It is an appealing slogan: data-free flow with trust. Who could oppose it? Many people, it turns out.
Around the globe, national security and political control over data are fueling moves to localize data and construct other barriers to cross-border data flows. In the US, labor and certain civil society groups fear that free data flows are a Trojan Horse to promote dangerous digital trade. In Europe, privacy advocates worry about undermining the European Union’s ability to determine which countries offer sufficient privacy guarantees.
But data free flow with trust neither threatens to undermine national security nor the power to protect privacy. Instead, the Japanese proposal offers an excellent alternative to the Russian and Chinese attempts to give governments almost absolute power to control data.
Data is the digital world’s oil, fueling economic growth. An estimated 221 zettabytes of data will flood the world by 2026, and much will flow across national borders, creating an invaluable resource for global trade.
Right now, few common rules govern the movement of data. Most companies use contracts. Europe’s General Data Privacy Regulation requires countries to be judged “adequate” for their privacy protections. Some trade deals include data deals. Others do not. In the meantime, a risk exists that tech sanctions directed against Russia and China will accelerate a trend to block data flows.
Former Japanese Prime Minister Shinzo Abe first floated the data with trust concept in 2019. He was seeking to fend off a wave of data localization measures sweeping the globe by combining privacy and security of personal and security while smoothing cross-border data flows.
How best to achieve this admirable goal? The Center for Strategic and International Studies offers an insightful analysis. It favors “making national governance systems interoperable, rather than identical” and “building on existing and emerging governance models” such as the OECD Declaration on Government Access to Personal Data Held by Private Sector Entities. The World Economic Forum has published a major paper on the subject.
At the G7 Digital and Tech meeting at the end of April, ministers agreed on a “principles-based, solutions-orientated, evidence-based, multi-stakeholder and cross-sectoral cooperation.” Behind this bureaucratic mouthful, the communique calls for focusing on “identifying common regulatory approaches to cross-border data transfers and facilitating cooperation on privacy-enhancing technologies,” “increasing awareness in the private sector” of the OECD’s declaration on trusted government access to data, and “identifying how to improve sharing in areas such as health care and climate change and the role of digital identities.”
This is a good start. Focus is crucial. Until now, Japanese officials have suggested a grab bag of outputs, including the creation of a registry of prohibitions on data flows and the creation of a new international data administration. Such a registry would be negative, while what’s needed is a positive movement to common principles. And a new administration is unnecessary.
Instead, it would be preferable to build on the OECD work. To the criticism that the OECD only represents advanced democracies, not the broader world, panelists pointed to the way the Paris organization has won a deal on global corporate taxation.
Progress requires addressing specific concerns. Europe must be reassured that it can continue to prioritize privacy and dole out adequate rulings; data free flows with trust could smooth this process by forging global rules on government access. The US can be reassured that free information flows will allow it to protect labor in any free trade deals and to continue imposing national security sanctions.
When the democratic world’s most powerful leaders meet from May 19-21 in Hiroshima, it is unrealistic to expect dramatic movement on data. The priorities will be combating Russia’s invasion of Ukraine and pushing back against China. So far, Japan has failed to give concrete details on how to achieve this goal. It’s crucial to fill in the dots.
Bill Echikson edits CEPA’s online tech policy journal, Bandwidth.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.
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