produced and delivered. Underpinning digital trade is the movement of data: data is a means of production, an asset that can itself be traded, and the means through which some services are traded and GVCs are organised. While there is no single definition of digital trade, there is a growing consensus that it encompasses digitally enabled transactions in trade in goods and services which can be either digitally or physically delivered involving consumers, firms and governments. Unpacking trade transactions along these lines using a tentative typology can help in understanding and identifying issues. For example, measuring digital trade poses challenges ranging from identifying transactions that are digitally enabled to the sectoral classification of services in a transaction, and efforts are underway to better reflect digital trade in trade statistics. For trade policy, the increased bundling of goods and services raises issues about which trade rules (GATT or GATS) apply; trade facilitation is ever more critical for just-in-time delivery and GVCs; and the role of data flows in enabling digital trade may require further attention, along with how to ensure that the gains from digital trade are inclusive, within and across countries.
This book synthesises recent work by the OECD analysing services trade policies and quantifying their impacts on imports and exports, the performance of manufacturing and services sectors, and how services trade restrictions influence the decisions and outcomes of firms engaged in international markets. Based on the OECD Services Trade Restrictiveness Index (STRI) - a unique, evidence-based tool that provides snapshots of regulations affecting trade in services in 22 sectors across 44 countries (representing over 80% of global trade in services) - the analysis highlights the magnitude, nature and impact of the costs entailed by restrictive services trade policies. The new evidence uncovered is meant to inform trade policy makers and the private sector about the likely effects of unilateral or concerted regulatory reforms and help prioritise policy action.
Will robots and the Internet of Things falter at national borders?If the Internet of Things offers eyes and ears and robots add arms and legs, both these revolutionary technologies often depend on brains and memories located far away. This is the nature of the remote sensor/server architecture utilized by both the Internet of Things and cloud robotics. Thus, both the Internet of Things and robots rely on the free flow of information across national borders. But this global free flow of data is increasingly at risk to claims that such flows jeopardize privacy and security. Increasingly, national laws restrict the transfer of information outside the home country. A Dropcam, a Fitbit, a Nest thermometer and even a Google car all depend on the flow of data to the home country of their creators. The Internet of Things and cloud robotics may thus find themselves foiled by national borders, victim to a new privacy-based non-tariff barrier to trade.Can international trade law, which after all seeks to liberalize trade in both goods and services, help stave off attempts to erect border barriers to this new type of trade? The smart objects of the 21st century consist of both goods and information services, and thus are subject to multiple means of government protectionism, but also trade liberalization. This paper is the first effort to locate and analyze the Internet of Things and modern robotics within the international trade framework.
This paper is about the potential of the Internet as a platform for international trade, with a focus on the opportunities for small and medium-sized enterprises and developing countries. The Internet has evolved since the 1990's from an online storefront into a means for businesses to reach consumers globally and as a business input that can increase the productivity and ability of businesses to compete. Additionally, these commercial opportunities are no longer limited to Internet companies but are available for business in all sectors of the economy. There are however, a range of restrictions that prevent the realization of the potential of the Internet to grow international trade. These include limits on Internet access, particularly in developing countries. Restrictions on cross-border data flows and market access restrictions on trade in goods and services are also important. Different consumer protection laws across jurisdiction and limited access to dispute settlement for online transaction create risk in using the Internet to engage in international trade. This paper analyzes these restrictions and proposes how international trade law and policy and respond.
A BRICS Internet, the Euro Cloud, the Iranian Internet. Governments across the world eager to increase control over the World Wide Web are tearing it apart. Iran seeks to develop an Internet free of Western influences or domestic dissent. The Australian government places restrictions on health data leaving the country. South Korea requires mapping data to be stored domestically. Vietnam insists on a local copy of all Vietnamese data. The nations of the world are erecting Schengen zones for data, undermining the possibility of global services. The last century’s non-tariff barriers to goods have reappeared as firewalls blocking international data flows. Data localization requirements threaten the major new advances in information technology — not only cloud computing, but also the promise of big data and the Internet of Things. Equally important, data localization requirements undermine social, economic and civil rights by eroding the ability of consumers and businesses to benefit from access to both knowledge and international markets and by giving governments greater control over local information. Legitimate global anxieties over surveillance and security are justifying governmental measures that break apart the World Wide Web, without enhancing either privacy or security.