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Info Service on WTO and Trade Issues (Oct21/02) Geneva, 30 Sep (D. Ravi Kanth) – The issue of data management policies has come to the center-stage, after South Africa’s President Cyril Ramaphosa called for “an inclusive digital economy in which approaches to technology transfer are mutually beneficial” at the World Trade Organization. In his keynote address at the WTO’s Public Forum on 28 September, the South African President emphasized that “the benefits of digital industrialization and management of data flows [are] equally felt across the world.” President Ramaphosa conveyed a powerful message that the management of data flows must be left to governments to decide according to their own specific needs for embarking on digital industrialization, said a digital trade analyst, who preferred not to be quoted. On 29 September, data management policies figured prominently in the United States and the European Union Trade and Technology Council dialogue, as well as in the United Nations Conference on Trade and Development (UNCTAD)’s Digital Economy Report 2021. TRANS-ATLANTIC TRADE AND TECHNOLOGY COUNCIL TARGETS CHINA At a meeting of senior officials of the US and the EU in Pittsburgh (US) on 29 September, the two trans-Atlantic giants agreed to set up “10 working groups that will tackle specific areas, clearly aimed at competing against China,” according to a report in the Washington Trade Daily on 30 September. Speaking to reporters after the meeting, the US Secretary of State Antony Blinken said that “when we’re working together, we have a unique ability to help shape the norms, the standards, the rules that will govern the way technology is used, the technology that affects the lives of virtually all of our citizens.” The EU trade commissioner Valdis Dombrovskis claimed that the inaugural meeting of the Council is “a new chapter of cooperation” between the US and the EU. Among the ten working groups constituted by the US and the EU for tackling several issues, working group five on “Data Governance and Technology Platforms” appears to be significant. According to the US and EU, working group five is “tasked to exchange information on our respective approaches to data governance and technology platform governance, seeking consistency and interoperability where feasible.” The US and the EU so far are not on the same page on data flows and privacy in the informal plurilateral Joint Statement Initiative (JSI) group discussions on digital trade, according to the proposals tabled by the US and the EU. The EU’s General Data Protection Regulation (GDPR) on data protection and privacy, which was passed in 2016, seems to be gaining support from many countries, including developing countries. The US, however, wants no restrictions to be placed on cross-border data flows. Increasingly, the US position on data flows appears to be failing to secure support from many JSI member countries, said a JSI negotiator, who asked not to be quoted. It is against this backdrop that the US and EU are now suggesting that they “intend to exchange information and views regarding current and future regulations in both the United States and the European Union with a goal of effectively addressing shared concerns, while respecting the full regulatory autonomy of the United States and the European Union.” The two sides said they have “identified common issues of concern around: illegal and harmful content and their algorithmic amplification, transparency, and access to platforms’ data for researchers as well as the democratic responsibility of online intermediaries.” Working group five is “also tasked to discuss, alongside other working groups, common approaches on the role of cloud infrastructure and services,” implying that they could oppose data localization policies. UNCTAD’S DIGITAL ECONOMY REPORT 2021 In addition to these two developments, UNCTAD’s Digital Economy Report 2021, released on 29 September, has raised some significant issues. The report argues against treating “data flows” as “trade flows” and highlights the need to take “data flows” out of the negotiations on trade, such as the Joint Statement Initiatives and other trade agreements like the CPTPP (Comprehensive and Progressive Trans-Pacific Partnership). According to the UNCTAD report, “… given the different characteristics of data in comparison to goods and services, cross-border data flows are to be considered a new kind of international flow; data flows remain distinct from trade, and treating them as trade can be problematic, for various reasons. While much global data being produced, stored and exchanged are related to commercial transactions, a huge share of these data are not related to such transactions, but to other aspects of human life, and there are challenges facing the distinction between different types of transactions. As such data are produced, collected, stored and transferred, these processes impact issues related to privacy, personal data, social relations and security, among others, and treating these issues just through a “trade lens” implies taking a too-narrow approach.” The report proposes the United Nations as the institution for providing the global governance architecture around data flows. It highlights that the global governance should involve efforts to develop a global approach to the governance of data and cross-border data flows; should address a number of key policy areas and priorities, including developing a common understanding about definitions of key data-related concepts; establishing terms of access to data; strengthening the measurement of the value of data and cross-border data flows; dealing with data as a (global) public good; exploring emerging forms of data governance; agreeing on digital and data-related rights and principles; developing data-related standards; and increasing international cooperation related to platform governance, including with regard to competition policy and taxation in the digital economy. According to the report, global data governance would help enable global data-sharing, and develop public goods that could help address major global development challenges, such as poverty, health, hunger and climate change. Technical coordination across borders – ideally at the global level – is essential to avoid further fragmentation of the Internet infrastructure and the digital space, it said. It argues that global data governance becomes more important in light of the implementation of 5G and IoT (Internet of Things), as well as the acceleration in digitization triggered by the COVID-19 pandemic. These trends broaden the scope for vast data collection and monetization globally. Without a coherent underlying global governance framework to create trust, this could lead to a backlash in terms of data-sharing, said a trade official, who asked not to be quoted. It would also amplify already existing concerns over the lack of transparency in the data value chain, and over the unequal distribution of benefits from data. There is a need to develop a comprehensive and coherent assessment of the risks, vulnerabilities and outcomes of the business models of the digital platforms, in particular social media platforms, against a background of rising online harm at the global level. A global approach to data governance is needed to prevent longstanding inequalities against developing countries from becoming amplified in the data-driven digital space, the trade official said. It is essential to ensure that their local knowledge, needs and viewpoints become adequately represented in global policy discussions. A new institutional setup is needed to meet the global data governance challenge. Existing institutional frameworks at the international level (like the WTO) are not fit for purpose to address the specific characteristics and needs of global data governance, the official said. For it to be effective, a new global institutional framework is most likely needed, with the appropriate mix of multilateral, multi-stakeholder and multi-disciplinary engagement. But the ongoing trade agreements and negotiations are characterized by limited transparency, as negotiations tend to take place in closed processes, with little involvement of non-State stakeholders, said another trade official, who preferred anonymity. As an alternative to building upon existing organizations, growing calls have been made to develop a coordinating institution focused on, and with the skills for, assessing and developing comprehensive global digital and data governance. It would recognize that current global institutions were built for a different world, that the new digital world is dominated by intangibles, and that new governance structures are needed. The UNCTAD report proposes the formation of a new United Nations coordinating body, with a focus on, and with the skills for, assessing and developing comprehensive global digital and data governance. Its work should be multilateral, multi-stakeholder and multi-disciplinary. It should also seek to remedy the current under-representation of developing countries in global and regional data governance initiatives. The body should also function as a complement to and in coherence with national policies and provide sufficient policy space to ensure countries with different levels of digital readiness and capacities can benefit from the data-driven digital economy. “While the report takes the right way forward in proposing the UN as the coordinating body in terms of providing assistance to the countries in building their digital economies and removing data flows from discussions/ negotiations on trade flows, countries need to be careful in defining “data” as a “global public good” as this may backfire, and they may lose the right to own and control their data,” the official said. The UNCTAD report has also stressed on the pitfalls of data localization when it needs to sensitize countries of the need to develop capacity in processing their own data, as data centers are the “new factories” of the digital world.
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