Data is Different: Why the World Needs a New Approach to Governing Cross-border Data Flows

Susan Aaronson

Working Papers from The George Washington University, Institute for International Economic Policy

Abstract: Companies, governments, and individuals are using data to create new services such as apps, artificial intelligence (AI) and the internet of things (IoT). These data-driven services rely on large pools of data and a relatively unhindered flow of data across borders (few market access or governance barriers). The current approach to governing cross-border data flows through trade agreements has not led to binding, universal, nor interoperable rules governing the use of data. Trade diplomats first established principles to govern cross-border data flows, and then drafted e-commerce language in free trade agreements, rather than through the WTO, the most international trade agreement. Data-driven services however, will require a different domestic and international regulatory environment than that developed to facilitate e-commerce. Most countries with significant numbers of data-driven firms are in the process of debating how to regulate these services and the data that underpins them. I argue that policymakers must devise a more effective approach to regulating trade in data for four reasons: the unique nature of data as an item exchanged across borders; the sheer volume of data exchanged; much of this data exchanged across borders is personal data, and the fact that although data could be a significant source of growth, many developing countries are unprepared to participate in this new data driven economy and to build new data driven services. This article begins by with an overview and then describes how trade in data de is different from trade in goods or services. It then examines analogies used to describe data as an input, which can help understand how data could be regulated. Next, we discuss how trade policymakers are regulating trade in data and how these efforts have created a patchwork. Finally, it suggests an alternative approach. "

Keywords: data; digital trade; AI; internet; trade; FTA; WTO (search for similar items in EconPapers)
JEL-codes: F1 F5 F6 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2018-10
New Economics Papers: this item is included in nep-big, nep-ict, nep-int and nep-pay
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gwi:wpaper:2018-10

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