Balancing commitments to cross-border data flows with domestic regulation

This chapter begins with an overview of the growth in data access and use globally and the implications of data for economic growth and international trade. The Chapter then analyzes the growth of restrictions on cross-border data flows and requirements of data localization measures with a focus on the APEC region. The data here shows significant growth in data flow restrictions, broken down by type or driver, showing that there a range of reasons for government action, including privacy, security, financial regulation and law enforcement, control over information and for protectionist purposes as well. Next, this chapter looks at how governments are using trade agreements to balance commitments to data flows and no data localization with policy space to restrict data flows in order to achieve other legitimate public policy objectives. The chapter identifies three approaches in trade agreements – the US, Chinese and EU approaches – and shows how each approach includes similar commitments to cross-border data flows and to no data localization, but have developed different exceptions provisions that provide more or less policy space to restrict data flows. The Chapter concludes with some views on what more trade policy can do build trust in data flows and address the various drivers of data flow restrictions